EQUI-VEST(R)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 3, 1999
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing, or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectuses for The Hudson River Trust and EQ Advisors Trust which contain
important information about their Portfolios.
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WHAT IS EQUI-VEST?
EQUI-VEST is a deferred annuity contract issued by The Equitable Life Assurance
Society of the United States. It provides for the accumulation of retirement
savings and for income. The contract also offers death benefit protection and a
number of payout options. You invest to accumulate value on a tax-deferred basis
in one or more of our variable investment options, our guaranteed interest
option or in our fixed maturity options ("investment options").
Variable Investment Options
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FIXED INCOME OPTIONS:
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Domestic fixed income Aggressive Fixed Income
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o Alliance Money Market o Alliance High Yield
o Alliance Intermediate
Government Securities
o Alliance Quality Bond
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EQUITY OPTIONS:
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Domestic Equity International Equity
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o T. Rowe Price Equity Income o Alliance Global
o EQ/Putnam Growth & o Alliance International
Income Value o T. Rowe Price International
o Alliance Growth & Income Stock
o Alliance Equity Index o Morgan Stanley Emerging
o Merrill Lynch Basic Value Markets Equity
Equity
o Alliance Common Stock
o MFS Research
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Aggressive Equity
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o Alliance Aggressive Stock o Alliance Small Cap Growth
o Warburg Pincus Small o MFS Emerging Growth
Company Value Companies
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ASSET ALLOCATION OPTIONS:
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o Alliance Conservative o Alliance Growth Investors
Investors o Merrill Lynch World Strategy
o EQ/Putnam Balanced
o Alliance Balanced
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You may allocate amounts to any of the variable investment options. They, in
turn, invest in a corresponding securities portfolio ("Portfolio") of The Hudson
River Trust or EQ Advisors Trust. Your investment results in a variable
investment option will depend on the investment performance of the related
Portfolio. Each variable investment option is a subaccount of our Separate
Account A.
GUARANTEED INTEREST OPTION. You may allocate amounts to the guaranteed interest
option. This option is part of our general account and pays interest at
guaranteed rates.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate we set. We make a market value
adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer different "series" of contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only
o An individual retirement annuity ("IRA"), either Traditional IRA or Roth
IRA (Standard Roth IRA, or Roth Advantage)
o A Traditional IRA as a conduit to hold rollover distributions ("QP IRA")
from a qualified plan or a Tax Sheltered Annuity ("TSA")
Minimum contribution amounts ranging from $20 to $2,500 are required to
purchase a contract. The minimum amount required depends on the type of
contract, NQ, IRA or QP IRA, and the series purchased.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 3, 1999, is a part of the registration
statement. The SAI is available free of charge. You may request one by writing
to our Processing Office or calling 1 (800) 628-6673. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI
can also be obtained from the SEC's website at http://www.sec.gov. The table
of contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT
BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
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2 CONTENTS OF THIS PROSPECTUS
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Contents of this prospectus
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EQUI-VEST(R)
Index of key words and phrases 4
Who is Equitable Life? 6
How to reach us 7
EQUI-VEST at a glance - key features 10
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FEE TABLE 13
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EQUI-VEST series 300, 400 and 500 contracts 13
EQUI-VEST series 200 contracts 20
EQUI-VEST series 100 contracts 27
Condensed financial information 33
1
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CONTRACT FEATURES AND BENEFITS 34
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How you can purchase and contribute to your contract 34
Owner and annuitant requirements 36
How you can make your contributions 36
What are your investment options under the contract? 36
Selecting your investment method 40
Allocating your contributions 41
Your right to cancel within a certain number of days 41
2
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DETERMINING YOUR CONTRACT'S VALUE 42
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Your account value 42
Your contract's value in the variable investment options 42
Your contract's value in the guaranteed interest option 42
Your contract's value in the fixed maturity options 42
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"We," "our" and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
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CONTENTS OF THIS PROSPECTUS 3
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3
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TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 43
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Transferring your account value 43
Automatic transfer options investment simplifier 43
Rebalancing your account value 44
4
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ACCESSING YOUR MONEY 45
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Withdrawing your account value 45
Surrender of your contract to receive its cash value 46
When we may terminate your contract 46
When to expect payments 46
Choosing your annuity payout options 47
5
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CHARGES AND EXPENSES 49
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Charges that Equitable Life deducts 49
Charges that the trusts deduct 56
Group or sponsored arrangements 56
Other distribution arrangements 57
6
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PAYMENT OF DEATH BENEFIT 58
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Your beneficiary and payment of benefit 58
How death benefit payment is made 59
Beneficiary continuation option under series 400
Traditional IRA and QP IRA contracts 59
7
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TAX INFORMATION 61
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Overview 61
Transfers among investment options 61
Taxation of nonqualified annuities 61
Special rules for NQ contracts issued in Puerto Rico 62
Individual retirement arrangements ("IRAs") 63
Federal and state income tax withholding and
information reporting 76
Impact of taxes to Equitable Life 77
8
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MORE INFORMATION 78
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About our Separate Account A 78
About The Hudson River Trust and EQ Advisors Trust 78
About the general account 79
About our fixed maturity options 79
About other methods of payment 81
Dates and prices at which contract events occur 81
About your voting rights 82
About our year 2000 progress 83
About legal proceedings 83
About our independent accountants 84
Transfers of ownership, collateral assignments, loans,
and borrowing 84
Distribution of the contracts 84
9
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INVESTMENT PERFORMANCE 85
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Benchmarks 85
Communicating performance data 94
10
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INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 96
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APPENDICES
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I -- Original contracts A-1
II -- Condensed financial information B-1
III -- Market value adjustment example C-1
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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4 INDEX OF KEY WORDS AND PHRASES
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Index of key words and phrases
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This index should help you locate more information on the
terms used in this prospectus.
PAGE
account value 42
annuitant 35
annuity payout option 47
beneficiary 58
business day 81
cash value 42
conduit IRA 67
contract date 11
contract date anniversary 11
contract year 11
contributions 34
Contributions to Roth IRAs
Regular contribution 73
Rollover contributions 73
Conversion contributions 74
Direct custodian-to-custodian
transfers 74
Contributions to Traditional IRAs
Regular contributions 64
Rollover contributions 66
Direct custodian-to-custodian
transfers 64
fixed maturity amount 39
fixed maturity options 39
guaranteed interest option 38
IRA cover
IRS 61
investment options 36
market adjusted amount 39
market value adjustment 40
maturity value 39
NQ cover
Portfolio cover
Processing Office 7
QP IRAs cover
rate to maturity 39
recharacterized 66
regular contribution 64
Required Beginning Date 68
Roth Advantage cover
Roth IRA cover
Standard Roth cover
SAI cover
SEC cover
TOPS 7
Traditional IRA cover
TSA cover
unit 42
unit investment trust 78
variable investment options 36
To make this prospectus easier to read, we sometimes use different words than
in the contract. This is illustrated below. Although we do use different words,
they have the same meaning in this prospectus as in the contract or
supplemental materials. Your Equitable associate can provide further
explanation about your contract.
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Prospectus Contract or Supplemental Materials
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fixed maturity options Guarantee Periods
variable investment options Investment Funds or Investment Divisions
account value Annuity Account Value
rate to maturity Guaranteed Rates
guaranteed interest option Guaranteed Interest Account
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INDEX OF KEY WORDS AND PHRASES 5
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In this prospectus, we use a "series" number when necessary to identify a
particular contract. We discuss five series of contracts. However, only four
are available for new purchasers. Once you have purchased a contract you can
identify the EQUI-VEST series you have by referring to your confirmation
notice, or you may contact your Equitable associate, or you may call our
toll-free number. The series designations are as follows:
<TABLE>
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<S> <C>
o NQ, Traditional IRA, and QP IRA contracts issued before January 3, 1994; series 100
and
This series is no longer available for
o Standard Roth IRA contracts converted from such IRA and QP IRA contacts. new purchasers. Information in this
prospectus on this series is provided
for our existing contract owners only.
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o All NQ, Traditional IRA and QP IRA contracts issued in the state of Oregon series 200
on or after August 17, 1995.
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o NQ, Traditional IRA, QP IRA, and Standard Roth IRA contracts issued on or series 300
after January 3, 1994 and before the date series 400 contracts became
available in a state; and
o Standard Roth IRA contracts converted from such IRA and QP IRA contracts.
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o NQ, Traditional IRA, QP IRA, and Standard Roth IRA contracts issued on or series 400
after July 10, 1995 in states where approved; and
o Standard Roth IRA contracts converted from such IRA and QP IRA contracts.
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o Roth Advantage contracts. series 500
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</TABLE>
We also have contracts that we refer to as "original contracts." These
contracts are no longer available for new purchasers. Any information about
original contracts which is different from the current series we offer can be
found in Appendix I, which will be referenced throughout this prospectus when
it applies.
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6 WHO IS EQUITABLE LIFE?
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Who is Equitable Life?
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a wholly owned subsidiary of The
Equitable Companies Incorporated ("Equitable Companies"), whose majority
shareholder is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contracts. During 1999, Equitable Companies plans to change its
name to AXA Financial, Inc.
Equitable Companies and its consolidated subsidiaries managed approximately
$347.5 billion in assets as of December 31, 1998. For over 100 years we have
been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home
office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
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WHO IS EQUITABLE LIFE? 7
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HOW TO REACH US
You may communicate with our Processing Office as listed below for any of the
following purposes:
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FOR NQ AND IRA OWNERS WHO SEND
CONTRIBUTIONS INDIVIDUALLY BY REGULAR MAIL:
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Equitable Life
EQUI-VEST
Individual Collections
P.O. Box 13459
Newark, NJ 07188-0459
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FOR NQ AND IRA OWNERS WHO SEND
CONTRIBUTIONS INDIVIDUALLY BY EXPRESS
DELIVERY:
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Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attn: Box 13459
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
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Equitable Life
EQUI-VEST
P.O. Box 2996
New York, NY 10116-2996
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
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Equitable Life
EQUI-VEST
200 Plaza Drive, 2nd Floor
Secaucus, NJ 07094
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FOR NQ AND IRA CONTRIBUTIONS REMITTED BY
EMPLOYERS AND SENT BY REGULAR MAIL:
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Equitable Life
EQUI-VEST
Unit Collections
P.O. Box 13463
Newark, New Jersey 07188-0463
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FOR NQ AND IRA CONTRIBUTIONS REMITTED BY
EMPLOYERS AND SENT BY EXPRESS DELIVERY:
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Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attn: Box 13463
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o annual statement of your contract values as of the close of the calendar
year;
o statement of your contract values as of the last day of the contract year.
We reserve the right to change the frequency of these
reports.
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TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") SYSTEM:
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TOPS is designed to provide you with up-to-date information
via touch-tone telephone. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options.
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8 WHO IS EQUITABLE LIFE?
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You can also:
o change your allocation percentages and/or transfer among the variable
investment options and the guaranteed interest option;
o elect the investment simplifier; and
o change your personal identification number ("PIN").
TOPS is normally available seven days a week, 24 hours a day, by calling
toll-free 1 (800) 755-7777. Of course, for reasons beyond our control, the
service may sometimes be unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone are genuine. For example, we will require certain
personal identification information before we will act on telephone
instructions and we will provide written confirmation of your transfers. We
will not be liable for following telephone instructions we reasonably believe
to be genuine.
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BY INTERNET:
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You can also access information about your contract on the
Internet. Please visit our website at http://www.equitable.com,
and click on EQAccess.
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CUSTOMER SERVICE REPRESENTATIVE:
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You may also use our toll-free number 1 (800) 628-6673 to
speak with one of our customer service representatives. Our
customer service representatives are available on each
business day Monday through Thursday from 8:00 a.m. to
7:00 p.m., and on Fridays until 5:00 p.m. Eastern Time.
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TOLL-FREE TELEPHONE SERVICE:
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You may reach us toll-free by calling 1 (800) 841-0801 for a
recording of daily unit values for the variable investment
options.
You should send all contributions, notices, and requests to
our Processing Office at an address above.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) cancellation of your Standard Roth IRA or Roth Advantage contract and
return to a Traditional IRA contract;
(2) election of the automatic investment program;
(3) election of the automatic transfer options investment simplifier;
(4) election of the automatic NQ deposit service;
(5) election of the rebalancing program;
(6) to obtain a PIN required for TOPS;
(7) election of required minimum distribution option;
(8) tax withholding election;
(9) beneficiary continuation option election;
(10) conversion of your Traditional IRA to a Standard Roth IRA or Roth
Advantage; and
(11) request for a transfer/rollover of assets or 1035 exchange to another
carrier.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers among investment options;
(4) withdrawal requests; and
(5) contract surrender.
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WHO IS EQUITABLE LIFE? 9
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TO CHANGE OR CANCEL ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) investment simplifier; and
(3) rebalancing program.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us
to take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner.
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10 EQUI-VEST at a glance -- key features
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EQUI-VEST at a glance -- key features
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<TABLE>
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<S> <C>
Professional EQUI-VEST's variable investment options invest in 24 different Portfolios managed by
investment professional investment advisers.
management
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Guaranteed interest o Principal and interest guarantees
option
o Interest rates set periodically
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Fixed maturity o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
options
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
o Principal guarantees.
-- If you make withdrawals or transfers from a fixed maturity option before maturity, there
will be a market value adjustment due to differences in interest rates. This may increase
or decrease any value that you have left in that fixed maturity option. If you surrender
your contract, a market value adjustment may also apply.
o Only available under series 400 and 500 contracts in states where approved.
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Tax Advantages o On earnings inside the No tax on any dividends, interest or capital gains until you
contract make withdrawals from your contract or receive annuity
payments.
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o On transfers inside the No tax on transfers among investment options.
contract
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If you are buying a contract to fund a retirement plan that already provides tax deferral
under the Internal Revenue Code (IRA and QP IRA) you should do so for the contract's features
and benefits other than tax deferral. In such situations, the tax deferral of the contract
does not provide additional benefits.
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Minimum contribution o NQ:
amounts -- $1,000 (initial) or $50 (initial for payroll deduction); $50 (additional).
o Traditional IRA, Standard Roth IRA and Roth Advantage:
-- series 300, 400 and 500 - $50 (initial and additional);
-- series 100 and 200 - $20 (initial and additional).
o QP IRA:
-- series 300 and 400 - $2,500 each rollover amount;
-- series 100 and 200 - $1,000 each rollover amount.
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Maximum limits may apply.
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</TABLE>
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EQUI-VEST AT A GLANCE - KEY FEATURES 11
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Access to your money o Lump sum withdrawals
o Withdrawals on a periodic basis
o Contract surrender
You may be subject to a withdrawal charge for certain
withdrawals. You may also incur income tax and a
penalty tax.
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Payout alternatives o Annuity payout options
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Additional features o Dollar-cost averaging by automatic transfers
-- Interest sweep option
-- Fixed-dollar option
o Automatic investment program
o Account value rebalancing (quarterly, semiannually
and annually)
o No charge on transfers among investment options
o Waiver of withdrawal charge for disability,
confinement to a nursing home and terminal illness
(series 300, 400 and 500 only)
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Fees and charges under o Daily charge on amounts invested in variable
series 300, 400 and 500 investment options for mortality and expense risks
and other expenses at annual rates determined by
contract series.
-- series 300 and 400 - 1.35%
-- series 500 - 1.45%
o Annual administrative charge.
-- $30 currently or during the first two contract
years 2% of the account value if less ($65
maximum).
o Third party transfer or exchange
-- $25 currently ($65 maximum) per occurrence.
o No sales charge deducted when you make
contributions under any series.
o Withdrawal charge
All contract types:
6% of contributions that have been withdrawn if
such contributions were made in the current and
five prior contract years. There is no charge in
any contract year in which the amount withdrawn
does not exceed 10% of your account value at the
time of your withdrawal request minus prior
withdrawals in that contract year. There are many
circumstances under which the withdrawal charge
will not apply. They are discussed under "Charges
and expenses" later in this prospectus.
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The 12-month period beginning on your contract date
and each 12-month period after that date is a
"contract year." The end of each 12-month period is
your "contract date anniversary." The "contract date"
is the effective date of a contract. This usually is
the business day we receive your initial contribution.
Your contract date will be shown in your contract.
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12 EQUI-VEST AT A GLANCE - KEY FEATURES
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Fees and charges under o We also deduct a charge for taxes such as premium
series 300, 400, and 500 taxes that may be imposed in your state. The charge
(continued) is generally deducted from the amount applied to
an annuity payout option.
o We generally deduct a $350 annuity administrative
fee from amounts applied to purchase certain life
annuity payout options.
o Annual expenses of The Hudson River Trust and EQ
Advisors Trust Portfolios are calculated as a
percentage of the average daily net assets invested
in each Portfolio. These expenses include
management and advisory fees ranging from 0.31% to
1.15% annually, other expenses and, for EQ Advisors
Trust, 12b-1 fees of 0.25% annually.
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Fees and charges under o Daily charge on amounts invested in variable
series 100 and 200 investment options for mortality and expense risks
and other expenses at annual rates determined by
contract series.
series 100 - 1.34%;
three options at 1.49%
series 200 - 1.34%; three options at 1.40%
o Annual administrative charge: $30 maximum
o Third party transfer or exchange: none
o No sales charges are deducted when you make
contributions
o Withdrawal charge:
-- for NQ -- 6% of the contributions that have been
withdrawn if such contributions were made in the
current and five prior contract years, or
-- for IRAs -- 6% generally declining for the first
through 12th contract years. The total of all
withdrawal charges may not exceed 8% of all
contributions made during a specified period
before the withdrawal is made.
o We also deduct a charge for taxes such as premium
taxes that may be imposed in your state. The charge
is generally deducted from the amount applied to an
annuity payout option.
o We generally deduct a $350 annuity administrative
fee from amounts applied to purchase certain life
annuity payout options.
o Annual expenses of The Hudson River Trust and EQ
Advisors Trust Portfolios are calculated as a
percentage of the average daily net assets invested
in each Portfolio. These expenses include
management and advisory fees ranging from 0.31% to
1.15% annually, other expenses and, for EQ Advisors
Trust, 12b-1 fees of 0.25% annually.
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. MAXIMUM EXPENSE
LIMITATIONS APPLY TO CERTAIN VARIABLE INVESTMENT OPTIONS, AND RIGHTS ARE
RESERVED TO CHANGE OR WAIVE CERTAIN CHARGES WITHIN SPECIFIED LIMITS. ALSO, ALL
FEATURES OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT
CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
Equitable associate, or call us, if you have any questions.
<PAGE>
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FEE TABLE 13
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Fee table
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The fee tables below will help you understand the various charges and expenses
that apply to your contract series. The tables reflect charges you will
directly incur under the contract, as well as charges and expenses of the
Portfolios that you will bear indirectly. Charges for taxes, such as premium
taxes, may also apply. Also, an administrative fee may apply when your annuity
payments are to begin. Each of the charges and expenses is more fully described
under "Charges and expenses" later in this prospectus. For a complete
description of Portfolio charges and expenses, please see the attached
prospectuses for The Hudson River Trust and EQ Advisors Trust.
The guaranteed interest option and fixed maturity options are not covered by
the fee tables and examples. The only charges shown in the tables that apply to
the guaranteed interest option and fixed maturity options are the withdrawal
charge, the annual administrative charge, and the third party transfer or
exchange fee. Also, an administrative fee may apply when your annuity payments
are to begin. A market value adjustment (up or down) may apply as a result of a
withdrawal, transfer or surrender of amounts from a fixed maturity option.
EQUI-VEST SERIES 300, 400 AND 500 CONTRACTS
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Charges we deduct from your variable investment options (Separate Account A)
expressed as an annual percentage of daily net assets
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series 300 and 400 series 500
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Mortality and expense risk(1) 1.10% 1.20%
Other expenses(2) 0.25% 0.25%
---- ----
Total Separate Account A annual expenses(3) 1.35% 1.45%
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Charges we deduct from your account value on each contract date anniversary
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Annual administrative charge(4) $30
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Charges we deduct from your account value at the time you request certain
transactions
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Maximum withdrawal charge(5) 6%
Third party transfer or exchange fee(6) $25 for each occurrence
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14 FEE TABLE
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THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
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Investment Total
Management & Other Annual
Advisory Fees Expenses Expenses(7)
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<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.02% 0.56%
Alliance Balanced 0.41% 0.04% 0.45%
Alliance Common Stock 0.36% 0.03% 0.39%
Alliance Conservative Investors 0.48% 0.05% 0.53%
Alliance Equity Index 0.31% 0.03% 0.34%
Alliance Global 0.64% 0.07% 0.71%
Alliance Growth & Income 0.55% 0.03% 0.58%
Alliance Growth Investors 0.51% 0.04% 0.55%
Alliance High Yield 0.60% 0.03% 0.63%
Alliance Intermediate Government Securities 0.50% 0.05% 0.55%
Alliance International 0.90% 0.16% 1.06%
Alliance Money Market 0.35% 0.02% 0.37%
Alliance Quality Bond 0.53% 0.04% 0.57%
Alliance Small Cap Growth 0.90% 0.06% 0.96%
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</TABLE>
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
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Investment
Management &
Advisory Fees 12b-1 Fee(8)
- -----------------------------------------------------------------------
MFS Emerging Growth Companies 0.55% 0.25%
MFS Research 0.55% 0.25%
Merrill Lynch Basic Value Equity 0.55% 0.25%
Merrill Lynch World Strategy 0.70% 0.25%
Morgan Stanley Emerging Markets Equity 1.15% 0.25%
EQ/Putnam Balanced 0.55% 0.25%
EQ/Putnam Growth & Income Value 0.55% 0.25%
T. Rowe Price Equity Income 0.55% 0.25%
T. Rowe Price International Stock 0.75% 0.25%
Warburg Pincus Small Company Value 0.65% 0.25%
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Total
Other Annual
Expenses Expenses
(After Expense Limitation) (After Expense Limitation)(9)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
MFS Emerging Growth Companies 0.05% 0.85%
MFS Research 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.05% 0.85%
Merrill Lynch World Strategy 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 0.35% 1.75%
EQ/Putnam Balanced 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.05% 0.85%
T. Rowe Price Equity Income 0.05% 0.85%
T. Rowe Price International Stock 0.20% 1.20%
Warburg Pincus Small Company Value 0.10% 1.00%
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) For the series 300 and 400 contracts we currently charge 0.25% for the
Alliance Aggressive Stock, Alliance Balanced, Alliance Common Stock, and
Alliance Money Market Portfolios. The charge is 0.24% for all the other
Portfolios. We reserve the right to increase this charge to 0.25% at our
discretion.
(3) The total Separate Account A annual expenses of the variable investment
options are not permitted to exceed a total annual rate of 1.35% (for
series 300 and 400 contracts) and 2.00% (for series 500 contracts).
(4) For the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value. Thereafter, the charge is $30 for each
contract year. We reserve the right to waive or increase this charge to
an annual maximum of $65.
(5) Deducted upon a withdrawal of amounts in excess of the 10% free
withdrawal amount. Important exceptions and limitations may eliminate or
reduce this charge.
(6) We reserve the right to increase this charge to a maximum of $65 for each
occurrence.
(7) The fees and expenses shown for all Portfolios are for the year ended
December 31, 1998. The investment management and advisory fee for each
Portfolio of The Hudson River Trust may vary from year to year depending
upon the average daily net assets of the respective Portfolio. The
maximum investment management and advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. See the
prospectus for The Hudson River Trust. The other direct operating
expenses will also fluctuate from year to year depending on actual
expenses.
(8) The Class 1B shares of EQ Advisors Trust are subject to fees imposed
under a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors
Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. The 12b-1 fee will not be increased for the life of the
contracts.
(9) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. See the prospectus for EQ Advisors Trust. The amounts shown
as "Other Expenses" will fluctuate from year to year depending on actual
expenses. However, EQ Financial Consultants, Inc. ("EQF"), EQ Advisors
Trust 's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement EQF 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 average daily
net assets of each Portfolio as follows: 0.60% for EQ/Putnam Growth &
Income Value, MFS Emerging Growth Companies, MFS Research, Merrill Lynch
Basic Value Equity, 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 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth and Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity, 0.45% for EQ/Putnam Balanced; 0.40% for
T. Rowe Price International Stock; and 0.27% for Warburg Pincus Small
Company Value.
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF 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.
<PAGE>
- --------------------------------------------------------------------------------
16 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 300 AND 400 CONTRACTS
For each type of series 300 and 400 contract, the examples below show the
expenses that a hypothetical contract owner would pay in the situations
illustrated. We assume a $1,000 contribution is invested in one of the variable
investment options listed, and a 5% annual return is earned on the assets in
that option. We also assume there is no waiver of the withdrawal charge.(1) We
calculate the annual administrative charge by using the total actual annual
administrative charges for 1998 under all EQUI-VEST contracts as a percentage
of the total assets held under all EQUI-VEST contracts.
These examples should not be considered a representation of past or future
expenses for each option. 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.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
If you surrender your contract at the end
of each period shown, the expenses
would be:
-------------------------------------------------
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------------
The Hudson River Trust Options
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $76.23 $122.66 $169.46 $235.96
Alliance Balanced $75.14 $119.37 $163.58 $223.95
Alliance Common Stock $75.53 $120.57 $165.72 $228.34
Alliance Conservative Investors $75.83 $121.47 $167.33 $231.61
Alliance Equity Index $73.95 $115.76 $157.13 $210.70
Alliance Global $77.62 $126.85 $176.91 $251.05
Alliance Growth & Income $76.33 $122.96 $169.99 $237.05
Alliance Growth Investors $76.03 $122.07 $168.39 $233.79
Alliance High Yield $76.82 $124.46 $172.66 $242.45
Alliance Intermediate Government Securities $76.03 $122.07 $168.39 $233.79
Alliance International $81.09 $137.27 $195.33 $287.85
Alliance Money Market $74.34 $116.96 $159.28 $215.14
Alliance Quality Bond $76.23 $122.66 $169.46 $235.96
Alliance Small Cap Growth $80.10 $134.30 $190.09 $277.47
- -----------------------------------------------------------------------------------------------
<CAPTION>
If you do not surrender your contract at
the end of each period shown, the
expenses would be:
------------------------------------------------
1 year 3 years 5 years 10 years
- ----------------------------------------------------------------------------------------------
The Hudson River Trust Options
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $20.64 $63.77 $109.46 $235.96
Alliance Balanced $19.49 $60.27 $103.58 $223.95
Alliance Common Stock $19.91 $61.54 $105.72 $228.34
Alliance Conservative Investors $20.22 $62.50 $107.33 $231.61
Alliance Equity Index $18.23 $56.45 $ 97.13 $210.70
Alliance Global $22.11 $68.21 $116.91 $251.05
Alliance Growth & Income $20.75 $64.09 $109.99 $237.05
Alliance Growth Investors $20.43 $63.13 $108.39 $233.79
Alliance High Yield $21.27 $65.67 $112.66 $242.45
Alliance Intermediate Government Securities $20.43 $63.13 $108.39 $233.79
Alliance International $25.79 $79.25 $135.33 $287.85
Alliance Money Market $18.65 $57.72 $ 99.28 $215.14
Alliance Quality Bond $20.64 $63.77 $109.46 $235.96
Alliance Small Cap Growth $24.74 $76.10 $130.09 $277.47
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
If you surrender your contract at the end
of each period shown, the expenses
would be:
-------------------------------------------------
1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------
EQ Advisors Trust Options
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
- ------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------
If you do not surrender your contract at
the end of each period shown, the
expenses would be:
------------------------------------------------
1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------
EQ Advisors Trust Options
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Emerging Growth Companies $23.58 $ 72.63 $124.31 $265.93
MFS Research $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $ 83.64 $142.62 $302.21
Morgan Stanley Emerging Markets Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $ 74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $ 83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $ 77.36 $132.19 $281.64
- ------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see Note (1) above), and
you elect a life annuity payout option, the expenses shown in the above example
for "if you do not surrender your contract" would, in each case, be increased
by $4.43 based on the average amount applied to annuity payout options in 1998.
See "Annuity administrative fee" under "Charges and expenses."
<PAGE>
- --------------------------------------------------------------------------------
18 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 500 CONTRACTS
For the series 500 Roth Advantage contract, the examples show the expenses that
a hypothetical contract owner would pay in the situations illustrated. We
assume a single contribution of $1,000 is invested in one of the variable
investment options listed and a 5% annual return is earned on assets in that
option. We also assume there is no waiver of the withdrawal charge.(1) We
calculate the annual administrative charge by using the total actual annual
administrative charges for 1998 under all EQUI-VEST contracts as a percentage
of the total assets held under all EQUI-VEST contracts.
These examples should not be considered a representation of past or future
expense for each option. 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.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
If you surrender your If you do not surrender
contract at the end your contract at
of each period shown, the the end of each period
expenses shown, the
would be: expenses would be:
-------------------------- -------------------------
1 year 3 years 1 year 3 years
- ------------------------------------------------------------------------------------------
The Hudson River Trust Options
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $77.22 $125.66 $21.69 $66.94
Alliance Balanced $76.13 $122.37 $20.54 $63.45
Alliance Common Stock $76.53 $123.56 $20.96 $64.72
Alliance Conservative Investors $76.92 $124.76 $21.38 $65.99
Alliance Equity Index $75.04 $119.07 $19.38 $59.95
Alliance Global $78.71 $130.13 $23.27 $71.69
Alliance Growth & Income $77.42 $126.25 $21.90 $67.57
Alliance Growth Investors $77.12 $125.36 $21.59 $66.62
Alliance High Yield $77.92 $127.75 $22.43 $69.16
Alliance Intermediate Government
Securities $77.12 $125.36 $21.59 $66.62
Alliance International $82.19 $140.52 $26.94 $82.70
Alliance Money Market $75.34 $119.97 $19.70 $60.91
Alliance Quality Bond $77.32 $125.96 $21.80 $67.26
Alliance Small Cap Growth $81.19 $137.56 $25.89 $79.56
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
If you surrender your If you do not surrender
contract at the end your contract at
of each period shown, the the end of each period
expenses shown, the
would be: expenses would be:
-------------------------- -------------------------
1 year 3 years 1 year 3 years
- ---------------------------------------------------------------------------------------------
EQ Advisors Trust Options
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Emerging Growth Companies $80.10 $134.30 $24.74 $ 76.10
MFS Research $80.10 $134.30 $24.74 $ 76.10
Merrill Lynch Basic Value Equity $80.10 $134.30 $24.74 $ 76.10
Merrill Lynch World Strategy $83.58 $144.66 $28.41 $ 87.08
Morgan Stanley Emerging Markets
Equity $89.04 $160.78 $34.18 $104.17
EQ/Putnam Balanced $80.60 $135.78 $25.26 $ 77.67
EQ/Putnam Growth & Income Value $80.10 $134.30 $24.74 $ 76.10
T. Rowe Price Equity Income $80.10 $134.30 $24.74 $ 76.10
T. Rowe Price International Stock $83.58 $144.66 $28.41 $ 87.08
Warburg Pincus Small Company Value $81.59 $138.75 $26.31 $ 80.82
- ---------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see note (1) above), and
you elect a life annuity payout option, the expenses shown in the example for
"if you do not surrender your contract" would, in each case, be increased by
$4.43 based on the average amount applied to annuity payout options in 1998.
See "Annuity administrative fee" under "Charges and expenses."
<PAGE>
- --------------------------------------------------------------------------------
20 FEE TABLE
- --------------------------------------------------------------------------------
EQUI-VEST SERIES 200 CONTRACTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your variable investment options (Separate Account A)
expressed as an annual percentage of daily net assets
- --------------------------------------------------------------------------------------------------------------------------
Alliance Balanced,
Alliance Common Stock, and
Alliance Money Market options
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Mortality and expense risk(1) 1.15%
Other expenses(2) 0.25%
----
Total Separate Account A annual expenses(3)(4) 1.40%
- --------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value on each contract date anniversary
- --------------------------------------------------------------------------------------------------------------------------
Annual administrative charges(5) $30
- --------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- --------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6) 6%
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
All other variable
investment options
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Mortality and expense risk(1) 1.09%
Other expenses(2) 0.25%
----
Total Separate Account A annual expenses(3)(4) 1.34%
- --------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value on each contract date anniversary
- --------------------------------------------------------------------------------------------------------------------------
Annual administrative charges(5)
- --------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- --------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Total
Investment Annual
Management & Other Expenses
Advisory Fees Expenses (After Expense Limitation)(4)(7)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.02% 0.56%
Alliance Balanced 0.41% 0.04% 0.45%
Alliance Common Stock 0.36% 0.03% 0.39%
Alliance Conservative Investors 0.48% 0.05% 0.53%
Alliance Equity Index 0.31% 0.03% 0.34%
Alliance Global 0.64% 0.07% 0.71%
Alliance Growth & Income 0.55% 0.03% 0.58%
Alliance Growth Investors 0.51% 0.04% 0.55%
Alliance High Yield 0.60% 0.03% 0.63%
Alliance Intermediate Government Securities 0.50% 0.05% 0.55%
Alliance International 0.90% 0.16% 1.06%
Alliance Money Market 0.35% 0.02% 0.37%
Alliance Quality Bond 0.53% 0.04% 0.57%
Alliance Small Cap Growth 0.90% 0.06% 0.96%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- ------------------------------------------------------------------------
Investment
Management &
Advisory Fees 12b-1 Fee(8)
- ------------------------------------------------------------------------
MFS Emerging Growth Companies 0.55% 0.25%
MFS Research 0.55% 0.25%
Merrill Lynch Basic Value Equity 0.55% 0.25%
Merrill Lynch World Strategy 0.70% 0.25%
Morgan Stanley Emerging Markets Equity 1.15% 0.25%
EQ/Putnam Balanced 0.55% 0.25%
EQ/Putnam Growth & Income Value 0.55% 0.25%
T. Rowe Price Equity Income 0.55% 0.25%
T. Rowe Price International Stock 0.75% 0.25%
Warburg Pincus Small Company Value 0.65% 0.25%
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Total
Other Annual
Expenses Expenses
(After Expense Limitation) (After Expense Limitation)(9)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
MFS Emerging Growth Companies 0.05% 0.85%
MFS Research 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.05% 0.85%
Merrill Lynch World Strategy 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 0.35% 1.75%
EQ/Putnam Balanced 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.05% 0.85%
T. Rowe Price Equity Income 0.05% 0.85%
T. Rowe Price International Stock 0.20% 1.20%
Warburg Pincus Small Company Value 0.10% 1.00%
- ----------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) This charge is for financial accounting and other administrative services
related to the contract.
(3) Total Separate Account A annual expenses of the variable investment
options (not including The Hudson River Trust or the EQ Advisors Trust
fees and other expenses) are guaranteed not to exceed a total annual rate
of 1.40% for the Alliance Balanced, Alliance Common Stock, and Alliance
Money Market options and an annual rate of 1.34% for all the other
options.
(4) The total Separate Account A annual expenses of the variable investment
options and total annual expenses of The Hudson River Trust fees when
added together are not permitted to exceed an annual rate of 1.75% for
the Alliance Aggressive Stock, Alliance Balanced, Alliance Common Stock,
and Alliance Money Market options. Without this expense limitation, the
total annual expenses deducted from the variable investment options plus
The Hudson River Trust annual expenses for 1998 would have been 1.77% for
the Alliance Money Market option; 1.79% for the Alliance Common Stock
option; 1.90% for the Alliance Aggressive Stock option; and 1.85% for the
Alliance Balanced option.
(5) 2% of your account value if less. Some contracts are exempt from this
charge.
(6) Deducted upon a withdrawal of amounts in excess of the 10% free
withdrawal amount. Important exceptions and limitations may eliminate or
reduce this charge.
(7) The fees and expenses shown for all Portfolios are for the year ended
December 31, 1998. The investment management and advisory fee for each
Portfolio of The Hudson River Trust may vary from year to year depending
upon the average daily net assets of the respective Portfolio. The
maximum investment advisory fees, however, cannot be increased without a
vote of that Portfolio's shareholders. See the prospectus for The Hudson
River Trust. The other direct operating expenses will also fluctuate from
year to year depending on actual expenses. See the expense limitations
discussed in footnote (4).
(8) The Class 1B shares of EQ Advisors Trust are subject to fees imposed
under a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors
Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. The 12b-1 fee will not be increased for the life of the
contracts.
(9) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. See the prospectus for EQ Advisors Trust. The amounts shown
as "Other Expenses" will fluctuate from year to year depending on actual
expenses. However, EQ Financial Consultants, Inc. ("EQF"), EQ Advisors
Trust 's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement EQF 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 average daily
net assets of each Portfolio as follows: 0.60% for EQ/Putnam Growth &
Income Value, MFS Emerging Growth Companies, MFS Research, Merrill Lynch
Basic Value Equity, 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.
<PAGE>
- --------------------------------------------------------------------------------
22 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Absent the expense limitation, "Other Expenses" for 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth and Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity; 0.45% for EQ/Putnam Balanced; 0.40% for
T. Rowe Price International Stock; and 0.27% for Warburg Pincus Small
Company Value.
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF 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.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 200 CONTRACTS
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume a $1,000 contribution is invested
in one of the variable investment options listed, and a 5% annual return is
earned on the assets in that option. We also assume there is no waiver of the
withdrawal charge.(1) We calculate the annual administrative charge by using
the total actual annual administrative charges for 1998 under all EQUI-VEST
contracts as a percentage of the total assets held under all EQUI-VEST
contracts.
These examples should not be considered a representation of past or future
expenses for each option. 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.
FOR IRA (TRADITIONAL, STANDARD ROTH AND CERTAIN QP IRA(2) CONTRACTS WHERE THE
FREE WITHDRAWAL AMOUNT APPLIES AFTER THE THIRD CONTRACT YEAR):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
If you surrender your contract at the end of each
period shown,
the expenses would be:
--------------------------------------------------------
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------------
The Hudson River Trust Options
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $80.83 $124.44 $163.81 $255.10
Alliance Balanced $80.83 $124.44 $163.81 $255.10
Alliance Common Stock $80.83 $124.44 $163.81 $255.10
Alliance Conservative Investors $82.01 $128.02 $169.86 $267.82
Alliance Equity Index $80.14 $122.35 $160.27 $247.62
Alliance Global $83.79 $133.37 $178.87 $286.60
Alliance Growth & Income $82.50 $129.51 $172.37 $273.07
Alliance Growth Investors $82.21 $128.61 $170.86 $269.92
Alliance High Yield $83.00 $130.99 $174.87 $278.29
Alliance Intermediate Government
Securities $82.21 $128.61 $170.86 $269.92
Alliance International $87.24 $143.71 $196.19 $322.15
Alliance Money Market $80.83 $124.44 $163.81 $255.10
Alliance Quality Bond $82.41 $129.21 $171.87 $272.02
Alliance Small Cap Growth $86.25 $140.76 $191.27 $312.12
- -----------------------------------------------------------------------------------------------
EQ Advisors Trust Options
- -----------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $85.17 $137.51 $185.83 $300.97
MFS Research $85.17 $137.51 $185.83 $300.97
Merrill Lynch Basic Value Equity $85.17 $137.51 $185.83 $300.97
Merrill Lynch World Strategy $88.62 $147.83 $203.05 $336.02
Morgan Stanley Emerging Markets
Equity $94.05 $163.88 $229.58 $388.62
EQ/Putnam Balanced $85.66 $138.99 $188.30 $306.06
EQ/Putnam Growth & Income Value $85.17 $137.51 $185.83 $300.97
T. Rowe Price Equity Income $85.17 $137.51 $185.83 $300.97
T. Rowe Price International Stock $88.62 $147.83 $203.05 $336.02
Warburg Pincus Small Company Value $86.65 $141.94 $193.24 $316.15
- -----------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 26.
<PAGE>
- --------------------------------------------------------------------------------
24 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR QP IRA(3) CONTRACTS (WHERE THE FREE WITHDRAWAL AMOUNT APPLIES IN THE FIRST
CONTRACT YEAR):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
If you surrender your contract at the end of each
period shown,
the expenses would be:
--------------------------------------------------------
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------------
The Hudson River Trust Options
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $163.81 $255.10
Alliance Balanced $74.64 $117.86 $163.81 $255.10
Alliance Common Stock $74.64 $117.86 $163.81 $255.10
Alliance Conservative Investors $75.83 $121.47 $169.86 $267.82
Alliance Equity Index $73.95 $115.76 $160.27 $247.62
Alliance Global $77.62 $126.85 $178.87 $286.60
Alliance Growth & Income $76.33 $122.96 $172.37 $273.07
Alliance Growth Investors $76.03 $122.07 $170.86 $269.92
Alliance High Yield $76.82 $124.46 $174.87 $278.29
Alliance Intermediate Government
Securities $76.03 $122.07 $170.86 $269.92
Alliance International $81.09 $137.27 $196.19 $322.15
Alliance Money Market $74.64 $117.86 $163.81 $255.10
Alliance Quality Bond $76.23 $122.66 $171.87 $272.02
Alliance Small Cap Growth $80.10 $134.30 $191.27 $312.12
- -----------------------------------------------------------------------------------------------
EQ Advisors Trust Options
- -----------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $79.01 $131.03 $185.83 $300.97
MFS Research $79.01 $131.03 $185.83 $300.97
Merrill Lynch Basic Value Equity $79.01 $131.03 $185.83 $300.97
Merrill Lynch World Strategy $82.48 $141.41 $203.05 $336.02
Morgan Stanley Emerging Markets
Equity $87.94 $157.57 $229.58 $388.62
EQ/Putnam Balanced $79.51 $132.51 $188.30 $306.06
EQ/Putnam Growth & Income Value $79.01 $131.03 $185.83 $300.97
T. Rowe Price Equity Income $79.01 $131.03 $185.83 $300.97
T. Rowe Price International Stock $82.48 $141.41 $203.05 $336.02
Warburg Pincus Small Company Value $80.50 $135.49 $193.24 $316.15
- -----------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 26.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR NQ CONTRACTS:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
If you surrender your contract at the end of each
period shown,
the expenses would be:
--------------------------------------------------------
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------------
The Hudson River Trust Options
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $160.90 $218.45
Alliance Balanced $74.64 $117.86 $160.90 $218.45
Alliance Common Stock $74.64 $117.86 $160.90 $218.45
Alliance Conservative Investors $75.83 $121.47 $167.33 $231.61
Alliance Equity Index $73.95 $115.76 $157.13 $210.70
Alliance Global $77.62 $126.85 $176.91 $251.05
Alliance Growth & Income $76.33 $122.96 $169.99 $237.05
Alliance Growth Investors $76.03 $122.07 $168.39 $233.79
Alliance High Yield $76.82 $124.46 $172.66 $242.45
Alliance Intermediate Government
Securities $76.03 $122.07 $168.39 $233.79
Alliance International $81.09 $137.27 $195.33 $287.85
Alliance Money Market $74.64 $117.86 $160.90 $218.45
Alliance Quality Bond $76.23 $122.66 $169.46 $235.96
Alliance Small Cap Growth $80.10 $134.30 $190.09 $277.47
- -----------------------------------------------------------------------------------------------
EQ Advisors Trust Options
- -----------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets
Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
26 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR ALL SERIES 200 CONTRACTS:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH
PERIOD SHOWN,
THE EXPENSES WOULD BE:
--------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Balanced $18.97 $ 58.68 $100.90 $218.45
Alliance Common Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Conservative Investors $20.22 $ 62.50 $107.33 $231.61
Alliance Equity Index $18.23 $ 56.45 $ 97.13 $210.70
Alliance Global $22.11 $ 68.21 $116.91 $251.05
Alliance Growth & Income $20.75 $ 64.09 $109.99 $237.05
Alliance Growth Investors $20.43 $ 63.13 $108.39 $233.79
Alliance High Yield $21.27 $ 65.67 $112.66 $242.45
Alliance Intermediate Government
Securities $20.43 $ 63.13 $108.39 $233.79
Alliance International $25.79 $ 79.25 $135.33 $287.85
Alliance Money Market $18.97 $ 58.68 $100.90 $218.45
Alliance Quality Bond $20.64 $ 63.77 $109.46 $235.96
Alliance Small Cap Growth $24.74 $ 76.10 $130.09 $277.47
- -----------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $23.58 $ 72.63 $124.31 $265.93
MFS Research $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $ 83.64 $142.62 $302.21
Morgan Stanley Emerging Markets
Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $ 74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $ 83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $ 77.36 $132.19 $281.64
- -----------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money."
(2) These expenses also apply to a QP IRA with the number 11933I in the lower
left corner of the first page of your contract, or those QP IRA contracts
issued in Oregon.
(3) These expenses apply only to a QP IRA with the number 92QPI in the lower
left corner of the first page of your contract.
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see note 1 above), and you
elect a life annuity payout option, the expenses shown in the above example for
"if you do not surrender your contract" would, in each case, be increased by
$4.43 based on the average amount applied to annuity payout options in 1998.
See "Annuity administrative fee" under "Charges and expenses."
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 27
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQUI-VEST SERIES 100 CONTRACTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A) EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED,
ALLIANCE COMMON STOCK, AND
ALLIANCE MONEY MARKET OPTIONS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Mortality and expense risk(1) 0.65%
Other expenses(2) 0.84%
----
Total Separate Account A annual expenses(3)(4) 1.49%
- --------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- --------------------------------------------------------------------------------------------------------------------------
Annual administrative charge(5) $30
- --------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6) 6%
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
All other variable
investment options
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
Mortality and expense risk(1) 0.50%
Other expenses(2) 0.84%
----
Total Separate Account A annual expenses(3)(4) 1.34%
- -----------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value on each contract date anniversary
- -----------------------------------------------------------------------------------------------------------------
Annual administrative charge(5)
- -----------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- -----------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
TOTAL
INVESTMENT ANNUAL
MANAGEMENT & OTHER EXPENSES
ADVISORY FEES EXPENSES (AFTER EXPENSE LIMITATION)(4)(7)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.02% 0.56%
Alliance Balanced 0.41% 0.04% 0.45%
Alliance Common Stock 0.36% 0.03% 0.39%
Alliance Conservative Investors 0.48% 0.05% 0.53%
Alliance Equity Index 0.31% 0.03% 0.34%
Alliance Global 0.64% 0.07% 0.71%
Alliance Growth & Income 0.55% 0.03% 0.58%
Alliance Growth Investors 0.51% 0.04% 0.55%
Alliance High Yield 0.60% 0.03% 0.63%
Alliance Intermediate Government Securities 0.50% 0.05% 0.55%
Alliance International 0.90% 0.16% 1.06%
Alliance Money Market 0.35% 0.02% 0.37%
Alliance Quality Bond 0.53% 0.04% 0.57%
Alliance Small Cap Growth 0.90% 0.06% 0.96%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
28 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- ------------------------------------------------------------------------
INVESTMENT
MANAGEMENT &
ADVISORY FEES 12B-1 FEE(8)
- ------------------------------------------------------------------------
MFS Emerging Growth Companies 0.55% 0.25%
MFS Research 0.55% 0.25%
Merrill Lynch Basic Value Equity 0.55% 0.25%
Merrill Lynch World Strategy 0.70% 0.25%
Morgan Stanley Emerging Markets Equity 1.15% 0.25%
EQ/Putnam Balanced 0.55% 0.25%
EQ/Putnam Growth & Income Value 0.55% 0.25%
T. Rowe Price Equity Income 0.55% 0.25%
T. Rowe Price International Stock 0.75% 0.25%
Warburg Pincus Small Company Value 0.65% 0.25%
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
(AFTER EXPENSE LIMITATION) (AFTER EXPENSE LIMITATION)(9)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
MFS Emerging Growth Companies 0.05% 0.85%
MFS Research 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.05% 0.85%
Merrill Lynch World Strategy 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 0.35% 1.75%
EQ/Putnam Balanced 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.05% 0.85%
T. Rowe Price Equity Income 0.05% 0.85%
T. Rowe Price International Stock 0.20% 1.20%
Warburg Pincus Small Company Value 0.10% 1.00%
- -----------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) A portion of this charge is for providing the death benefit.
(2) This charge is for financial accounting and other administrative services
related to the contract.
(3) Total Separate Account A annual expenses of the variable investment
options (not including The Hudson River Trust or EQ Advisors Trust fees
and other expenses) are guaranteed not to exceed a total annual rate of
1.49% for the Alliance Balanced, Alliance Common Stock, and Alliance
Money Market options and an annual rate of 1.34% for all the other
options.
(4) The total Separate Account A annual expenses of the variable investment
options and total annual expenses of The Hudson River Trust fees when
added together are not permitted to exceed an annual rate of 1.75% for
the Alliance Aggressive Stock, Alliance Balanced, Alliance Common Stock,
and Alliance Money Market options. Without this expense limitation, the
total annual expenses deducted from the variable investment options plus
The Hudson River Trust annual expenses for 1998 would have been 1.86% for
the Alliance Money Market option; 1.88% for the Alliance Common Stock
option; 1.90% for the Alliance Aggressive Stock option; and 1.94% for the
Alliance Balanced option.
(5) 2% of your account value if less. Some contracts are exempt from this
charge.
(6) Deducted upon a withdrawal of amounts in excess of the 10% free
withdrawal amount. Important exceptions and limitations may eliminate or
reduce this charge.
(7) The fees and expenses for all Portfolios are for the year ended December
31, 1998. The investment management and advisory fee for each Portfolio
of The Hudson River Trust may vary from year to year depending upon the
average daily net assets of the respective Portfolio. The maximum
investment advisory fees, however, cannot be increased without a vote of
that Portfolio's shareholders. See the prospectus for The Hudson River
Trust. The other direct operating expenses will also fluctuate from year
to year depending on actual expenses. See the expense limitations
discussed in footnote (4).
(8) The Class 1B shares of EQ Advisors Trust are subject to fees imposed
under a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors
Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. The 12b-1 fee will not be increased for the life of the
contracts.
(9) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. See the prospectus for EQ Advisors Trust. The amounts shown
as "Other Expenses" will fluctuate from year to year depending on actual
expenses. However, EQ Financial Consultants, Inc. ("EQF"), EQ Advisors
Trust 's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement EQF 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 average daily
net assets of each Portfolio as follows: 0.60% for EQ/Putnam Growth &
Income Value, MFS Emerging Growth Companies, MFS Research,
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity, 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 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth and Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity ; 0.45% for EQ/Putnam Balanced; 0.40% for
T. Rowe Price International Stock; and 0.27% for Warburg Pincus Small
Company Value.
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF 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.
<PAGE>
- --------------------------------------------------------------------------------
30 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 100 CONTRACTS
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume a $1,000 contribution is invested
in one of the variable investment options listed, and a 5% annual return is
earned on the assets in that option. We also assume there is no waiver of the
withdrawal charge. (1) We calculate the annual administrative charge by using
the total actual annual administrative charges for 1998 under all EQUI-VEST
contracts as a percentage of the total assets held under all EQUI-VEST
contracts.
These examples should not be considered a representation of past or future
expenses for each option. 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.
FOR IRA (TRADITIONAL, STANDARD ROTH AND CERTAIN QP IRA(2) CONTRACTS WHERE THE
FREE WITHDRAWAL AMOUNT APPLIES AFTER THE THIRD CONTRACT YEAR):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH
PERIOD SHOWN,
THE EXPENSES WOULD BE:
------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $80.83 $124.44 $163.81 $255.10
Alliance Balanced $80.83 $124.44 $163.81 $255.10
Alliance Common Stock $80.83 $124.44 $163.81 $255.10
Alliance Conservative Investors $82.01 $128.02 $169.86 $267.82
Alliance Equity Index $80.14 $122.35 $160.27 $247.62
Alliance Global $83.79 $133.37 $178.87 $286.60
Alliance Growth & Income $82.50 $129.51 $172.37 $273.07
Alliance Growth Investors $82.21 $128.61 $170.86 $269.92
Alliance High Yield $83.00 $130.99 $174.87 $278.29
Alliance Intermediate Government Securities $82.21 $128.61 $170.86 $269.92
Alliance International $87.24 $143.71 $196.19 $322.15
Alliance Money Market $80.83 $124.44 $163.81 $255.10
Alliance Quality Bond $82.41 $129.21 $171.87 $272.02
Alliance Small Cap Growth $86.25 $140.76 $191.27 $312.12
- ------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $85.17 $137.51 $185.83 $300.97
MFS Research $85.17 $137.51 $185.83 $300.97
Merrill Lynch Basic Value Equity $85.17 $137.51 $185.83 $300.97
Merrill Lynch World Strategy $88.62 $147.83 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $94.05 $163.88 $229.58 $388.62
EQ/Putnam Balanced $85.66 $138.99 $188.30 $306.06
EQ/Putnam Growth & Income Value $85.17 $137.51 $185.83 $300.97
T. Rowe Price Equity Income $85.17 $137.51 $185.83 $300.97
T. Rowe Price International Stock $88.62 $147.83 $203.05 $336.02
Warburg Pincus Small Company Value $86.65 $141.94 $193.24 $316.15
- ------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 33.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 31
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR QP IRA(3) CONTRACTS (WHERE THE FREE WITHDRAWAL AMOUNT APPLIES STARTING IN
THE FIRST CONTRACT YEAR):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH
PERIOD SHOWN,
THE EXPENSES WOULD BE:
-------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $163.81 $255.10
Alliance Balanced $74.64 $117.86 $163.81 $255.10
Alliance Common Stock $74.64 $117.86 $163.81 $255.10
Alliance Conservative Investors $75.83 $121.47 $169.86 $267.82
Alliance Equity Index $73.95 $115.76 $160.27 $247.62
Alliance Global $77.62 $126.85 $178.87 $286.60
Alliance Growth & Income $76.33 $122.96 $172.37 $273.07
Alliance Growth Investors $76.03 $122.07 $170.86 $269.92
Alliance High Yield $76.82 $124.46 $174.87 $278.29
Alliance Intermediate Government Securities $76.03 $122.07 $170.86 $269.92
Alliance International $81.09 $137.27 $196.19 $322.15
Alliance Money Market $74.64 $117.86 $163.81 $255.10
Alliance Quality Bond $76.23 $122.66 $171.87 $272.02
Alliance Small Cap Growth $80.10 $134.30 $191.27 $312.12
- -------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $79.01 $131.03 $185.83 $300.97
MFS Research $79.01 $131.03 $185.83 $300.97
Merrill Lynch Basic Value Equity $79.01 $131.03 $185.83 $300.97
Merrill Lynch World Strategy $82.48 $141.41 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $388.62
EQ/Putnam Balanced $79.51 $132.51 $188.30 $306.06
EQ/Putnam Growth & Income Value $79.01 $131.03 $185.83 $300.97
T. Rowe Price Equity Income $79.01 $131.03 $185.83 $300.97
T. Rowe Price International Stock $82.48 $141.41 $203.05 $336.02
Warburg Pincus Small Company Value $80.50 $135.49 $193.24 $316.15
- -------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 33.
<PAGE>
- --------------------------------------------------------------------------------
32 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR NQ CONTRACTS:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH
PERIOD SHOWN,
THE EXPENSES WOULD BE:
-------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $160.90 $218.45
Alliance Balanced $74.64 $117.86 $160.90 $218.45
Alliance Common Stock $74.64 $117.86 $160.90 $218.45
Alliance Conservative Investors $75.83 $121.47 $167.33 $231.61
Alliance Equity Index $73.95 $115.76 $157.13 $210.70
Alliance Global $77.62 $126.85 $176.91 $251.05
Alliance Growth & Income $76.33 $122.96 $169.99 $237.05
Alliance Growth Investors $76.03 $122.07 $168.39 $233.79
Alliance High Yield $76.82 $124.46 $172.66 $242.45
Alliance Intermediate Government Securities $76.03 $122.07 $168.39 $233.79
Alliance International $81.09 $137.27 $195.33 $287.85
Alliance Money Market $74.64 $117.86 $160.90 $218.45
Alliance Quality Bond $76.23 $122.66 $169.46 $235.96
Alliance Small Cap Growth $80.10 $134.30 $190.09 $277.47
- -------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR ALL SERIES 100 CONTRACTS:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE
END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
----------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Balanced $18.97 $ 58.68 $100.90 $218.45
Alliance Common Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Conservative Investors $20.22 $ 62.50 $107.33 $231.61
Alliance Equity Index $18.23 $ 56.45 $ 97.13 $210.70
Alliance Global $22.11 $ 68.21 $116.91 $251.05
Alliance Growth & Income $20.75 $ 64.09 $109.99 $237.05
Alliance Growth Investors $20.43 $ 63.13 $108.39 $233.79
Alliance High Yield $21.27 $ 65.67 $112.66 $242.45
Alliance Intermediate Government Securities $20.43 $ 63.13 $108.39 $233.79
Alliance International $25.79 $ 79.25 $135.33 $287.85
Alliance Money Market $18.97 $ 58.68 $100.90 $218.45
Alliance Quality Bond $20.64 $ 63.77 $109.46 $235.96
Alliance Small Cap Growth $24.74 $ 76.10 $130.09 $277.47
- --------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- --------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $23.58 $ 72.63 $124.31 $265.93
MFS Research $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $ 83.64 $142.62 $302.21
Morgan Stanley Emerging Markets Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $ 74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $ 83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $ 77.36 $132.19 $281.64
- --------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money."
(2) These expenses also apply to a QP IRA with the number 11933I in the lower
left hand corner of the first page of your contract, or those QP IRA
contracts issued in Oregon.
(3) These expenses apply only to a QP IRA with the number 92QPI in the lower
left corner of the first page of your contract.
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see Note (1) above), and
you elect a life annuity payout option, the expenses shown in the above example
for "if you do not surrender your contract" would, in each case, be increased
by $4.43 based on the average amount applied to annuity payout options in 1998.
See "Annuity administrative fee" under "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix II at the end of this prospectus, for the unit values and
number of units outstanding as of the periods shown for each of the variable
investment options.
<PAGE>
- --------------------------------------------------------------------------------
34 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
Contract features and benefits
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us we call "contributions."
We require a minimum contribution amount for each type and series of contract.
The following table summarizes our rules regarding contributions to your
contract.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRACT MINIMUM SOURCE OF LIMITATIONS ON
TYPE CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ o $ 1,000 (initial), o After-tax money. Not applicable.
o $ 50 (additional)
(all series) o Paid to us by check or transfer
of contract value in a tax
deferred exchange under
Section 1035 of the Internal
Revenue Code.
o Paid to us by an employer who
establishes a payroll deduction
program.
- ------------------------------------------------------------------------------------------------------------------------------------
Traditional IRA o $20 (initial and additional) o "Regular" IRA contributions. o Total IRA contributions may not
(series 100 and 200) Paid to us by an employer who exceed $2,000 each year.
establishes a payroll deduction
o $50 (initial and additional) program. o No additional regular IRA
(series 300 and 400) contributions in the year you
o Rollovers from a qualified plan. turn age 70 1/2 and thereafter.
o Rollovers from a TSA. o Rollover contributions after age
70 1/2 must be net of required
o Rollovers from another minimum distributions.
traditional individual retirement
arrangement.
o Direct custodian-to-custodian
transfers from other traditional
individual retirement arrangements.
Although we accept rollover and direct transfer contributions under the
Traditional IRA contracts, we intend that these contracts be used for
ongoing regular contributions.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRACT MINIMUM SOURCE OF LIMITATIONS ON
TYPE CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Standard Roth o $20 (initial and additional) o Regular after-tax contributions. o Total IRA contributions may not
IRA and Roth (series 100 and 200) exceed $2,000 each year.
Advantage o Paid to us by an employer who
establishes a payroll deduction
o $50 (initial and additional) program. o Contributions are subject to
(series 300, 400 and 500) income limits. See "Tax
o Rollovers from another Standard information - Contributions to
Roth IRA or Roth Advantage. Roth IRAs."
o Conversion rollovers from a
Traditional IRA or QP IRA.
o Direct transfers from another
Standard Roth IRA or Roth
Advantage.
- ------------------------------------------------------------------------------------------------------------------------------------
QP IRA o $1,000 (series 100 and 200) o Rollovers from a qualified plan. o Rollover contributions after age
70 1/2 must be net of required
o $2,500 (series 300 and 400) o Rollovers from a TSA. minimum distributions.
o "Regular" after-tax
contributions are not permitted.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of
contributions and certain contribution limitations. We may refuse to accept any
contribution if the sum of all contributions under all EQUI-VEST contracts with
the same annuitant would then total more than $1,000,000. We may also refuse to
accept any contribution if the sum of all contributions under all Equitable
Life annuity accumulation contracts that you own would then total more than
$2,500,000.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
For information on when contributions are credited see "Dates and prices at
which contract events occur" later in this prospectus.
<PAGE>
- --------------------------------------------------------------------------------
36 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner.
Under any type of the IRA contract, the owner and annuitant must be the same
person.
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as indicated below, contributions must be by check drawn on a bank in
the U.S. clearing through the Federal Reserve System, in U.S. dollars, and
made payable to Equitable Life. We do not accept third party checks endorsed
to us except for rollover contributions, tax-free exchanges or trustee checks
that involve no refund. All checks are subject to our ability to collect the
funds. We reserve the right to reject a payment if it is received in an
unacceptable form.
You may also make contributions by wire transfer or our automatic investment
program. See "Other methods of payment" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive
an incomplete application or form, we will inform the Equitable associate
submitting the application on your behalf. We will then return the
contribution to you unless you specifically direct us to keep your
contribution until we receive the required information.
Generally, you may make additional contributions at any time. You may do so in
single sum amounts, on a regular basis, or as your financial situation
permits.
- --------------------------------------------------------------------------------
Generally our "business day" is any day on which Equitable Life is open and
the New York Stock Exchange is open for trading.
- --------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an NQ contract in a
tax-free exchange if you follow certain procedures as shown in the form that
we require you to use. Also see "Tax information" later in this prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the guaranteed
interest option and the fixed maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the 24 variable investment options will
depend on the investment performance of the underlying Portfolios. Listed
below are the currently available Portfolios, their investment objectives, and
their advisers.
- --------------------------------------------------------------------------------
You can choose among 24 variable investment options.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 37
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF THE HUDSON RIVER TRUST
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
Alliance Balanced High return through a combination of current Alliance Capital Management L.P.
income and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- -----------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
- -----------------------------------------------------------------------------------------------------------------------
Alliance Equity Index Total return (before The Hudson River Trust and Alliance Capital Management L.P.
Separate Account A annual expenses) that
approximates the total return performance of the
Standard & Poor's 500 Composite Stock Price
Index
- -----------------------------------------------------------------------------------------------------------------------
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
- -----------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
- -----------------------------------------------------------------------------------------------------------------------
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
- -----------------------------------------------------------------------------------------------------------------------
Alliance International Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- -----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond High current income consistent with preservation Alliance Capital Management L.P.
of capital
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
38 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MFS Emerging Growth Long-term growth of capital Massachusetts Financial Services
Companies Company
- -------------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services
Company
- -------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity Capital appreciation and, secondarily, income Merrill Lynch Asset Management, L.P.
- -------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy High total investment return Merrill Lynch Asset Management, L.P.
- -------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- -------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
- -------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Long-term growth capital Rowe Price-Fleming International, Inc.
Stock
- -------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the Portfolios is included in the separate
prospectuses for The Hudson River Trust and EQ Advisors Trust attached at the
end of this prospectus. See "Proposed substitution of Portfolios" under "More
information" for information regarding the proposed substitution of newly
created Portfolios of EQ Advisors Trust for the Portfolios of The Hudson River
Trust currently available under the variable investment options.
GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays
interest at guaranteed rates. We discuss our general account under "More
information."
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period, depending on when the
allocation is made.
Therefore, different interest rates may apply to different amounts in the
guaranteed interest option.
We credit interest daily to amounts in the guaranteed interest option. There
are three levels of interest in effect at the same time in the guaranteed
interest option:
(1) the minimum interest rate guaranteed over the life of the contract,
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
We set current interest rates periodically, according to our procedures that
we have in effect at the time. All interest rates are effective annual rates,
but before deduction of annual administrative charges or any withdrawal
charges.
The yearly guaranteed interest rate is 4% for 1999 and 4% for the year 2000.
The yearly rates we set will never be less than the minimum guaranteed
interest rate of 3% for the life of the contract. A 4% minimum may apply under
some contracts. Current interest rates will never be less than the yearly
guaranteed interest rate.
For series 500 contracts, however, the guaranteed interest rate, generally
will be 0.10% lower than the rates we set for the other contract series.
FIXED MATURITY OPTIONS
(series 400 and 500 contracts only)
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. However, you may not allocate more than one contribution to
any one fixed maturity option. These amounts become part of our general
account assets. They will accumulate interest at the "rate to maturity" for
each fixed maturity option. The total amount you allocate to and accumulate in
each fixed maturity option is called the "fixed maturity amount." The fixed
maturity options are not available in contracts issued in Maryland. For
contracts issued in New York see "Charges and expenses" for information on
withdrawal charges when amounts are allocated to the fixed maturity options.
- --------------------------------------------------------------------------------
Fixed maturity options ranging from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity
date, we will make a market value adjustment that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
prospectus under "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value
we will report for your fixed maturity amount will reflect a market value
adjustment. It will reflect the market value adjustment that we would make if
you were to withdraw all of your fixed maturity amounts on the date of the
report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on June 15th for each of the maturity years 2000 through 2009.
See "Allocating your contributions" below. As fixed maturity options expire,
we expect to add maturity years so that generally 10 are available at any
time.
We will not accept allocations to a fixed maturity option if on
the date the contribution is to be applied:
o you previously allocated a contribution or made a transfer to the same
fixed maturity option; or
o the fixed maturity option's maturity date is within the current calendar
year; or
o the fixed maturity option's maturity date is later than the date annuity
payments are to begin.
OPTIONS AT MATURITY DATE. We will notify you at least 45 days before each of
your fixed maturity options is scheduled to mature. At that time, you may
choose to have one of the following options take place on the maturity date,
as long as none of the conditions listed above or in "Allocating your
contributions," below would apply:
<PAGE>
- --------------------------------------------------------------------------------
40 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) transfer the maturity value into another available fixed maturity option,
or into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
Alliance Money Market option, or another investment option if we are required
to do so by any state regulation. Such a case is the State of New York where a
different rule applies. See "Series 400 and 500 contracts issued in New York -
fixed maturity options."
MARKET VALUE ADJUSTMENT.
If you make any withdrawals (including transfers, surrender or termination of
your contract, or when we make deductions for charges) from a fixed maturity
option before it matures we will make a market value adjustment, which will
increase or decrease any fixed maturity amount you have in that fixed maturity
option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly
reduce your value in the fixed maturity options, particularly in the fixed
maturity options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, under "More information"
later in this prospectus. Appendix III of this prospectus provides an example
of how the market value adjustment is calculated.
SELECTING YOUR INVESTMENT METHOD
You can choose either of the following two methods for selecting your
investment options:
o MAXIMUM INVESTMENT OPTIONS CHOICE. Under this method you may allocate
contributions to any of the available investment options listed in A and B
in the chart on the next page. You can make transfers whenever you choose.
However, there will be restrictions on the amount you can transfer out of
the guaranteed interest option listed in A.
o MAXIMUM TRANSFER FLEXIBILITY. Under this method you may allocate
contributions to any of the investment options listed in A in the chart on
the next page and no transfer restrictions will apply.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFIT 41
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
A
- --------------------------------------------------------------------------------
o Guaranteed Interest Option
- --------------------------------------------------------------------------------
DOMESTIC EQUITY INTERNATIONAL EQUITY
- --------------------------------------------------------------------------------
o Alliance Common Stock o Alliance Global
o Alliance Equity Index o Alliance International
o Alliance Growth & Income o Morgan Stanley Emerging
Markets Equity
o MFS Research
o T. Rowe Price International
o Merrill Lynch Basic Value Stock
Equity
o EQ/Putnam Growth & Income
Value
o T. Rowe Price Equity Income
- --------------------------------------------------------------------------------
ASSET ALLOCATION AGGRESSIVE EQUITY
- --------------------------------------------------------------------------------
o Alliance Balanced o Alliance Aggressive Stock
o Alliance Growth Investors o Alliance Small Cap Growth
o Merrill Lynch World Strategy o MFS Emerging Growth
Companies
o EQ/Putnam Balanced
o Warburg Pincus Small
Company Value
- --------------------------------------------------------------------------------
B
- --------------------------------------------------------------------------------
AGGRESSIVE FIXED INCOME
- --------------------------------------------------------------------------------
o Alliance High Yield
- --------------------------------------------------------------------------------
DOMESTIC FIXED INCOME ASSET ALLOCATION
- --------------------------------------------------------------------------------
o Alliance Intermediate o Alliance Conservative
Government Securities Investors
o Alliance Money Market
o Alliance Quality Bond
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
- --------------------------------------------------------------------------------
The fixed maturity options are only available under series 400 and
500 contracts.
Transfer restrictions apply as indicated above under "Fixed maturity
options and maturity dates."
- --------------------------------------------------------------------------------
ALLOCATING YOUR CONTRIBUTIONS
Once you have made your investment method choice, you may allocate your
contributions among only the investment options that you have chosen.
Allocations must be in whole percentages and you may change your allocation
percentages at any time. However, the total of your allocations must equal
100%. After your contract is issued, you may request that we add or eliminate
any variable investment options that result in transfer restrictions. We
reserve the right to deny your request. See "Transferring your money among
investment options."
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our Processing Office within 10 days after you receive
it. In some states, this "free look" period may be longer.
For contributions allocated to the variable investment options, your refund
will equal your contributions, reflecting any investment gain or loss which
also reflects the daily charges we deduct. For contributions allocated to the
guaranteed interest option, your refund will equal the amount of the
contributions but will not include interest. For contributions allocated to
the fixed maturity options, your refund will equal the amount of the
contribution allocated to the fixed maturity options reflecting any positive
or negative market value adjustments. However, some states require that we
refund the full amount of your contribution (not including any investment gain
or loss, interest, or market value adjustment). For IRA contracts returned to
us within seven days after you receive it, we are required to refund the full
amount of your contribution.
We may require that you wait six months before you apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
If you fully or partially convert an existing Traditional IRA contract to a
Standard Roth IRA or Roth Advantage contract, you may cancel your Standard
Roth IRA or Roth Advantage contract and return to a Traditional IRA contract.
Our Processing Office, or your Equitable associate, can provide you with the
cancellation instructions. Ask for the form entitled "EQUI-VEST Roth IRA
Re-Characterization Form."
<PAGE>
- --------------------------------------------------------------------------------
42 DETERMINING YOUR CONTRACT'S VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
Determining your contract's value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE
Your "account value" is the total of the values you have allocated to the (i)
variable investment options, (ii) guaranteed interest option, and (iii) fixed
maturity options. These amounts are subject to certain fees and charges
discussed under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less any
withdrawal charge that may apply, and less the total amount or a pro rata
portion of the annual administrative change. Please see "Surrendering your
contract to receive its cash value" below.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding
Portfolio. Your value in each variable investment option is measured by
"units." The value of your units will increase or decrease as though you had
invested it in the corresponding Portfolio's shares directly. Your value,
however, will be reduced by the amount of the fees and charges that we deduct
under the contract. Your value will also be reduced by the dollar amount of
any withdrawals that you make.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option minus daily charges for mortality and expense risks
and other expenses. On any day, your value in any variable investment option
equals the number of units credited to your contract under that option,
multiplied by that day's value for one unit. The number of your contract units
in any variable investment option does not change unless you make additional
contributions, make a withdrawal, or transfer amounts among investment
options. In addition, when we deduct the withdrawal charge, the annual
administrative charge, or third party transfer or exchange charge, the number
of units credited to your contract will be reduced. A description of how unit
values are calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED INTEREST OPTION
Your value in the guaranteed interest option at any time will equal: your
contributions and transfers to that option, plus interest, minus withdrawals
and transfers out of the option, and charges we deduct.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
<PAGE>
- --------------------------------------------------------------------------------
TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 43
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3
Transferring your money among investment options
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You must transfer at least $300 of account value or, if less, the entire
amount in the investment option. We may waive the $300 requirement.
o You may not transfer to a fixed maturity option in which you already have
value.
o You may not transfer to a fixed maturity option if its maturity date is
later than the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
o If you choose the maximum investment options choice method for selecting
investment options, the maximum amount you may transfer in any contract
year from the guaranteed interest option to any other investment option is
(a) 25% of the amount you had in the guaranteed interest option on the
last day of the prior contract year or, if greater, (b) the total of all
amounts you transferred from the guaranteed interest option to any other
investment option in the prior contract year.
If you transfer money from another financial institution into the guaranteed
interest option during your first contract year, and if you have selected
maximum investment options choice, you may, during the balance of that
contract year, transfer up to 25% of such initial guaranteed interest option
balance to any other investment option.
See Appendix I for transfer restrictions under original contracts.
Subject to the terms of your contract, upon advance notice, we may change or
establish additional restrictions on transfers among the investment options. A
transfer request does not change your percentages for allocating current or
future contributions among the investment options.
You may request a transfer in writing or by telephone using TOPS. You must
send in all signed written requests directly to our Processing Office.
Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts to be transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
AUTOMATIC TRANSFER OPTIONS INVESTMENT SIMPLIFIER
You may choose from two automatic options for transferring amounts from the
guaranteed interest option to the variable investment options. The transfer
options are the "fixed-dollar option" and the "interest sweep." You may select
one or the other, but not both.
FIXED-DOLLAR OPTION. Under this option you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the variable
investment options of your choice on a monthly basis. You can specify the
number of monthly transfers or instruct us to continue to make monthly
transfers until all available amounts in the guaranteed interest option have
been transferred out.
See Appendix I for transfer restrictions under
original contracts.
In order to elect the fixed-dollar option you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at
our Processing Office. You also must elect to transfer at least $50 per month.
The fixed-dollar option is subject to the guaranteed interest option transfer
limitation described above.
The fixed-dollar option is a form of dollar-cost averaging. Dollar-cost
averaging allows you to gradually allocate amounts to the variable investment
options by periodically transferring approximately the same dollar amount to
the variable investment options you select. This will cause you to purchase
more units if the unit's value is low and fewer units
<PAGE>
- --------------------------------------------------------------------------------
44 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
if the unit's value is high. Therefore, you may get a lower average cost per
unit over the long term. This plan of investing, however, does not guarantee
that you will earn a profit or be protected against losses.
INTEREST SWEEP. Under the interest sweep, we will make transfers on a monthly
basis from amounts in the guaranteed interest option. The amount we will
transfer will be the interest credited to amounts you have in the guaranteed
interest option from the last business day of the prior month to the last
business day of the current month. You must have at least $7,500 in the
guaranteed interest option on the date we receive your election and on the
last business day of each month thereafter to participate in the interest
sweep option.
WHEN YOUR PARTICIPATION IN AN AUTOMATIC TRANSFER
OPTION WILL END. Your participation in an automatic
transfer option will end:
o Under the fixed-dollar option, when either the number of designated monthly
transfers have been completed or the amount you have available in the
guaranteed interest option has been transferred out.
o Under the interest sweep, when the amount you have in the guaranteed
interest option falls below $7,500 (determined on the last business day of
the month) for two months in a row.
o Under either option, on the date we receive at our Processing Office, your
written request to cancel automatic transfers, or on the date your
contract terminates.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually).
While your rebalancing program is in effect, we will transfer amounts among
each variable investment option so that the percentage of your account value
that you specify is invested in each option at the end of each rebalancing
date. You may not rebalance only a portion of your account value in the
variable investment options.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your Equitable associate and/or
financial adviser before electing the program.
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You may elect the rebalancing program at any time. To be eligible, you must
have at least $5,000 of account value in the variable investment options.
Rebalancing is not available for amounts you have allocated in the guaranteed
interest option or in the fixed maturity options.
You may change your allocation instructions or cancel the program at any time.
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ACCESSING YOUR MONEY 45
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4
Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of
contract. More information follows the table. For the tax consequences of
taking withdrawals, see "Tax information."
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METHOD OF WITHDRAWAL
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MINIMUM
CONTRACT LUMP SUM SYSTEMATIC DISTRIBUTION
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NQ Yes Yes No
Traditional IRA Yes Yes Yes
QP IRA Yes Yes Yes
Standard Roth IRA Yes Yes No
Roth Advantage Yes Yes No
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LUMP SUM WITHDRAWALS
You may take lump sum withdrawals from your account value at any time while
the annuitant is living and before annuity payments begin. The minimum amount
you may withdraw at any time is $300. If your account value is less than $500
after a withdrawal, we may terminate your contract and pay you its cash value.
Lump sum withdrawals in excess of the 10% free withdrawal amount may be
subject to a withdrawal charge.
SYSTEMATIC WITHDRAWALS
If you have at least $20,000 of account value in the variable investment
options and the guaranteed interest option you may elect systematic
withdrawals. You may elect to have your systematic withdrawals made on a
monthly or quarterly basis. The minimum amount you may take for each
withdrawal is $300. We will make the withdrawal on any day of the month that
you select as long as it is not later than the 28th day of the month. If you
do not select a date, your withdrawals will be made on the first day of the
month. A check for the amount of the withdrawal will be mailed to you or, if
you prefer, we will electronically transfer the money to your checking
account.
You may withdraw either the amount of interest earned in the guaranteed
interest option or a fixed-dollar amount from either the variable investment
options or the guaranteed interest option. If you elect the interest option, a
minimum of $20,000 must be maintained in the guaranteed interest option. If
you elect the fixed-dollar option you do not have to maintain a minimum
amount. You may elect to have the amount of the withdrawal subtracted from
your account value in one of three ways:
(1) pro rata from more than one variable investment option (without using up
your total value in those options); or
(2) pro rata from more than one variable investment option (until your value
in those options is used up); or
(3) you may specify a dollar amount from only one variable investment option.
You can cancel the systematic withdrawal option at any time.
Amounts withdrawn in excess of the 10% free withdrawal amount may be subject
to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Traditional IRA contracts - See "Tax information")
We offer the minimum distribution withdrawal option to help you meet required
minimum distributions under federal income tax rules. You may elect this
option in the year in which you reach age 70 1/2 and have account value in
the variable investment options and the guaranteed interest option of at least
$2,000. The minimum amount we will pay out is $300, or if less, your account
value. If your account value is less than $500 after the withdrawal, we may
terminate your contract and pay you its cash value. You elect the method you
want us to use to calculate your minimum distribution withdrawal from the
choices we offer. Currently, minimum distribution withdrawal payments will be
made annually.
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your values in the variable investment options and the guaranteed
interest option. If those amounts are insufficient, we will make up
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46 ACCESSING YOUR MONEY
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required amounts from the fixed maturity options to the extent you have value
in those options. A market value adjustment may apply. We will calculate your
payment each year based on your account value at the end of each calendar
year, based on the method you choose.
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For Traditional IRA retirement benefits subject to minimum distribution
requirements, we will send a form outlining the distribution options available
before you reach age 70 1/2 (if you have not begun your annuity payments before
that time).
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AUTOMATIC NQ DEPOSIT SERVICE
If you are receiving required minimum distribution payments from a Traditional
IRA or QP IRA contract you may use our automatic NQ deposit service.
Under this service we will automatically deposit the required minimum
distribution payment from your Traditional IRA or QP IRA contract directly
into an existing EQUI-VEST NQ contract according to your allocation
instructions.
DEPOSIT OPTION FOR NQ CONTRACTS ONLY
You can elect the deposit option for your benefit while you live, or for the
benefit of your beneficiary.
Proceeds from your NQ contract can be deposited with us for a period you
select (including one for as long as the annuitant lives). We will hold the
amounts in our general account. We will credit interest on the amounts at a
guaranteed rate for the specified period. We will pay out the interest on the
amount deposited at least once each year.
If you elect this option for your benefit, you deposit the amount with us that
you would otherwise apply to an annuity payout option. If you elect this
option for your beneficiary before the annuitant's death, death benefit
proceeds can be left on deposit with us subject to certain restrictions,
instead of being paid out to the beneficiary.
Other restrictions apply to the deposit option. Your Equitable associate can
provide more information about this option, or you may call our Processing
Office.
SURRENDER OF YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while
the annuitant is living and before you begin to receive annuity payments. For
a surrender to be effective, we must receive your written request and your
contract at our Processing Office. We will determine your cash value on the
date we receive the required information. All benefits under the contract will
terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Choosing your annuity payout options"
below. We will usually pay the cash value within seven calendar days, but we
may delay payment as described in "When to expect payments," below. For the
tax consequences of surrenders, see "Tax information."
WHEN WE MAY TERMINATE YOUR CONTRACT
We may terminate your contract and pay you the cash value if:
(1) your account value is less than $500 and you have not made contributions
to your contract for a period of three years; or
(2) you request a lump sum withdrawal that reduces your account value to an
amount less than $500; or
(3) you have not made any contributions within 120 days from your contract
date.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable
investment options within seven calendar days after the date of the
transaction to which the request relates. These transactions may include
applying proceeds to a variable annuity payout option, payment of a death
benefit, payment of any amount you withdraw (less any withdrawal charge) and,
upon surrender or termination, payment of the cash value. We may postpone such
payments or applying proceeds for any period during which:
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ACCESSING YOUR MONEY 47
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(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your values in the guaranteed interest
option and the fixed maturity options (other than for death benefits) for up
to six months while you are living. We also may defer payments for a
reasonable amount of time (not to exceed 15 days) while we are waiting for a
contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
CHOOSING YOUR ANNUITY PAYOUT OPTIONS
The EQUI-VEST contract offers you several choices for receiving retirement
income. Each choice enables you to receive fixed or, in some cases, variable
annuity payments.
You can choose from among the different forms of annuity payout options listed
below. Restrictions apply, depending on the type of contract you own.
ANNUITY PAYOUT OPTIONS
You can choose from among the following annuity payout options:
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity - period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. Under IRAs, the period
certain cannot exceed your life expectancy or the joint life expectancy of
you and your spouse.
o Life annuity - refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This option does not
guarantee payments for the rest of the annuitant's life. It does not
permit any repayment of the unpaid principal, so you cannot elect to
receive part of the payments as a single sum payment with the rest paid in
monthly annuity payments. Currently, this payout option is available only
as a fixed annuity.
All of the above payout options are available as fixed annuities. With fixed
annuities, we guarantee fixed annuity payments that will be based either on
the tables of guaranteed annuity payments in your contract or on our then
current annuity rates, whichever is more favorable for you.
The life annuity, life annuity - period certain, and life annuity - refund
certain payout options are available on a single life or joint and survivor
life basis. The joint and survivor life annuity guarantees payments for the
rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. Generally, under IRA contracts, unless you elect
otherwise with the written consent of your spouse, this will be the normal
form of annuity payment if you are married.
The following annuity payout options are available as variable annuities:
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48 ACCESSING YOUR MONEY
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o Life annuity (except in New York).
o Life annuity - period certain.
o Joint and survivor life annuity (100% to survivor).
o Joint and survivor life period certain annuity (100% to survivor).
Variable annuities may be funded through your choice of variable investment
options investing in Portfolios of The Hudson River Trust. The contract also
offers a fixed income annuity option which can be elected in combination with
the variable income annuity options. The amount of each variable annuity
payment will fluctuate, depending upon the performance of the variable
investment options, and whether the actual rate of investment return is higher
or lower than an assumed base rate. Please see "Annuity unit values" in the
SAI.
We also make the variable annuity payout options available to owners of our
single premium deferred annuity ("SPDA") contract and certain other
combination fixed and variable annuity contracts. Such contractholders who are
considering purchasing a variable payout option should also review the
information in this prospectus relating to the variable investment options.
The Hudson River Trust prospectus (directly following this prospectus), and
the sections of the SAI which discuss the variable annuity payout option
should also be reviewed.
We may offer other payout options not outlined here. Your Equitable associate
can provide details.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written
agreement confirming your right to receive annuity payments. Unless you choose
a different payout option, we will pay annuity payments under a life annuity
with a period certain of 10 years or, for IRA contracts, a joint and survivor
life annuity if you are married. We require you to return your contract before
annuity payments begin.
You can choose the date annuity payments are to begin. You can change the date
your annuity payments are to begin anytime before that date as long as you do
not choose a date later than the 28th day of any month. Also, that date may
not be later than the contract date anniversary that follows the annuitant's
85th birthday. This may be different in some states.
Before your annuity payments are to begin, we will notify you by letter that
the annuity payout options are available. Once you have selected a payout
option and payments have begun, no change can be made, other than transfers
(if permitted in the future) among the variable investment options if a
variable annuity is selected.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity, the type of annuity chosen and whether it is fixed or
variable, and, in the case of a life annuity, the annuitant's age (or the
annuitant's and joint annuitant's ages) and in certain instances, the sex of
the annuitant(s). In no event will you ever receive less than the minimum
amounts guaranteed by the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
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CHARGES AND EXPENSES 49
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5
Charges and expenses
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges
are reflected in the unit value of each variable investment option:
o A mortality and expense risks charge.
o An expense charge.
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o An annual administrative charge.
o Third party transfer or exchange fee (series 300, 400 and 500 only).
o At the time you make certain withdrawals or surrender your contract, or
your contract is terminated - a withdrawal charge.
o At the time annuity payments are to begin - charges for state premium and
other applicable taxes. An annuity administrative fee may also apply.
More information about these charges appears below.
The charges differ depending on which contract series you purchase.
CHARGES UNDER SERIES 300, 400 AND 500 CONTRACTS
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for mortality and expense risks, including the death
benefit. The daily charge is equivalent to an annual rate of:
o 1.10% of net assets in each variable investment option under series 300 and
400 contracts.
o 1.20% of the net assets in each variable investment option for series 500
contracts.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity benefits than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. We may
change the actuarial basis for our guaranteed annuity payment tables, but only
for new contributions and only at five year intervals from the contract date.
Lastly, we assume a mortality risk to the extent that at the time of death,
the guaranteed death benefit exceeds the cash value of the contract. In
addition, we waive any withdrawal charge upon payment of a death benefit.
The expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
To the extent that the mortality and expense risk charges are not needed to
cover the actual expenses incurred, they may be considered an indirect
reimbursement for certain sales and promotional expenses relating to the
contracts.
CHARGE FOR OTHER EXPENSES
We deduct this daily charge from the net assets in each variable investment
option. This charge, together with the annual administrative charge described
below, is for providing administrative and financial accounting services under
the contracts. The daily charge is equivalent to a maximum annual rate of
0.25% of net assets in each variable investment option. Currently, the charge
we deduct for variable investment options other than the Alliance Money
Market, Alliance Common Stock and Alliance Balanced options, is 0.24% of net
assets. We may, upon advance notice to you, increase the charge to 0.25% of
net assets for all variable investment options.
SERIES 500 - MAXIMUM TOTAL CHARGES. Under series 500 contracts, the total
annual rate for the above charges is 1.45%. We may increase or decrease this
total annual rate, but we may not increase it above a maximum rate of 2.00%.
We will only make any increase after we have sent you advance notice. Any
increase or decrease will apply only
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50 CHARGES AND EXPENSES
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to contributions you may make after the date of the
change. Any changes we make will reflect differences in costs and anticipated
expenses, and will not be unfairly discriminatory.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on the last
business day of each contract year. We will deduct a pro rata portion of the
charge if you surrender your contract, elect an annuity payout option, or the
annuitant dies during the contract year. During the first two contract years,
the charge is equal to $30 or, if less, 2% of your current account value. The
charge is $30 for contract years three and later for series 300, 400 and 500
contracts.
The charge is deducted pro rata from the variable investment options and the
guaranteed interest option. If those amounts are insufficient, we will make up
the required amounts from the fixed maturity options to the extent you have
value in those options unless you tell us othewise.
We may increase this charge if our administrative costs rise, but the charge
will never exceed $65 annually for series 400 and 500 contracts. We also may
waive the administrative charge for IRA and NQ contracts having an account
value of a specified amount on the last business day of each contract year -
currently $25,000 for NQ contracts and $20,000 for IRA contracts. We reserve
the right to deduct this charge on a quarterly, rather than annual basis.
CHARGE FOR THIRD PARTY TRANSFER OR EXCHANGE
We impose a charge for making a direct transfer of amounts from your contract
to a third party, or if you request that your contract be exchanged for a
contract issued by another insurance company. In either case, we will deduct
from your account value any withdrawal charge that applies and (except for
series 300 contracts in Florida) a charge of $25 for each direct transfer or
exchange. We reserve the right to increase this charge to a maximum of $65.
WITHDRAWAL CHARGE
A withdrawal charge may apply in three circumstances: (1) you make one or more
withdrawals during a contract year; (2) you surrender your contract to receive
its cash value; or (3) we terminate your contract. The amount of the charge
will depend on whether the free withdrawal amount applies, and the
availability of one or more exceptions.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of the withdrawal charge
from your account value. Any amount deducted to pay a withdrawal charge is
also subject to a withdrawal charge. We deduct the withdrawal amount and the
withdrawal charge pro rata from the variable investment options and the
guaranteed interest option. If those amounts are insufficient, we will make up
the required amounts from the fixed maturity options to the extent you have
value in those options.
The amount of the withdrawal charge we deduct is equal to 6% of contributions
withdrawn that were made in the current and five prior contract years. In the
case of surrenders, we will pay you the greater of (i) the account value after
any withdrawal charge has been imposed (cash value), or (ii) the free
withdrawal amount plus 94% of the remaining account value.
For purposes of calculating the withdrawal charge, amounts withdrawn up to the
free withdrawal amount are not considered a withdrawal of any contribution. We
also treat contributions that have been invested the longest as being
withdrawn first. We treat contributions as withdrawn
before earnings for purposes of calculating the withdrawal charge. However,
the federal income tax rules treat earnings under most NQ contracts as
withdrawn first. See "Tax information."
For series 300 and 400 contracts, we reserve the right to change the amount of
the withdrawal charge, but it will not exceed 6% of the contributions
withdrawn.
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CHARGES AND EXPENSES 51
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For series 500 contracts, we reserve the right to change the amount of the
withdrawal charge, but it will not exceed 8% of the contributions withdrawn.
Any change would not be unfairly discriminatory. We may also reduce the
withdrawal charge in order to comply with any state law requirement. See
"Contracts issued in New York - fixed maturity options" below.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value at the time you request a
withdrawal, minus any other withdrawals made during the contract year.
DEATH OR PURCHASE OF ANNUITY. The withdrawal charge does not apply:
o If the annuitant dies and a death benefit is payable to the beneficiary.
o If we receive a properly completed election form providing for the account
value to be used to buy a life contingent annuity or a non-life annuity
with a period certain for a term of at least ten years.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO
NURSING HOME. The withdrawal charge also does not
apply:
o If the annuitant has qualified to receive social security disability
benefits as certified by the Social Security Administration; or
o If we receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six months or
less; or
o If the annuitant has been confined to a nursing home for more than 90 days
(or such other period, as required in your state) as verified by a
licensed physician. A nursing home for this purpose means one that 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.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a
preexisting condition or a condition that began within 12 months of the
contract date. Some states may not permit us to waive the withdrawal charge in
the above circumstances, or may limit the circumstances for which the
withdrawal charge may be waived. Your Equitable associate can provide more
information or you may contact our Processing Office.
For Traditional IRA, QP IRA, and Standard Roth IRA contracts the withdrawal
charge also does not apply:
o after six contract years and the annuitant is at least age 59 1/2; or
o if you request a refund of a contribution in excess of amounts allowed to
be contributed under the federal income tax rules within one month of the
date on which you made the contribution.
For Roth Advantage contracts the withdrawal charge also
does not apply:
o after five contract years and the annuitant is at least age 59 1/2; or
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52 CHARGES AND EXPENSES
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o if you withdraw an amount which is less than or equal to 25% of the account
value at the time the withdrawal is requested, minus any amount previously
withdrawn during that contract year, and you use the withdrawal to pay
specified higher education expenses as defined in the federal income tax
rules. We must receive evidence satisfactory to us that such withdrawal is
in fact for such purpose; or
o after five contract years and the withdrawal is a "qualified first-time
homebuyer distribution" (special federal income tax definition; $10,000
lifetime total limit). We must receive evidence satisfactory to us that
such withdrawal is in fact for such purpose; or
o if you request a refund of a contribution in excess of amounts allowed to
be contributed under federal income tax rules within one month of the date
on which you made the contribution.
SERIES 400 AND 500 CONTRACTS ISSUED IN NEW YORK -
FIXED MATURITY OPTIONS
For contracts issued in New York, the withdrawal charge that applies to
withdrawals taken from amounts in the fixed maturity options will never exceed
6%.
The withdrawal charge will be the greater of the charge determined by applying
the New York Declining Scale ("declining scale") and the New York Alternative
Scale ("alternative scale") method of accessing withdrawal charges, not to
exceed 6%. If you withdraw amounts that have been transferred from one fixed
maturity option to another, we use the alternative scale if it produces a
higher charge than the declining scale.
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DECLINING SCALE ALTERNATIVE SCALE
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Year of in vestment in Year of transfer within
fixed maturity option* fixed maturity option*
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Within year 1 6% Within year 1 5%
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2 6% 2 4%
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3 5% 3 3%
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4 4% 4 2%
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5 3% 5 1%
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6 2% After year 5 0%
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After year 6 0% Not to exceed 1%
times the number of
years remaining in the
fixed maturity option,
rounded to the higher
number of years. In
other words, if 4.3
years remain, it would
be a 5% charge.
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* Measured from the contract date anniversary prior to the date of the
contribution or transfer.
In the following example we compare the withdrawal charge that would apply to
a withdrawal from a series 400 NQ, Traditional IRA or QP IRA contract that has
an account value of $10,000; $8,000 from a contribution made three years ago
and $2,000 from positive investment performance.
o If you were to withdraw the total amount of the contribution within the
first six years after it was made the series 400 withdrawal charge that
generally applies would be $480 (6% of $8,000). However, if when you made
your contribution you allocated it to a fixed maturity option, the
withdrawal charge would be lower. According to the declining scale method
described above, the withdrawal charge would be limited to 5% of the
$8,000, or $400 in the third year.
o The withdrawal charge may be different if when you made your contribution
three years ago, you allocated it to a fixed maturity option and then in
the third year, you transfer the amounts that apply to such contribution
to a new fixed maturity option. In this example we assume that there is
one year remaining in the new fixed maturity option. Because you made a
transfer among the fixed maturity options, the alternative scale may now
apply. Based on this alternative scale, a contribution that is
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CHARGES AND EXPENSES 53
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transferred will be subject to a 5% withdrawal charge if you withdraw that
contribution in the same year that you make the transfer. However, the
withdrawal charge may not exceed 1% for each year remaining in the new
fixed maturity option. Since, in this example, the time remaining in the
new fixed maturity option is one year, the withdrawal charge under the
alternative scale would be limited to 1%. Because New York regulations
permit us to use the greater of the declining scale or the alternative
scale, the withdrawal charge would be 5%, or $400, based on the declining
scale.
o The withdrawal charge may not exceed the charge that would normally apply
under the contract. Use of a New York scale can only result in a lower
charge. If your contribution has been in the contract for more than six
years and therefore would not have a withdrawal charge associated with it,
no withdrawal charge would apply.
o If you take a withdrawal from an investment option other than the fixed
maturity options, the amount available for withdrawal without a withdrawal
charge is reduced. It will be reduced by the amount of the contribution in
the fixed maturity options to which no withdrawal charge applies.
o As of any date on which 50% or more of your account value is held in fixed
maturity options, the free withdrawal amount is zero.
For contracts issued in New York, you should consider that on the maturity
date of a fixed maturity option if we have not received your instructions for
allocation of your maturity value, we will transfer your maturity value to the
fixed maturity option scheduled to mature next. If we are not offering other
fixed maturity options, we will transfer your maturity value to the Alliance
Money Market option.
The potential for lower withdrawal charges for withdrawals from the fixed
maturity options and the potential for a lower free withdrawal amount than
those that would normally apply, should be taken into account when deciding
whether to allocate amounts to, or transfer amounts to or from, the fixed
maturity options.
We will deduct the annual administrative charge and the withdrawal charge from
the variable investment options and the guaranteed interest option as
discussed above. If the amounts in those options are insufficient to cover the
charges, we reserve the right to deduct the charges from the fixed maturity
options. Charges deducted from the fixed maturity options are considered
withdrawals and, as such, will result in a market value adjustment.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as premium taxes that may be
imposed in your state. Generally, we deduct the charge from the amount applied
to provide an annuity payout. The current tax charge that might be imposed
varies by state and ranges from 0% to 3.5% (1% in Puerto Rico and 5% in the
U.S. Virgin Islands).
We reserve the right to deduct any applicable charges for taxes such as
premium taxes from each contribution, or from withdrawals, or for surrender
and termination of your contract. If we have deducted any applicable charges
from contributions, we will not deduct a charge for the same taxes later. If,
however, an additional tax charge is later imposed upon us when you make a
withdrawal, or surrender your contract, or it is terminated, or you elect to
begin receiving annuity payments, we reserve the right to deduct a charge at
that time.
ANNUITY ADMINISTRATIVE FEE
We generally deduct a fee of up to $350 from the amount to be applied to
purchase a life annuity payout option.
CHARGES UNDER SERIES 100 AND 200 CONTRACTS
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for mortality and expense risks, including the minimum
death benefit. The daily charge is a percentage of the net assets in each of
the variable investment options. Under series 100 contracts the
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54 CHARGES AND EXPENSES
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percentage is equivalent to an annual rate that will not exceed 0.65%, and
1.15% under series 200 contracts for the Alliance Money Market, Alliance
Balanced and Alliance Common Stock options. The daily charge for all other
variable investment options is equivalent to an annual rate not to exceed
0.50% under series 100 contracts and 1.09% under series 200 contracts.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity benefits than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed death benefit exceeds the cash value of the contract. In addition,
we waive any withdrawal charge upon payment of a death benefit.
The expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
To the extent that the mortality and expense risk charges are not needed to
cover the actual expenses incurred, they may be considered to be an indirect
reimbursement for certain sales and promotional expenses relating to the
contracts.
CHARGE FOR OTHER EXPENSES
We deduct this daily charge from the net assets in each variable investment
option. This charge, together with the annual administrative charge described
below, is for providing administrative and financial accounting services under
the contracts. The daily charge is equivalent to a maximum annual rate of
0.84% of net assets in each variable investment option under series 100
contracts. 0.60% of this charge is designed to reimburse us for research and
development costs and for administrative expenses that are not covered by the
annual administrative charge described below. The remaining 0.24% is to
reimburse us for the cost of financial accounting services we provide under
the contracts. Under series 200 contracts, the charge for expenses and
financial accounting is 0.25% of the net asset value in each variable
investment option.
LIMITATION ON CHARGES. For the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options, the combined
amount of the variable investment option charges and The Hudson River Trust
charges for investment advisory fees and direct operating expenses may not
exceed a total annual rate of 1.75% of the value of the assets held in those
variable investment options.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on the last
business day of each contract year. We will deduct a pro rata portion of the
charge if you surrender your contract, elect an annuity payout option, or the
annuitant dies during the contract year. The charge is equal to $30 or, if
less, 2% of the current account value.
The charge is deducted pro rata from each investment option in which you have
account value.
TRADITIONAL IRA, QP IRA, AND ROTH IRA. At the end of any contract year that
your account value is at least $10,000, we will waive the annual
administrative charge.
WITHDRAWAL CHARGE
FOR NQ CONTRACTS. A withdrawal charge may apply in three circumstances: (1) if
you make one or more withdrawals during a contract year; (2) you surrender
your contract to receive its cash value; or (3) we terminate your contract.
The amount of the charge will depend on whether the free withdrawal amount
applies, and the availability of one or more exceptions.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of the withdrawal charge
from your account value. Any amount deducted to pay a withdrawal charge is
also subject to a withdrawal charge.
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CHARGES AND EXPENSES 55
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The amount of the withdrawal and the applicable withdrawal charge are deducted
pro rata from your account value.
The amount of the withdrawal charge we deduct is equal to 6% of contributions
withdrawn that were made in the current and five prior contract years. In the
case of surrenders or terminations, we will pay you the greater of (i) the
account value after any withdrawal charge has been imposed (cash value), or
(ii) the free withdrawal amount plus 94% of the remaining account value. If
the annuitant is age 59 or older when the contract is issued, this percentage
will be 95% in the fifth contract year and 96% in the sixth contract year.
There is a reduction in the withdrawal charge for older annuitants in the
fifth and sixth contract year.
For purposes of calculating the withdrawal charge, amounts withdrawn up to the
free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested the longest as being
withdrawn first. We treat contributions as withdrawn before earnings for
purposes of calculating the withdrawal charge. However, the federal income tax
rules treat earnings
under most NQ contracts as withdrawn first. See "Tax information."
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value at the time you request a
withdrawal, minus any other withdrawals made during the contract year.
For NQ contracts the withdrawal charge does not apply if:
o the annuitant dies and a death benefit is payable to the beneficiary; or
o we receive a properly completed election form providing for the account
value to be used to buy a life annuity payout option.
TRADITIONAL IRA, QP IRA, AND STANDARD ROTH IRA.
The withdrawal charge equals a percentage of the amount withdrawn. The
percentage that applies depends on the contract year in which the withdrawal
is made, according to the following table:
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CONTRACT
YEAR(S) CHARGE
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1 through 5 6%*
6 through 8 5
9 4
10 3
11 2
12 1
13 and later 0
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* This percentage may be reduced at older ages for certain contract series.
Your Equitable associate can provide further details about the contract
series you own.
The total of all withdrawal charges assessed will not exceed 8% of all
contributions made during the current contract year and the nine contract
years before the withdrawal is made.
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We reserve the right to reduce or waive the withdrawal charge including
transfers to a Traditional IRA, QP IRA, and, Standard Roth IRA from another
EQUI-VEST contract. Any such charge will not be unfairly discriminatory. The
withdrawal charge may be reduced in order to comply with any state law
requirement.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT FOR A TRADITIONAL IRA, QP IRA, STANDARD ROTH
IRA. Each contract year you can withdraw up to 10% of your account value
without paying a withdrawal charge. The 10% free withdrawal amount is
determined using your account value at the time you request a withdrawal,
minus any other withdrawals made during the contract year.
For existing contract owners, if you have QP IRA contract number 11933I, the
free withdrawal amount became available after the third contract year. If you
have QP IRA
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56 CHARGES AND EXPENSES
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contract number 92QPI, the free withdrawal amount was available in the first
contract year.
No withdrawal charge applies:
o after five contract years and the annuitant is at least age 59 1/2; or
o if you request a refund of an excess contribution within one month of the
date on which the contribution is made; or
o the annuitant dies and the death benefit is made available to the
beneficiary; or
o after five contract years and the annuitant is at least age 55 and the
amount withdrawn is used to purchase from us a period certain annuity that
extends beyond the annuitant's age 59 1/2 and allows no prepayment; or
o after three contract years and the amount withdrawn is used to purchase
from us a period certain annuity for a term of at least 10 years and
allows no prepayment; or
o if the amount withdrawn is applied to the election of a life contingent
annuity payout option.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE
TAXES
We deduct a charge for applicable taxes such as premium taxes that may be
imposed in your state. Generally, we deduct the charge from the amount applied
to provide an annuity payout. The current tax charge that might be imposed
varies by state and ranges from 0% to 3.5% (1% in Puerto Rico and 5% in the
U.S. Virgin Islands).
We reserve the right to deduct any applicable charges for taxes such as
premium taxes from each contribution, or from withdrawals, or for surrender
and termination of your contract. If we have deducted any applicable charges
from contributions, we will not deduct a charge for the same taxes later. If,
however, an additional tax charge is later imposed upon us when you make a
withdrawal, or surrender your contract, or it is terminated, or you elect to
begin receiving annuity payments, we reserve the right to deduct a charge at
that time.
ANNUITY ADMINISTRATIVE FEE
We generally deduct a fee of up to $350 from the amount to be applied to
purchase a life annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Hudson River Trust and EQ Advisors Trust each deducts charges for the
following types of fees and expenses:
o Investment advisory fees ranging from 0.31% to 1.15%.
o 12b-1 fees of 0.25% applicable to Class 1B shares of EQ Advisors Trust.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each Portfolio. Since
shares of each trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for The Hudson River Trust and EQ Advisors
Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge, or change the minimum
initial contribution requirements. We also may change the minimum death
benefit or offer variable investment options that invest in shares of EQ
Advisors Trust that are not subject to the 12b-1 fee. Group arrangements
include those in which a trustee or an employer, for example, purchases
contracts covering a group of individuals on a group basis. Group arrangements
are not available for Traditional IRA, Standard Roth IRA, and Roth Advantage
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
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CHARGES AND EXPENSES 57
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Our costs for sales, administration, and mortality generally vary with the
size and stability of the group or sponsoring organization, among other
factors. We take all these factors into account when reducing charges. To
qualify for reduced charges, a group or sponsored arrangement must meet
certain requirements, such as requirements for size and number of years in
existence. Group or sponsored arrangements that have been set up solely to buy
contracts or that have been in existence less than six months will not qualify
for reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation in the withdrawal charge will reflect differences in costs
or services and will not be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
the Employee Retirement Income Security Act of 1974, or both. We make no
representations with regard to the impact of these and other applicable laws
on such programs. We recommend that employers, trustees, and others purchasing
or making contracts available for purchase under such programs seek the advice
of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that
results in savings of sales and administrative expenses, such as sales through
persons who are compensated by clients for recommending investments and who
receive no commission or reduced commissions in connection with the sale of
the contracts. We will not permit a reduction or elimination of charges where
it will be unfairly discriminatory.
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58 PAYMENT OF DEATH BENEFIT
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6
Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may
change your beneficiary at any time by writing to our Processing Office.
The death benefit is equal to your account value, or, if greater, the "minimum
death benefit." The minimum death benefit is equal to your total
contributions, less withdrawals (less any taxes that apply). We determine the
amount of the death benefit as of the date we receive satisfactory proof of
the annuitant's death and any required instructions for the method of payment.
On the date we determine the death benefit, your account value will be
deducted from the investment options. We will hold this amount in our general
account and credit it with interest at a rate not less than the rate required
by law. If you have transferred the value of another annuity contract that we
issue to your EQUI-VEST contract, the value of the other contract's minimum
death benefit calculated as of the time of the transfer will be included in
the total contributions for the purpose of calculating the minimum death
benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary who is the surviving spouse of the owner/annuitant can choose to
be treated as the successor owner/annuitant and continue the contract. Only a
spouse can be a successor owner/annuitant. If you do not want the person named
to receive the death benefit upon the annuitant's death to be the successor
owner, you should name a successor owner.
For Traditional IRA and QP IRA contracts, a beneficiary who is not a surviving
spouse may be able to have limited ownership.
Only a spouse can be a successor owner/annuitant. Under Traditional IRA, QP
IRA, Standard Roth IRA and Roth Advantage, only a beneficiary who is the
surviving spouse can be treated as the successor owner/annuitant.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner can change after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want the person named to receive the death benefit upon the annuitant's death
to be the successor owner, you should name a specific successor owner. You may
name a different person that will become the successor owner at any time by
sending satisfactory notice to our Processing Office. This person will be
considered the "beneficiary" for purposes of the distribution rules described
in this section. The surviving owner automatically takes the place of any other
beneficiary designation.
Under NQ contracts when the owner dies the person designated as successor
owner becomes the new owner.
Unless the surviving spouse of the owner who has died is the successor owner
for this purpose, the entire interest in the contract must be distributed
under the following rules:
o The cash value of the contract must be fully paid to the designated
beneficiary (new owner) by December 31st of the fifth calendar year after
your death.
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless
this alternative is elected, we will pay any cash value on December 31st
of the fifth calendar year following the year of your death.
o If the surviving spouse is the successor owner, the spouse may elect to
continue the contract. No distributions are required as long as the
surviving spouse and annuitant
are living.
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PAYMENT OF DEATH BENEFIT 59
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HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the
death benefit in a single sum. However, subject to any exceptions in the
contract, our rules and any applicable requirements under federal income tax
rules, the beneficiary may elect to apply the death benefit to one or more
annuity payout options we offer at the time. See "Choosing your annuity payout
options" earlier in this prospectus. Please note that if you are both the
contract owner and the annuitant, you may elect only a life annuity or an
annuity that does not extend beyond the life expectancy of the beneficiary.
Single sum payments generally are paid through the Equitable Life Access
Account(TM), an interest bearing checking account. Beneficiaries have
immediate access to the proceeds by writing a check on the account. We pay
interest from the date the single sum is deposited into the Access Account
until the account is closed.
SUCCESSOR OWNER AND ANNUITANT
SERIES 300 AND 400 CONTRACTS ONLY. If you are both the contract owner and the
annuitant, your surviving spouse can automatically become both the successor
annuitant and contract owner if you elect to have your spouse be the sole
primary beneficiary, as well as the successor annuitant and contract owner. In
such a case, no death benefit is payable until your surviving spouse's death.
SERIES 400 TRADITIONAL IRA AND QP IRA CONTRACTS. If your spouse is the sole
primary beneficiary, then upon your death, your spouse may elect to receive
the death benefit or continue the contract as the successor annuitant and
contract owner.
BENEFICIARY CONTINUATION OPTION UNDER SERIES 400 TRADITIONAL IRA AND QP IRA
CONTRACTS
Upon your death, a non-spouse beneficiary may generally elect to keep the
contract in your name and receive distributions under the contract instead of
the death benefit being paid in a single sum. The account value used to
provide the distributions will be increased to equal the amount of the death
benefit.
The beneficiary's choices depend in part on whether or not you were taking
required minimum distributions withdrawals under the contract prior to your
death.
(1) If you were taking required minimum distributions under the contract, the
distributions to the beneficiary must continue be made at least as
rapidly as prior to your death.
(2) If you die before you must take required minimum distributions under the
contract, the beneficiary may begin taking minimum distributions under
the contract, but such withdrawals must be based on the beneficiary's
life expectancy. The withdrawals must begin by December 31st of the
calendar year following your death. If there is more than one
beneficiary, the shortest life expectancy must be used.
(3) The withdrawals must be taken annually. There will not be a withdrawal
charge for these withdrawals. The beneficiary along with his or her tax
adviser will be responsible for determining the amount of the
withdrawals.
(4) The designated beneficiary must be a natural person and of legal age at
the time of election. The beneficiary must elect this option within 30
days following the date we receive proof of your death. If no election
is made within 30 days to: (1) receive the death benefit, or (2)
continue the contract and take annual withdrawals as described above, or
(3) defer payment of the account value for five years, the death benefit
will be paid to the beneficiary according to our standard procedures.
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60 PAYMENT OF DEATH BENEFIT
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(5) While the contract continues in your name, the beneficiary may transfer
the contract's account value among the investment options. However,
additional contributions will not be permitted and the death benefit
(including the minimum death benefit) provisions will no longer be in
effect. Although the only withdrawals that will be permitted are minimum
distribution withdrawals, the beneficiary may choose at any time to
withdraw all of the account value and no withdrawal charges will apply.
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7
Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax
rules that generally apply to EQUI-VEST contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Traditional IRA, QP IRA, Standard Roth IRA, or Roth Advantage.
Therefore, we discuss the tax aspects of each type of contract separately.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may
vary depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document,
but should consult your tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides
tax deferral under the Internal Revenue Code (IRA and QP IRA) you should do so
for the contract's features and benefits other than tax deferral. In such
situations, the tax deferral of the contract does not provide additional
benefits.
Federal income tax rules include the United States laws in the Internal
Revenue Code, and Treasury Department Regulations and Internal Revenue Service
("IRS") interpretations of the Internal Revenue Code. These tax rules may
change. We cannot predict whether, when, or how these rules could change. Any
change could affect contracts purchased before the change.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions for a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that we issue to you during the
same calendar year are linked together and treated as one contract for
calculating the taxable amount of any distribution from any of those
contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your
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62 TAX INFORMATION
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investment in the contract divided by the number of expected payments is your
tax-free portion of each payment.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract,
they are taxable to you as ordinary income if there are earnings in the
contract. Generally, earnings are your account value less your investment in
the contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o The contract which is the source of the funds your are using to purchase
the NQ contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o The owner and the annuitant are the same under the source contract and the
EQUI-VEST NQ contract (if you are using a life insurance or endowment
contract the owner and the insured must be the same on both sides of the
exchange transaction).
The tax basis of the source contract carries over to the EQUI-VEST NQ contract.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit" and
"When an NQ contract owner dies before the annuitant" earlier in this
prospectus. The tax treatment of a death benefit taken as a single sum is
generally the same as the tax treatment of a withdrawal from or surrender of
your contract. The tax treatment of a death benefit taken as annuity payments
is generally the same as the tax treatment of annuity payments under
your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of
the taxable portion of your distribution applies in addition to the income
tax. The extra penalty tax does not apply to pre-age 59 1/2 distributions
made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S.-source. A Puerto
Rico resident is subject to U.S. taxation on such U.S.-source income. Only
Puerto Rico-source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your
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personal situation and the timing of the different tax liabilities, you may
not be able to take full advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets can include mutual
funds and certificates of deposit. In an individual retirement annuity, an
insurance company issues an annuity contract that serves as the IRA.
There are several types of IRAs, as follows:
o "Traditional IRAs," typically funded on a pre-tax basis;
o Roth IRAs, first available in 1998, funded on an after-tax basis; and
o SEP-IRAs and SIMPLE-IRAs, issued and funded in connection with
employer-sponsored retirement plans.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as
you would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS website (www.irs.ustreas.gov).
The EQUI-VEST Traditional IRA contract is designed to qualify as an
"individual retirement annuity" under Section 408(b) of the Internal Revenue
Code. This prospectus contains the information that the IRS requires you to
have before you purchase an IRA. This section of the prospectus covers some of
the special tax rules that apply to IRAs. The next section covers Roth IRAs.
Education IRAs are not discussed in this prospectus because they are not
available in individual retirement annuity form.
The EQUI-VEST IRA contract has been approved by the IRS as to form for use as
a Traditional IRA. We expect to submit the Roth IRA version for formal IRS
approval in 1999. This IRS approval is a determination only as to the form of
the annuity. It does not represent a determination of the merits of the
annuity as an investment. The IRS approval does not address every feature
possibly available under the EQUI-VEST IRA contract.
CANCELLATION
You can cancel an EQUI-VEST IRA contract (Traditional IRA, QP IRA, Standard
Roth IRA or Roth Advantage) by following the directions under "Your right to
cancel within a certain number of days" earlier in the prospectus. You can
cancel an EQUI-VEST Standard Roth IRA or a Roth Advantage contract issued as a
result of a full or partial conversion of an EQUI-VEST Traditional IRA
contract by following the instructions in the "EQUI-VEST Roth IRA
Re-Characterization Form." The form is available from our Processing Office or
your Equitable associate. If you cancel a Traditional IRA, Standard Roth IRA
or Roth Advantage contract, we may have to withhold tax, and we must report
the transaction to the IRS. A contract cancellation could have an unfavorable
tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES
(TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS
Individuals may make three different types of contributions to a Traditional
IRA:
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64 TAX INFORMATION
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o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other Traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
Limits on contributions to Traditional IRAs
Generally, $2,000 is the maximum amount that you may contribute to all IRAs
(including Roth IRAs) in any taxable year. When your earnings are below
$2,000, your earned income or compensation for the year is the most you can
contribute. This $2,000 limit does not apply to rollover contributions or
direct custodian-to-custodian transfers into a Traditional IRA. You cannot
make regular contributions for the tax year in which you reach age 70 1/2 or
any tax year after that.
Special rules for spouses
If you are married and file a joint income tax return, you and your spouse may
combine your compensation to determine the amount of regular contributions you
are permitted to make to Traditional IRAs (Roth IRAs discussed below). Even if
one spouse has no compensation or compensation under $2,000, married
individuals filing jointly can contribute up to $4,000 for any taxable year to
any combination of Traditional IRAs and Roth IRAs. (Any contributions to Roth
IRAs reduce the ability to contribute to Traditional IRAs and vice versa.) The
maximum amount may be less if earned income is less and the other spouse has
made IRA contributions. No more than a combined total of $2,000 can be
contributed annually to either spouse's Traditional IRAs and Roth IRAs. Each
spouse owns his or her Traditional IRAs and Roth IRAs even if the other spouse
funded the contributions. A working spouse age 70 1/2 or over can contribute
up to the lesser of $2,000 or 100% of "earned income" to a Traditional IRA for
a nonworking spouse until the year in which the nonworking spouse reaches age
70 1/2.
Deductibility of contributions
The amount of traditional ira contributions that you can deduct for a tax year
depends on whether you are covered by an employer-sponsored tax-favored
retirement plan, as defined under special federal income tax rules. Your Form
W-2 will indicate whether or not you are covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you
can make fully deductible contributions to your Traditional IRAs for each tax
year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your Traditional IRAs.
For each tax year your fully deductible contribution can be up to $2,000 or,
if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make partially deductible
contributions to your Traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct
any of your regular contribution to your Traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for IRA contributions phases out with AGI between
$31,000 and $41,000 in 1999. This range will increase every year until 2005
when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a
retirement plan during any part of the taxable year, the deduction for
Traditional IRA contributions phases out with AGI between $51,000 and $61,000
in 1999. This range will increase every year until 2007 when the range is
$80,000-$100,000.
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Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan
of an individual is determined independently for each spouse. Where spouses
have "married filing jointly" status, however, the maximum deductible
Traditional IRA contribution for an individual who is not an active
participant (but whose spouse is an active participant) is phased out for
taxpayers with AGI of between $150,000 and $160,000.
To determine the deductible amount of the contribution in 1999, you determine
AGI and subtract $31,000 if you are single, or $51,000 if you are married and
file a joint return with your spouse. The resulting amount is your Excess AGI.
You then determine the limit on the deduction for Traditional IRA
contributions using the following formula:
times $2,000 (or earned Equals the adjusted
($10,000-excess AGI) x income, if less) = deductible
- --------------------- contribution
divided by $10,0000 limit
Nondeductible regular contributions
If you are not eligible to deduct part or all of the Traditional IRA
contribution, you may still make nondeductible contributions on which earnings
will accumulate on a tax-deferred basis. The combined deductible and
nondeductible contributions to your Traditional IRA (or the nonworking
spouse's Traditional IRA) may not, however, exceed the maximum $2,000 per
person limit. See "Excess Contributions" below. You must keep your own records
of deductible and nondeductible contributions in order to prevent double
taxation on the distribution of previously taxed amounts. See "Withdrawals,
payments and transfer of funds out of Traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a Traditional IRA in prior years and are
receiving distributions from any Traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible
Traditional IRA contributions, you must retain all income tax returns and
records pertaining to such contributions until interests in all Traditional
IRAs are fully distributed.
When you can make regular contributions
If you file your tax returns on a calendar year basis like most taxpayers, you
have until the April 15th return filing deadline (without extensions) of the
following calendar year to make your regular contributions for a tax year.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a Traditional IRA made after you reach age
70 1/2; or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover
or regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular contribution, you
cannot take a tax deduction for the amount withdrawn. You do not have to
include the excess contribution withdrawn as part of your income. It is also
not subject to the 10% additional penalty tax on early distributions discussed
below under "Early distribution penalty tax." You do have to withdraw any
earnings that are attributed to the excess contribution. The withdrawn
earnings would be included in your gross income and could be subject to the
10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
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66 TAX INFORMATION
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(1) the rollover was from a qualified retirement plan to a Traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a Traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other Traditional IRAs.
You may also change your mind about amounts contributed as Roth IRA funds to
Traditional IRA funds, in accordance with special federal income tax rules, if
you use the forms we prescribe. This is referred to as having
"recharacterized" your contribution.
Any amount contributed to a Traditional IRA after you reach age 70 1/2 must
be net of your required minimum distribution for the year in which the
rollover or direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll
it over to a Traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your Traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible
rollover distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of
you and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions which fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one Traditional IRA to one or more of your
other Traditional IRAs if you complete the transaction within 60 days after
you receive the funds. You may make such a rollover only once in every
12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers are not rollover transactions. You can
make these more frequently than once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Traditional IRA to one or more other
Traditional IRAs. Also, in some cases, Traditional IRAs can be transferred on
a tax-free basis
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between spouses or former spouses as a result of a court ordered divorce or
separation decree.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
No federal income tax law restrictions on withdrawals
You can withdraw any or all of your funds from a Traditional IRA at any time.
You do not need to wait for a special event like retirement.
Taxation of payments
Earnings in Traditional IRAs are not subject to federal income tax until you
or your beneficiary receives them. Taxable payments or distributions include
withdrawals from your contract, surrender of your contract and annuity
payments from your contract. Death benefits are also taxable. Except as
discussed below, the total amount of any distribution from a Traditional IRA
must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any Traditional IRA
(it does not have to be to this particular Traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
Traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to Traditional IRAs. At the end of any year in
which you have received a distribution from any Traditional IRA, you calculate
the ratio of your total nondeductible Traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
Traditional IRAs you own at the end of the year plus all Traditional IRA
distributions made during the year. Multiply this by all distributions from
the Traditional IRA during the year to determine the nontaxable portion of
each distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another Traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the Traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this "conduit" Traditional IRA
treatment:
o the source of funds you used to establish the Traditional IRA must have
been a rollover contribution from a qualified plan, and
o the entire amount received from the Traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment, if you make an eligible rollover
distribution contribution to a Traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to
roll over these eligible rollover distribution contributions and earnings to
another qualified plan or TSA at a future date.
Distributions from a Traditional IRA are not eligible for favorable five-year
averaging (or, in some cases, ten-year averaging and long-term capital gain
treatment) available to certain distributions from qualified plans.
The EQUI-VEST QP IRA contract can be used as a conduit IRA if amounts are not
commingled.
REQUIRED MINIMUM DISTRIBUTIONS
Lifetime required minimum distributions
You must start taking annual distributions from your Traditional IRAs
beginning at age 70 1/2.
When you have to take the first required minimum distribution
The first required minimum distribution is for the calendar year in which you
turn age 70 1/2. You have the choice to take this first required minimum
distribution during the calendar year you actually reach age 70 1/2, or to
delay taking
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68 TAX INFORMATION
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it until the first three-month period in the next calendar year (January 1 -
April 1). Distributions must start no later than your "required beginning
date," which is April 1st of the calendar year after the calendar year in
which you turn age 70 1/2. If you choose to delay taking the first annual
minimum distribution, then you will have to take two minimum distributions in
that year - the delayed one for the first year and the one actually for that
year. Once minimum distributions begin, they must be made at some time each
year.
How you calculate required minimum distributions
There are two approaches to taking required minimum distributions -
"account-based" or "annuity-based."
Account-based method. If you choose an "account-based" method, you divide the
value of your Traditional IRA as of December 31st of the past calendar year by
a life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required
minimum distribution amount will vary each year as the account value and your
life expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose
a method based only on your life expectancy, or the joint life expectancies of
you and another individual. You can decide to "recalculate" your life
expectancy every year by using your current life expectancy factor. You can
decide instead to use the "term certain" method, where you reduce your life
expectancy by one every year after the initial year. If your spouse is your
designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you can also annually "recalculate" your
spouse's life expectancy if you want. If you choose someone who is not your
spouse as your designated beneficiary for the purpose of calculating annual
account-based required minimum distributions, you have to use the "term
certain" method of calculating that person's life expectancy. If you pick a
nonspouse designated beneficiary, you may also have to do another special
calculation.
You can later apply your Traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate selecting any form of life annuity
payout after you are age 70 1/2, you must have elected to recalculate life
expectancies.
Annuity-based method. If you choose an annuity-based method you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
Do you have to pick the same method to calculate your required minimum
distributions for all of your Traditional IRAs and other retirement plans?
No. If you want, you can choose a different method and a different beneficiary
for each of your Traditional IRAs and other retirement plans. For example, you
can choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
Will we pay you the annual amount every year from your Traditional IRA based
on the method you choose?
No, unless you affirmatively select an annuity payout option or an
account-based withdrawal option such as our minimum distribution withdrawal
option. Because the options we offer do not cover every option permitted under
federal income tax rules, you may prefer to do your own required minimum
distribution calculations for one or more of your Traditional IRAs.
What if you take more than you need to for any year?
The required minimum distribution amount for your Traditional IRAs is
calculated on a year-by-year basis. There are no carry-back or carry-forward
provisions. Also, you cannot apply required minimum distribution amounts you
take from your qualified plans to the amounts you have to take from your
Traditional IRAs and vice-versa. However, the
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TAX INFORMATION 69
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IRS will let you calculate the required minimum distribution for each
Traditional IRA that you maintain, using the method that you picked for that
particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall Traditional IRA required minimum distribution amount,
you may choose to take your annual required minimum distribution from any one
or more Traditional IRAs that you own.
What if you take less than you need to for any year?
Your IRA could be disqualified, and you could have to pay tax on the entire
value. Even if your IRA is not disqualified, you could have to pay a 50%
penalty tax on the shortfall (required amount for Traditional IRAs less amount
actually taken). It is your responsibility to meet the required minimum
distribution rules. We will remind you when our records show that your age
70 1/2 is approaching. If you do not select a method with us, we will assume
you are taking your required minimum distribution from another Traditional IRA
that you own.
What are the required minimum distribution payments after you die?
If you die after either (a) the start of annuity payments, or (b) your
required beginning date, your beneficiary must receive payment of the
remaining values in the contract at least as rapidly as under the distribution
method before your death. In some circumstances, your surviving spouse may
elect to become the owner of the Traditional IRA and halt distributions until
he or she reaches age 70 1/2.
If you die before your required beginning date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain
that does not extend beyond the beneficiary's life expectancy are also
permitted, if these payments start within one year of your death. A surviving
spouse beneficiary can also (a) delay starting any payments until you would
have reached age 70 1/2 or (b) roll over your Traditional IRA into his or her
own Traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your
surviving spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a Traditional IRA. You cannot use a Traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA
or use it as collateral, its tax-favored status will be lost as of the first
day of the tax year in which this prohibited event occurs. If this happens,
you must include the value of the Traditional IRA in your federal gross
income. Also, the early distribution penalty tax of 10% will apply if you have
not reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a Traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o to pay certain first-time home buyer expenses (special federal income tax
definition); or
o to pay certain higher education expenses (special federal income tax
definition); or
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70 TAX INFORMATION
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o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
ILLUSTRATION OF GUARANTEED INTEREST RATES
In the following two tables, we provide information that the IRS requires us
to furnish to prospective IRA contract owners. In the tables we illustrate the
3% minimum guaranteed interest rate for contributions we assume are allocated
entirely to the guaranteed interest option under series 300 and 400 contracts.
In Table I we assume a $1,000 contribution made annually on the contract date
and on each anniversary after that. We assume no withdrawals or transfers were
made under the contract. In Table II we assume a single initial contribution
of $1,000, and no additional contributions. We also assume no withdrawals or
transfers. The 3% guaranteed interest rate is in the contract.
The values shown assume the withdrawal charge applies. These values reflect
the effect of the annual administrative charge deducted at the end of each
contract year in which the account value is less than $20,000.
To find the appropriate value for the end of the contract year at any
particular age, you subtract the age (nearest birthday) at issue of the
contract from the current age and find the corresponding year in the table.
Years that correspond to a current age over 70, should be ignored, unless the
contract is a Roth IRA.
You should consider the information shown in the tables in light of your
present age. Also, with respect to Table I, you should consider your ability
to contribute $1,000 annually. Any change in the amounts contributed annually,
or in the amount of the single contribution would, of course, change the
results shown.
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TABLE I
ACCOUNT VALUES AND CASH VALUES
(assuming $1,000 contributions made annually
at the beginning of the contract year)
3% MINIMUM GUARANTEE
- ------------------------------------------------------------------------------
CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- ------------------------------------------------------------------------------
1 $ 1,009.40 $ 954.89
2 $ 2,039.68 $ 1,929.54
3 $ 3,100.87 $ 2,933.43
4 $ 4,193.90 $ 3,967.43
5 $ 5,319.72 $ 5,032.45
6 $ 6,479.31 $ 6,129.42
7 $ 7,673.69 $ 7,313.69
8 $ 8,903.90 $ 8,543.90
9 $10,171.01 $ 9,811.01
10 $11,476.14 $11,116.14
11 $12,820.43 $12,460.43
12 $14,205.04 $13,845.04
13 $15,631.19 $15,271.19
14 $17,100.13 $16,740.13
15 $18,613.13 $18,253.13
16 $20,201.53 $19,841.53
17 $21,837.57 $21,477.57
18 $23,522.70 $23,162.70
19 $25,258.38 $24,898.38
20 $27,046.13 $26,686.13
21 $28,887.52 $28,527.52
22 $30,784.14 $30,424.14
23 $32,737.67 $32,377.67
24 $34,749.80 $34,389.80
25 $36,822.29 $36,462.29
3% MINIMUM GUARANTEE
- ------------------------------------------------------------------------------
CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- ------------------------------------------------------------------------------
26 $ 38,956.96 $ 38,596.96
27 $ 41,155.67 $ 40,795.67
28 $ 43,420.34 $ 43,060.34
29 $ 45,752.95 $ 45,392.95
30 $ 48,155.53 $ 47,795.53
31 $ 50,630.20 $ 50,270.20
32 $ 53,179.11 $ 52,819.11
33 $ 55,804.48 $ 55,444.48
34 $ 58,508.61 $ 58,148.61
35 $ 61,293.87 $ 60,933.87
36 $ 64,162.69 $ 63,802.69
37 $ 67,117.57 $ 66,757.57
38 $ 70,161.10 $ 69,801.10
39 $ 73,295.93 $ 72,935.93
40 $ 76,524.81 $ 76,164.81
41 $ 79,850.55 $ 79,490.55
42 $ 83,276.07 $ 82,916.07
43 $ 86,804.35 $ 86,444.35
44 $ 90,438.48 $ 90,078.48
45 $ 94,181.64 $ 93,821.64
46 $ 98,037.08 $ 97,677.08
47 $102,008.20 $101,648.20
48 $106,098.44 $105,738.44
49 $110,311.40 $109,951.40
50 $114,650.74 $114,290.74
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72 TAX INFORMATION
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TABLE II
ACCOUNT VALUES AND CASH VALUES
(assuming a single contribution of $1,000 and
no further contribution)
3% MINIMUM GUARANTEE
- ----------------------------------------------------------------
CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- -------------- ---------------- ----------------------------
1 $1,009.40 $ 954.89
2 $1,018.89 $ 963.87
3 $1,019.46 $ 964.40
4 $1,020.04 $ 964.96
5 $1,020.64 $ 965.53
6 $1,021.26 $ 966.11
7 $1,021.90 $1,021.90
8 $1,022.55 $1,022.55
9 $1,023.23 $1,023.23
10 $1,023.93 $1,023.93
11 $1,024.65 $1,024.65
12 $1,025.38 $1,025.38
13 $1,026.15 $1,026.15
14 $1,026.93 $1,026.93
15 $1,027.74 $1,027.74
16 $1,028.57 $1,028.57
17 $1,029.43 $1,029.43
18 $1,030.31 $1,030.31
19 $1,031.22 $1,031.22
20 $1,032.16 $1,032.16
21 $1,033.12 $1,033.12
22 $1,034.11 $1,034.11
23 $1,035.14 $1,035.14
24 $1,036.19 $1,036.19
25 $1,037.28 $1,037.28
3% Minimum Guarantee
- ----------------------------------------------------------------
Contract Account Cash
Year End Value Value
- -------------- ---------------- ----------------------------
26 $1,038.40 $1,038.40
27 $1,039.55 $1,039.55
28 $1,040.73 $1,040.73
29 $1,041.96 $1,041.96
30 $1,043.22 $1,043.22
31 $1,044.51 $1,044.51
32 $1,045.85 $1,045.85
33 $1,047.22 $1,047.22
34 $1,048.64 $1,048.64
35 $1,050.10 $1,050.10
36 $1,051.60 $1,051.60
37 $1,053.15 $1,053.15
38 $1,054.74 $1,054.74
39 $1,056.39 $1,056.39
40 $1,058.08 $1,058.08
41 $1,059.82 $1,059.82
42 $1,061.61 $1,061.61
43 $1,063.46 $1,063.46
44 $1,065.37 $1,065.37
45 $1,067.33 $1,067.33
46 $1,069.35 $1,069.35
47 $1,071.43 $1,071.43
48 $1,073.57 $1,073.57
49 $1,075.78 $1,075.78
50 $1,078.05 $1,078.05
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ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Standard Roth IRAs. If the rules are the same as those that apply to the
Traditional IRA, we will refer you to the same topic under "Traditional IRAs."
The EQUI-VEST Standard Roth IRA and Roth Advantage contracts are designed to
qualify as Roth individual retirement annuities under Sections 408A and 408(b)
of the Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from Traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
If you use the forms we require, we will also accept Traditional IRA funds
which are subsequently recharacterized as Roth IRA funds following special
federal income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
Limits on regular contributions.
Generally, $2,000 is the maximum amount that you may contribute to all IRAs
(including Roth IRAs) in any taxable year. This $2,000 limit does not apply to
rollover contributions or direct custodian-to-custodian transfers into a Roth
IRA. Any contributions to Roth IRAs reduce your ability to contribute to
Traditional IRAs and vice versa. When your earnings are below $2,000, your
earned income or compensation for the year is the most you can contribute. If
you are married and file a joint income tax return, you and your spouse may
combine your compensation to determine the amount of regular IRA and after-tax
contributions you are permitted to make to Roth IRAs and Traditional IRAs. See
the discussion above under Traditional IRAs.
With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for
any year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or,
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in
reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contribution you are permitted to
make is phased out. If your adjusted gross income is more than $10,000 you
cannot make a regular Roth IRA contribution.
When you can make contributions?
Same as Traditional IRAs.
Deductibility of contributions
Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
What is the difference between rollover and direct transfer transactions?
You may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another Traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
"conversion" rollover ("conversion contribution").
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74 TAX INFORMATION
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You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of
the Internal Revenue Code. You may make direct transfer contributions to a
Roth IRA only from another Roth IRA.
The difference between a rollover transaction and a direct transfer
transaction is the following. In a rollover transaction you actually take
possession of the funds rolled over, or are considered to have received them
under tax law in the case of a change from one type of plan to another. In a
direct transfer transaction, you never take possession of the funds, but
direct the first Roth IRA custodian, trustee, or issuer to transfer the first
Roth IRA funds directly to Equitable Life, as the Roth IRA issuer. You can
make direct transfer transactions only between identical plan types (for
example, Roth IRA to Roth IRA). You can also make rollover transactions
between identical plan types. However, you can only use rollover transactions
between different plan types (for example, Traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a
completely tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In
some cases, Roth IRAs can be transferred on a tax-free basis between spouses
or former spouses as a result of a court ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a Traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered
to have received) the Traditional IRA proceeds. Unlike a rollover from a
Traditional IRA to another Traditional IRA, the conversion rollover
transaction is not tax-free. Instead, the distribution from the Traditional
IRA is generally fully taxable. For this reason, we are required to withhold
10% federal income tax from the amount converted unless you elect out of such
withholding. (If you have ever made nondeductible regular IRA contributions to
any Traditional IRA - whether or not it is the Traditional IRA you are
converting - a pro rata portion of the distribution is tax-free.)
There is, however, no early distribution penalty tax on the Traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. (For this purpose, your
adjusted gross income is calculated without the gross income stemming from the
Traditional IRA conversion.) You also cannot make conversion contributions to
a Roth IRA for any taxable year in which your federal income tax filing status
is "married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your Traditional IRA are subject to the annual required
minimum distribution rule applicable to Traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS
You can withdraw any or all of your funds from a Roth IRA at any time; you do
not need to wait for a special event
like retirement.
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DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender and termination
of your contract and annuity payments from your contract. Death benefits are
also distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollovers from a Roth IRA to another Roth IRA;
o Direct transfers from a Roth IRA to another Roth IRA;
o "Qualified Distributions" from Roth IRAs; and
o Return of excess contributions or amounts recharacterized to a Traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS
Qualified distributions from Roth IRAs made because of one of the following four
qualifying events or reasons are not includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your Traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or not
the one from which the distribution is being made). It is not possible to have a
tax-free qualified distribution before the year 2003 because of the five-year
aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS
Nonqualified distributions from Roth IRAs are distributions that do not meet the
qualifying event and five-year aging period tests described above. Such
distributions are potentially taxable as ordinary income. Nonqualified
distributions receive return-of-investment-first treatment. Only the difference
between the amount of the distribution and the amount of contributions to all of
your Roth IRAs is taxable. You have to reduce the amount of contributions to all
of your Roth IRAs to reflect any previous tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like Traditional IRAs, taxable distributions from a Roth IRA are not entitled to
the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available in
certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as Traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as Traditional IRA.
EXCESS CONTRIBUTIONS
Same as Traditional IRA, except that "regular" contributions made after age
70 1/2 are not "excess contributions."
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a Traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
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76 TAX INFORMATION
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You can withdraw or recharacterize any contribution to a Roth IRA before the due
date (including extensions) for filing your federal income tax return for the
tax year. If you do this, you must also withdraw or recharacterize any earnings
attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as Traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn attributable
to 1998 conversion rollovers.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold on amounts we pay under a o free look or
cancellation.
o We are generally required to withhold on conversion o rollovers of
Traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
Traditional IRA and is taxable.
o We are required to withhold on the gross amount of a o distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or
in part.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our Processing Office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,700 in periodic annuity payments in
1999 your payments will generally be exempt from federal income tax withholding.
You could specify a different choice of withholding exemption or request that
tax be withheld. Your withholding election remains effective unless and until
you revoke it. You may revoke or change your withholding election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender, termination, or partial
withdrawal), we generally withhold at a flat 10%
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TAX INFORMATIONS 77
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rate. We apply that rate to the taxable amount in the case of nonqualified
contracts, and to the payment amount in the case of IRAs and Roth IRAs.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account A for taxes. We do not
now, but may in the future set up reserves for such taxes.
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8
More information
ABOUT OUR SEPARATE ACCOUNT A
Each variable investment option is a subaccount of our Separate Account A. We
established Separate Account A in 1968 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts, including these contracts. We are the
legal owner of all of the assets in Separate Account A and may withdraw any
amounts that exceed our reserves and other liabilities with respect to variable
investment options under our contracts. The results of Separate Account A's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account A is registered under the Investment Company Act of 1940 and is
classified by that act as a "unit investment trust." The SEC, however, does not
manage or supervise Equitable Life or Separate Account A.
Each subaccount (variable investment option) within Separate Account A invests
solely in Class IA or Class IB shares, respectively, issued by the corresponding
Portfolios of The Hudson River Trust and EQ Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account A, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account A or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account A or a
variable investment option directly);
(5) to deregister Separate Account A under the Investment Company Act of 1940;
(6) to restrict or eliminate any voting rights as to Separate Account A; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE HUDSON RIVER TRUST AND EQ ADVISORS TRUST
The Hudson River Trust and EQ Advisors Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each trust issues different
shares relating to each Portfolio.
The Hudson River Trust and EQ Advisors Trust do not impose sales charges or
"loads" for buying and selling their shares. All dividends and other
distributions on a trust's shares are reinvested in full. The Board of Trustees
of The Hudson River Trust and EQ Advisors Trust each may establish additional
Portfolios or eliminate existing Portfolios at any time. More detailed
information about The Hudson River Trust and EQ Advisors Trust, their investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 plan
relating to the Class IB shares of EQ Advisors Trust, and other aspects of their
operations, appears in their prospectuses, or in their SAIs which are available
upon request.
PROPOSED SUBSTITUTION OF PORTFOLIOS. We are asking the SEC to approve the
substitution of 14 newly created Portfolios of the EQ Advisors Trust for The
Hudson River Trust Portfolios currently available under the variable investment
options (the "Substitution"). The EQ Advisors Trust Portfolios will have
substantially identical investment objectives, strategies, and policies as those
of The Hudson River Trust Portfolios they would replace. The assets of any
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Portfolio of The Hudson River Trust underlying your contract would be
transferred to the substituted EQ Advisors Trust Portfolio.
We believe that this Substitution will be in your best interest because you
would have a single set of variable investment options with similar advisory
structures. You also will have a single EQ Advisors Trust prospectus for all the
Portfolios, rather than the two separate prospectuses you now receive. EQ
Financial Consultants Inc. will be the manager of the new EQ Advisors Trust
Portfolios, and Alliance Capital Management L.P. will continue to provide the
day-to-day advisory services to each of the new Portfolios.
You should note that:
o No action is required on your part. You will not need to vote a proxy, file
a new election, or take any other action if the SEC approves the
Substitution.
o The elections you have on file for allocating your account value and
contributions will remain unchanged until you direct us otherwise.
o We will bear all expenses directly relating to the Substitution
transaction.
o The management fees for the new Portfolios will be the same as those for
the corresponding Portfolios of The Hudson River Trust. Certain of the new
EQ Advisors Trust Portfolios may have slightly higher expense ratios.
o On the effective date of the Substitution transaction, your account value
(i.e., the units you own) in the variable investment options will be the
same as before the transaction.
o The Substitution will have no tax consequences for you.
Please review the EQ Advisors Trust prospectus that accompanies this prospectus.
It contains more information about the EQ Advisors Trust, including its
management structure, advisory arrangements, and general fees and expenses that
will be of interest to you.
Subject to SEC approval, we expect the Substitution to be completed in the fall
of 1999. It will affect everyone who has a balance in The Hudson River Trust
Portfolios at that time. Of course, you may transfer your account value among
the investment options, as usual.
We will notify you when we receive SEC approval, and again when the Substitution
is complete.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the guaranteed interest option and the fixed
maturity options, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to general accounts, however,
may be subject to certain provisions of the federal securities laws relating to
the accuracy and completeness of statements made in prospectuses.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of April 1, 1999 and the related
price per $100 of maturity value were as follows:
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Fixed Maturity
Options
With June 15th
Maturity Date Rate to Maturity as Price
of of Per $100 of
Maturity Year April 1, 1999 Maturity Value
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2000 3.25% $ 96.21
2001 4.04% $ 91.63
2002 4.33% $ 87.29
2003 4.46% $ 83.24
2004 4.52% $ 79.44
2005 4.67% $ 75.33
2006 4.77% $ 71.48
2007 4.79% $ 68.12
2008 4.87% $ 64.54
2009 4.97% $ 60.95
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix III for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.50% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract
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liabilities relating to the contracts are not chargeable with liabilities from
any other business we may conduct. We own the assets of the separate account, as
well as any favorable investment performance on those assets. You do not
participate in the performance of the assets held in this separate account. We
may, subject to state law that applies, transfer all assets allocated to the
separate account to our general account. We guarantee all benefits relating to
your value in the fixed maturity options, regardless of whether assets
supporting fixed maturity options are held in a separate account or our general
account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities and government and agency issues having durations in
the aggregate consistent with those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be require to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR NQ, TRADITIONAL IRA, STANDARD ROTH IRA AND
ROTH ADVANTAGE CONTRACTS
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a bank checking account, bank money market
account, or credit union checking account and contributed as an additional
contribution into an NQ, Traditional IRA, Standard Roth IRA and Roth Advantage
contracts on a monthly basis.
AIP additional contributions may be allocated to any of the variable investment
options and the guaranteed interest option, but not the fixed maturity options.
Our minimum contribution amount requirements apply to AIP. You choose the day of
the month you wish to have your account debited. However, you may not choose a
date later than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our Processing Office.
PAYROLL DEDUCTION PROGRAM. You can authorize your employer to remit your IRA
contributions to us if your employer has a payroll deduction program. Those
contributions are still your contributions, not your employer's.
WIRE TRANSFERS. You may also send your contributions by wire transfer from your
bank.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
Our "business day" is any day on which Equitable Life is open and the New York
Stock Exchange is open for trading. We are closed on national business holidays
including Martin Luther King, Jr. Day and the Friday after Thanksgiving.
Additionally, we may choose to close on the day immediately preceding or
following a national business holiday or due to emergency conditions. Our
business day ends at 4:00 p.m., Eastern Time for purposes of determining the
date when contributions are applied and any other transaction requests are
processed. Contributions will be applied and any other transaction requests will
be processed when they are received along with all the required information
unless another date applies as indicated below.
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o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
o Quarterly rebalancing will be processed on a calendar year basis and
semiannual or annual rebalancing will be processed on the first business
day of the month. Rebalancing will not be done retroactively.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the unit value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Contributions allocated to the guaranteed interest option will receive the
guaranteed interest rate in effect on that business day.
o Transfers to or from variable investment options will be made at the unit
value next determined after the close of the business day.
o Transfers to the guaranteed interest option will receive the guaranteed
interest rate in effect on that business day.
o Transfers to a fixed maturity option will receive the rate to maturity in
effect for that fixed maturity option on that business day.
o Transfers out of a fixed maturity option will be at the market adjusted
amount on that business day.
o For the fixed-dollar option, the first monthly transfer will occur on the
last business day of the month in which we receive your election form at
our Processing Office.
o For the interest sweep, the first monthly transfer will occur on the last
business day of the following month we receive your election form at our
Processing Office.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of The Hudson River Trust and EQ Advisors Trust we
have the right to vote on certain matters involving the Portfolios, such as:
o The election of trustees.
o The formal approval of independent auditors selected for each trust.
o Any other matters described in the prospectuses for the trusts or requiring
a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a Portfolio for which no instructions have been received in the
same proportion as we vote shares of that Portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a Portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control each trust. EQ Advisors Trust shares are sold only to our
separate accounts and an affiliated qualified plan trust. The Hudson River Trust
shares are held by other separate accounts of ours and by separate accounts of
insurance companies unaffiliated with us. Shares held by these separate accounts
will probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Hudson River
Trust Board of Trustees intends to monitor events in order to identify any
material irreconcilable conflicts that may arise and to determine what
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action, if any, should be taken in response. If we believe that a response to
any of those events insufficiently protects our contract owners, we will see to
it that appropriate action is taken.
SEPARATE ACCOUNT A VOTING RIGHTS
If actions relating to Separate Account A require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT OUR YEAR 2000 PROGRESS
Equitable Life relies upon various computer systems in order to administer your
contract and operate the investment options. Some of these systems belong to
service providers who are not affiliated with Equitable Life.
In 1995, Equitable Life began addressing the question of whether its computer
systems would recognize the year 2000 before, on or after January 1, 2000, and
Equitable Life has identified those of its systems critical to business
operations that were not year 2000 compliant. By year end 1998, the work of
modifying or replacing non-compliant systems was substantially completed.
Equitable Life has begun comprehensive testing of its year 2000 compliance and
expects that the testing will be substantially completed by June 30, 1999.
Equitable Life has contacted third-party service providers to seek confirmation
that they are acting to address the year 2000 issue with the goal of avoiding
any material adverse effect on services provided to contract owners and on
operations of the investment options. Most third-party service providers have
provided Equitable Life confirmation of their year 2000 compliance. Equitable
Life believes it is on schedule for substantially all such systems and services,
including those considered to be mission-critical, to be confirmed as year 2000
compliant, renovated, replaced or the subject of contingency plans, by June 30,
1999, except for one investment accounting system that is scheduled to be
replaced by August 31, 1999 and confirmed as year 2000 compliant by September
30, 1999. Additionally, Equitable Life will be supplementing its existing
business continuity and disaster recovery plans to cover certain categories of
contingencies that could arise as a result of year 2000 related failures. Year
2000 specific contingency plans are anticipated to be in place by June 30, 1999.
There are many risks associated with year 2000 issues, including the risk that
Equitable Life's computer systems will not operate as intended. Additionally,
there can be no assurance that the systems of third parties will be year 2000
compliant. Any significant unresolved difficulty related to the year 2000
compliance initiatives could result in an interruption in, or a failure of,
normal business operations and, accordingly, could have a material adverse
effect on our ability to administer your contract and operate the investment
options.
To the fullest extent permitted by law, the foregoing year 2000 discussion is a
"Year 2000 Readiness Disclosure" within the meaning of The Year 2000 Information
and Readiness Disclosure Act, 15 U.S.C. Sec. 1 (1998).
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account A, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
<PAGE>
- --------------------------------------------------------------------------------
84 MORE INFORMATION
- --------------------------------------------------------------------------------
ABOUT OUR INDEPENDENT ACCOUNTANTS
The financial statements of Equitable Life incorporated in this prospectus by
reference to the Annual Report on Form 10-K at December 31, 1998 and 1997, and
for the three years ended December 31, 1998, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive written
notification of any change at our Processing Office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" above.
You cannot assign or transfer ownership of a Traditional IRA, QP IRA or Roth IRA
contract except by surrender to us. Loans are not available and you cannot
assign Traditional IRA, QP IRA and Roth IRA contracts as security for a loan or
other obligation.
For limited transfers of ownership after the owner's death see "Payment of death
benefit" and "Beneficiary continuation option under series 400 Traditional IRA
and QP IRA contracts." You may direct the transfer of the values under your
Traditional IRA, QP IRA and Roth IRA contract to another similar arrangement.
DISTRIBUTION OF THE CONTRACTS
Equitable Financial Consultants, Inc. ("EQF"), an indirect, wholly owned
subsidiary of Equitable Life, is the distributor of the contracts and has
responsibility for sales and marketing functions for Separate Account A. During
1999, EQF plans to change its name to AXA Advisors, Inc. EQF serves as the
principal underwriter of Separate Account A. EQF is registered with the SEC as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. EQF's principal business address is 1290 Avenue of the Americas, New York,
NY 10104. Under a Distribution and Servicing Agreement between EQF, Equitable
life, and certain of Equitable Life's separate accounts, including Separate
Account A, Equitable Life paid EQF fees of $325,380 for 1998 and $325,380 for
1997, as distributor of certain contracts and as the principal underwriter of
certain separate accounts, including Separate Account A.
The contracts will be sold by registered representatives of EQF and its
affiliates, who are also our licensed insurance agents. EQF may also receive
compensation and reimbursement for its marketing services under the terms of its
distributions agreement with Equitable Life. The offering of the contracts is
intended to be continuous.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 85
- --------------------------------------------------------------------------------
9
Investment performance
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the Portfolios
in which they invest. We include these tables because they may be of general
interest to you. THE RESULTS SHOWN REFLECT PAST PERFORMANCE. THEY DO NOT
INDICATE HOW THE VARIABLE INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. THEY
ALSO DO NOT REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR
RESULTS WILL DIFFER.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all fees and charges under the contract, but do not reflect the charges for any
applicable taxes such as premium taxes, or any applicable annuity administrative
fee.
Tables 3, 4 and 5 show the rates of return of the variable investment options on
an annualized, cumulative, and year-by-year basis. These tables take into
account all fees and charges under the contract, but do not reflect the annual
administrative charge and any withdrawal charge, or charges for any applicable
taxes such as premium taxes, or any applicable annuity administrative fee. If
the charges were reflected they would effectively reduce the rates of return
shown.
In all cases the results shown are based on the actual historical investment
experience of the Portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted the
results of the Portfolios to reflect the charges under the contracts that would
have applied had the investment options and/or contracts been available. Since
charges under the contracts vary, we have assumed, for each charge, the highest
that might apply which is 1.45% for mortality and expense risks and other
expenses.
Finally, the results shown for the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options for periods before
those options were operated as a unit investment trust reflect the results of
the separate accounts that preceded them. The "Since inception" figures for
these options are based on the date of inception of the preceding separate
accounts. We have adjusted these results to reflect the fee and expense
structure in effect for unit investment trust. See "The Reorganization" in the
SAI for additional information.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
charges such as the mortality and expense risks charge, administration charge,
or any withdrawal or optional benefit charge, under the contracts. Comparisons
with these benchmarks, therefore, may be of limited use. We include them because
they are widely known and may help you to understand the universe of securities
from which each Portfolio is likely to select its holdings. Benchmark data
reflect the reinvestment of dividend income. The benchmarks include:
<PAGE>
- --------------------------------------------------------------------------------
86 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Alliance Aggressive Stock: 50% Russell 2000 Small Stock Index
and 50% Standard & Poor's Mid-Cap Total Return Index.
Alliance Balanced: 50% Standard & Poor's 500 and 50% Lehman
Government/Corporate Bond Index.
Alliance Common Stock: Standard & Poor's 500 Index.
Alliance Conservative Investors: 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
Alliance Equity Index: Standard & Poor's 500 Index.
Alliance Global: Morgan Stanley Capital International World Index.
Alliance Growth & Income: 75% Standard & Poor's 500 Index
and 25% Value Line Convertibles Index.
Alliance Growth Investors: 30% Lehman Government/Corporate
Bond Index and 70% Standard & Poor's 500 Index.
Alliance High Yield: Merrill Lynch High Yield Master Index.
Alliance Intermediate Government Securities: Lehman
Intermediate Government Bond Index.
Alliance International: Morgan Stanley Capital International
Europe, Australia, Far East Index.
Alliance Money Market: Salomon Brothers Three-Month T-Bill
Index.
Alliance Quality Bond: Lehman Aggregate Bond Index.
Alliance Small Cap Growth: Russell 2000 Growth Index.
MFS Emerging Growth Companies: Russell 2000 Index.
MFS Research: Standard & Poor's 500 Index.
Merrill Lynch Basic Value Equity: Standard & Poor's 500 Index.
Merrill Lynch Strategy: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+ 14%
Salomon Brothers World Government Bond (excluding U.S.)/and
5% Three-Month U.S. Treasury Bill.
Morgan Stanley Emerging Markets Equity: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/Putnam Balanced: 60% Standard & Poor's 500 Index and 40%
Lehman Government/Corporate Bond Index.
EQ/Putnam Growth & Income Value: Standard & Poor's 500
Index.
T. Rowe Price Equity Income: Standard & Poor's 500 Index.
T. Rowe Price International Stock: Morgan Stanley Capital
International Europe, Australia, Far East Index.
Warburg Pincus Small Company Value: Russell 2000 Index.
- --------------------------------------------------------------------------------
Lipper Survey. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc., the data are presented net of
investment management fees, direct operating expenses and asset-based charges
applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the EQUI-VEST performance relative to other
variable annuity products.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 87
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
- -------------------------------------------------------------------------------------
Length of investment period
----------------------------------
1 3 5
Variable Investment Options Year Years years
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock (8.37)% 5.17% 6.68%
- -------------------------------------------------------------------------------------
Alliance Balanced 8.07% 9.08% 5.96%
- -------------------------------------------------------------------------------------
Alliance Common Stock 18.31% 21.76% 17.26%
- -------------------------------------------------------------------------------------
Alliance Conservative Investors 4.04% 5.07% 4.60%
- -------------------------------------------------------------------------------------
Alliance Equity Index 17.14% 21.81% -
- -------------------------------------------------------------------------------------
Alliance Global 11.41% 10.01% 9.42%
- -------------------------------------------------------------------------------------
Alliance Growth & Income 10.55% 16.64% 13.10%
- -------------------------------------------------------------------------------------
Alliance Growth Investors 8.18% 10.23% 9.04%
- -------------------------------------------------------------------------------------
Alliance High Yield (13.34)% 5.69% 5.17%
- -------------------------------------------------------------------------------------
Alliance Intermediate Government Securities (1.56)% 0.74% 0.66%
- -------------------------------------------------------------------------------------
Alliance International 1.02% 0.10% -
- -------------------------------------------------------------------------------------
Alliance Money Market (3.76)% (0.11)% 0.45%
- -------------------------------------------------------------------------------------
Alliance Quality Bond (0.70)% 2.15% 2.04%
- -------------------------------------------------------------------------------------
Alliance Small Cap Growth (12.54)% - -
- -------------------------------------------------------------------------------------
MFS Emerging Growth Companies 23.04% - -
- -------------------------------------------------------------------------------------
MFS Research 13.51% - -
- -------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity (0.04)% - -
- -------------------------------------------------------------------------------------
Merrill Lynch World Strategy (2.40)%
- -------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity (33.32)% - -
- -------------------------------------------------------------------------------------
E/Q Putnam Balanced 2.16% - -
- -------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value 3.08% - -
- -------------------------------------------------------------------------------------
T. Rowe Price Equity Income (0.35)% - -
- -------------------------------------------------------------------------------------
T. Rowe Price International Stock 3.88% - -
- -------------------------------------------------------------------------------------
Warburg Pincus Small Company Value (17.78)% - -
- -------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Length of investment period
--------------------------------------------------
Since Since Portfolio
10 option portfolio inception
Variable Investment Options Years inception* inception date
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock 15.83% - - 5/1/84
- ---------------------------------------------------------------------------------------------------
Alliance Balanced 8.81% - - 5/1/84
- ---------------------------------------------------------------------------------------------------
Alliance Common Stock 14.96% - - 8/1/68
- ---------------------------------------------------------------------------------------------------
Alliance Conservative Investors - 4.69% 6.09% 10/2/89
- ---------------------------------------------------------------------------------------------------
Alliance Equity Index - 21.38% 19.74% 3/1/94
- ---------------------------------------------------------------------------------------------------
Alliance Global 11.11% - - 8/27/87
- ---------------------------------------------------------------------------------------------------
Alliance Growth & Income - 13.20% 12.14% 10/1/93
- ---------------------------------------------------------------------------------------------------
Alliance Growth Investors - 9.22% 9.16% 10/2/89
- ---------------------------------------------------------------------------------------------------
Alliance High Yield 7.41% - - 1/2/87
- ---------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities - 1.84% 2.93% 4/1/91
- ---------------------------------------------------------------------------------------------------
Alliance International - 1.10% 1.32% 4/3/95
- ---------------------------------------------------------------------------------------------------
Alliance Money Market 1.80% - - 5/11/82
- ---------------------------------------------------------------------------------------------------
Alliance Quality Bond - 2.09% 1.66% 10/1/93
- ---------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - (1.33)% 4.97% 5/1/97
- ---------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - 21.32% 26.35% 5/1/97
- ---------------------------------------------------------------------------------------------------
MFS Research - 12.93% 16.37% 5/1/97
- ---------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity - 4.28% 8.62% 5/1/97
- ---------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy (3.07)% (0.09)% 5/1/97
- ---------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - (37.56)% (37.51)% 8/20/97
- ---------------------------------------------------------------------------------------------------
E/Q Putnam Balanced - 6.57% 8.44% 5/1/97
- ---------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value - 7.30% 10.01% 5/1/97
- ---------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - 8.55% 11.06% 5/1/97
- ---------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - (2.17)% (0.02)% 5/1/97
- ---------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value - (6.50)% (2.60)% 5/1/97
- ---------------------------------------------------------------------------------------------------
</TABLE>
* Option inception dates are: Alliance Aggressive Stock (5/1/84), Alliance
Balanced (5/1/84), Alliance Common Stock (8/27/81), Alliance Conservative
Investors (1/4/94), Alliance Equity Index (6/1/94), Alliance Global
(1/4/94), Alliance Growth & Income (1/4/94), Alliance Growth Investors
(1/4/94), Alliance High Yield (1/4/94), Alliance Intermediate Government
Securities (6/1/94), Alliance International (9/1/95), Alliance Money
Market (5/11/82), Alliance Quality Bond (1/4/94), Alliance Small Cap
Growth (6/2/97), MFS Emerging Growth Companies (6/2/97), MFS Research
(6/2/97), Merrill Lynch Basic Value Equity (6/2/97), Merrill Lynch World
Strategy (6/2/97), Morgan Stanley Emerging Markets Equity (8/20/97),
EQ/Putnam Balanced (6/2/97), EQ/Putnam Growth & Income Value (6/2/97), T.
Rowe Price Equity Income (6/2/97), T. Rowe Price International Stock
(6/2/97), Warburg Pincus Small Company Value (6/2/97).
<PAGE>
- --------------------------------------------------------------------------------
88 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------
Length of Investment Period
--------------------------------------------------------------------
Since
1 3 5 10 portfolio
Variable Investment Options Year years Years years inception*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock $ 916.26 $1,163.21 $1,381.52 $4,347.57 -
- ----------------------------------------------------------------------------------------------------------------------
Alliance Balanced $1,080.72 $1,297.77 $1,335.75 $2,326.22 -
- ----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $1,183.15 $1,805.17 $2,217.34 $4,031.95 -
- ----------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $1,040.45 $1,159.86 $1,252.10 - $1,727.45
- ----------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $1,171.42 $1,807.49 - - $2,390.38
- ----------------------------------------------------------------------------------------------------------------------
Alliance Global $1,114.06 $1,331.21 $1,568.49 $2,868.34 -
- ----------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income $1,105.50 $1,586.70 $1,850.98 - $1,825.29
- ----------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $1,081.83 $1,339.33 $1,541.49 - $2,947.24
- ----------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 866.58 $1,180.55 $1,286.90 $2,044.10 -
- ----------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 984.41 $1,022.25 $1,033.41 - $1,251.19
- ----------------------------------------------------------------------------------------------------------------------
Alliance International $1,010.19 $1,003.00 - - $1,083.76
- ----------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 962.41 $ 996.69 $1,022.63 $1,195.40 -
- ----------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $ 993.00 $1,065.78 $1,106.28 - $1,090.26
- ----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 874.57 - - - $1,084.35
- ----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $1,230.38 - - - $1,477.97
- ----------------------------------------------------------------------------------------------------------------------
MFS Research $1,135.14 - - - $1,288.14
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $ 999.57 - - - $1,148.15
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $ 975.98 - - - $ 998.55
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 666.76 - - - $ 525.40
- ----------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced $1,021.57 - - - $1,144.83
- ----------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value $1,030.77 - - - $1,172.64
- ----------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $ 996.54 - - - $1,191.39
- ----------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $1,038.79 - - - $ 999.69
- ----------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 822.21 - - - $ 957.02
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolios inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 89
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------
Since
portfolio
1 year 3 years 5 years 10 years 20 years inception*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (1.17)% 9.13% 9.83% 17.17% - 15.91%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 16.33% 14.87% 15.44% - 13.95%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 17.77% 15.56% 16.49% - 15.78%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 6.40% 13.23% 9.20% 10.96% - 10.71%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 15.79% 13.84% 12.97% - 13.56%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 18.70% 16.88% 15.21% - 15.37%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.51% 25.75% 20.15% 16.96% 17.08% 11.96%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 22.23% 18.63% 16.72% 16.30% 11.34%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% 24.06% 19.21% 17.76% 12.75%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.23% 9.09% 7.80% - - 8.40%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 15.62% 14.31% - - 12.55%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 14.45% 13.37% - - 12.08%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.22% 25.75% - - - 22.53%
- ----------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 27.67% - - - 24.31%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% - - - 24.79%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.03% 14.22% 12.59% 13.14% - 10.92%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 14.67% 11.98% 11.21% - 9.64%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 17.77% 15.68% 10.66% - 9.55%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.11% 20.75% 16.10% - - 15.15%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 21.25% 18.35% - - 17.89%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 23.99% 21.07% - - 20.48%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.51% 14.16% 12.08% - - 14.31%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 15.62% 14.31% - - 12.55%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 22.69% 19.96% - - 15.55%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.53)% 9.74% 8.39% 9.55% - 8.89%
- ----------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 8.21% 7.37% 9.34% - 8.97%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 9.11% 9.01% 11.08% - 10.72%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES 6.18% 4.71% 3.86% - - 5.54%
- ----------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 6.21% 5.91% - - 7.25%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 6.74% 6.45% - - 7.60%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 8.96% 4.05% - - - 5.77%
- ----------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 9.94% - - - 10.74%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 9.00% - - - 9.68%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.81% 3.83% 3.64% 4.07% - 5.24%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 4.87% 4.77% 5.20% - 6.34%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 5.18% 5.11% 5.44% 6.41%
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND 7.11% 6.15% 5.23% - - 4.80%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 6.38% 6.54% - - 6.21%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 7.29% 7.27% - - 6.92%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
90 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------
Since
portfolio
1 year 3 years 5 years 10 years 20 years inception*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.66)% - - - - 10.63%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% - - - - 16.72%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% - - - - 16.58%
- ----------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.57% - - - - 32.93%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% - - - - 22.72%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 14.53%
- ----------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.31% - - - - 22.66%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% - - - - 28.73%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ----------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 7.82% - - - - 14.29%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 21.32%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ----------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.27% - - - - 5.40%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% - - - - 11.15%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% - - - - 20.00%
- ----------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY (28.08)% - - - - (33.65)%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% - - - - (36.28)%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% - - - - (28.92)%
- ----------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.19% - - - - 14.28%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% - - - - 17.83%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% - - - - 23.48%
- ----------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.19% - - - - 15.94%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 21.32%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ----------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.49% - - - - 17.04%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% - - - - 19.07%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ----------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 2.05% - - - - 5.47%
- ----------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% - - - - 9.06%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% - - - - 13.43%
- ----------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (11.31)% - - - - 2.75%
- ----------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% - - - - 16.77%
- ----------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 14.53%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolios inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 91
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------
Since
1 year 3 years 5 years 10 years 20 years inception*
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (1.17)% 29.96% 59.83% 387.81% - 772.65%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 58.64% 102.73% 334.88% - 613.05%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 63.35% 106.12% 360.30% - 759.55%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.40% 45.16% 55.30% 183.04% - 344.57%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 55.60% 91.92% 240.69% - 553.21%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 67.24% 118.08% 311.86% - 715.64%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.51% 98.85% 150.34% 378.95% 2,242.69% 3,003.56%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 84.52% 138.97% 388.00% 2,185.68% 1,208.81%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% 193.91% 479.62% 2,530.43% 3,755.68%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.23% 29.83% 45.61% - - 110.82%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 55.28% 97.15% - - 202.48%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 49.92% 87.28% - - 187.40%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.22% 98.86% - - - 167.12%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 108.12% - - - 186.34%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% - - - 192.17%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.03% 49.01% 80.96% 243.69% - 224.10%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 51.58% 77.94% 194.96% - 188.08%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 63.34% 107.19% 175.31% - 181.57%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.11% 76.07% 110.97% - - 109.67%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 79.05% 133.95% - - 139.10%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 90.62% 160.09% - - 166.00%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.51% 48.79% 76.88% - - 244.44%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 55.28% 97.15% - - 202.45%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 84.68% 148.41% - - 280.88%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.53)% 32.15% 49.63% 148.97% - 177.76%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 26.80% 43.00% 145.62% - 182.21%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 29.90% 53.96% 186.01% - 239.69%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 6.18% 14.81% 20.85% - - 51.92%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 19.84% 33.36% - - 72.35%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 21.61% 36.71% - - 76.55%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 8.96% 12.65% - - - 23.37%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 33.62% - - - 47.74%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 29.52% - - - 41.40%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.81% 11.94% 19.59% 49.04% - 133.76%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Money Marke 4.84% 15.34% 26.25% 66.09% - 178.83%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 16.35% 28.27% 69.88% - 181.74%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
92 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------------------------------------------
Since
1 year 3 years 5 years 10 years 20 years inception*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE QUALITY BOND 7.11% 19.61% 29.02% - - 27.90%
- -------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 20.42% 37.37% - - 37.26%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 23.51% 42.06% - - 42.14%
- -------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.66)% - - - - 18.35%
- -------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% - - - - 28.98%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% - - - - 29.23%
- -------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.57% - - - - 60.74%
- -------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% - - - - 42.16%
- -------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 25.40%
- -------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.31% - - - - 40.56%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% - - - - 52.86%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- -------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 7.82% - - - - 24.95%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 15.59%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- -------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.27% - - - - 9.17%
- -------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% - - - - 19.41%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% - - - - 33.33%
- -------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY (28.08)% - - - - (42.91)%
- -------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% - - - - (45.67)%
- -------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% - - - - (36.71)%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.19% - - - - 24.93%
- -------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% - - - - 31.59%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% - - - - 42.22%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.19% - - - - 27.96%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 38.49%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- -------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.49% - - - - 30.01%
- -------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% - - - - 33.92%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- -------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.05% - - - - 9.29%
- -------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% - - - - 15.88%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% - - - - 23.42%
- -------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (11.31)% - - - - 4.63%
- -------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% - - - - 29.95%
- -------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 25.40%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolios inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 93
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 5
YEAR-BY-YEAR RATES OF RETURN
- ------------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock 42.73% 5.62% 84.38% (4.57)% 15.06%
- ------------------------------------------------------------------------------------------------------------
Alliance Balanced 24.60% (1.46)% 40.02% (4.25)% 10.68%
- ------------------------------------------------------------------------------------------------------------
Alliance Common Stock 24.07% (9.27)% 35.81% 1.72% 23.02%
- ------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 2.72%+ 4.86% 18.11% 4.26% 9.16%
- ------------------------------------------------------------------------------------------------------------
Alliance Equity Index - - - - -
- ------------------------------------------------------------------------------------------------------------
Alliance Global 24.90% (7.42)% 28.66% (1.96)% 30.21%
- ------------------------------------------------------------------------------------------------------------
Alliance Growth & Income - - - - (0.62)%+
- ------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 3.62%+ 9.01% 46.75% 3.41% 13.59%
- ------------------------------------------------------------------------------------------------------------
Alliance High Yield 3.61% (2.53)% 22.66% 10.68% 21.36%
- ------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities - - 10.85%+ 4.06% 8.98%
- ------------------------------------------------------------------------------------------------------------
Alliance International - - - - -
- ------------------------------------------------------------------------------------------------------------
Alliance Money Market 7.67% 6.78% 4.67% 2.06% 1.47%
- ------------------------------------------------------------------------------------------------------------
Alliance Quality Bond - - - - (0.87)%
- ------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - - -
- ------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - - -
- ------------------------------------------------------------------------------------------------------------
MFS Research - - - - -
- ------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity - - - - -
- ------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy - - - - -
- ------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity - - - - -
- ------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced - - - - -
- ------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value - - - - -
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - - -
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - - -
- ------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value - - - - -
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock (5.21)% 29.73% 20.42% 9.20% (1.17)%
- ------------------------------------------------------------------------------------------------------------
Alliance Balanced (9.35)% 18.02% 10.05% 13.33% 16.40%
- ------------------------------------------------------------------------------------------------------------
Alliance Common Stock (3.56)% 30.54% 22.46% 27.34% 27.51%
- ------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors (5.49)% 18.66% 3.67% 11.59% 12.23%
- ------------------------------------------------------------------------------------------------------------
Alliance Equity Index (0.14)%+ 34.51% 20.60% 30.65% 26.22%
- ------------------------------------------------------------------------------------------------------------
Alliance Global 3.71% 17.10% 12.93% 9.93% 20.03%
- ------------------------------------------------------------------------------------------------------------
Alliance Growth & Income (2.01)% 22.28% 18.34% 24.92% 19.11%
- ------------------------------------------------------------------------------------------------------------
Alliance Growth Investors (4.55)% 24.54% 10.96% 15.08% 16.51%
- ------------------------------------------------------------------------------------------------------------
Alliance High Yield (4.19)% 18.18% 21.09% 16.75% (6.53)%
- ------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (5.76)% 11.69% 2.26% 5.74% 6.18%
- ------------------------------------------------------------------------------------------------------------
Alliance International - 9.51%+ 8.21% (4.46)% 8.96%
- ------------------------------------------------------------------------------------------------------------
Alliance Money Market 2.51% 4.22% 3.79% 3.89% 3.81%
- ------------------------------------------------------------------------------------------------------------
Alliance Quality Bond (6.47)% 15.33% 3.82% 7.56% 7.11%
- ------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - 25.46%+ (5.66)%
- ------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - 21.25%+ 32.57%
- ------------------------------------------------------------------------------------------------------------
MFS Research - - - 14.93%+ 22.31%
- ------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity - - - 15.89%+ 7.82%
- ------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy - - - 3.70%+ 5.27%
- ------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity - - - (20.62)%+ (28.08)%
- ------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced - - - 13.37%+ 10.19%
- ------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value - - - 15.09%+ 11.19%
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - 20.95%+ 7.49%
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - (2.46)%+ 12.05%
- ------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value - - - 17.97%+ (11.31)%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ Return for these Portfolios represent less than 12 months of performance. The
returns are as of each Portfolio's inception date as shown in Table 1
<PAGE>
- --------------------------------------------------------------------------------
94 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options, and the Portfolios and may compare the performance
or ranking of those options and the Portfolios with:
o those 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;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
Portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------
Barron's Money Management Letter
- --------------------------------- --------------------------
Morningstar's Variable Annuity Investment Dealers Digest
- --------------------------------------------------------------
Sourcebook National Underwriter
- --------------------------------------------------------------
Business Week Pension & Investments
- --------------------------------------------------------------
Forbes USA Today
- --------------------------------------------------------------
Fortune Investor's Business Daily
- --------------------------------------------------------------
Institutional Investor The New York Times
- --------------------------------------------------------------
Money The Wall Street Journal
- --------------------------------------------------------------
Kiplinger's Personal Finance The Los Angeles Time
- --------------------------------------------------------------
Financial Planning The Chicago Tribune
- --------------------------------------------------------------
Investment Adviser
- --------------------------------------------------------------
Investment Management Weekly
- --------------------------------------------------------------
Lipper Analytical Services, Inc. (Lipper) compiles performance data for peer
universes of funds with similar investment objectives in its Lipper Survey.
Morningstar, Inc. compiles similar data in the Morningstar Variable Annuity/Life
Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable insurance and annuity contracts; and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). Current yield for the other options will be based
on net changes in a hypothetical investment over a given 30-day period,
exclusive of capital changes, and then "annualized" (assuming that the same
30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option. The yields and effective
yields assume the deduction of all
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 95
- --------------------------------------------------------------------------------
contract charges and expenses other than the annual administrative charge,
withdrawal charge, and any charge for taxes such as premium tax. For more
information, see "Alliance Money Market Option and other Yield information" in
the SAI.
<PAGE>
- --------------------------------------------------------------------------------
96 Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
10
Incorporation of certain documents by reference
Equitable Life's annual report on Form 10-K for the year ended December
31, 1998 and a current report on Form 8-K dated April 9, 1999, are considered to
be a part of this prospectus because they are incorporated by reference.
After the date of this prospectus and before we terminate the offering of
the securities under this prospectus, all documents or reports we file with the
SEC under the Securities Exchange Act of 1934 ("Exchange Act") will be
considered to become part of this prospectus because they are incorporated by
reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation, will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a website that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each
person to whom this prospectus is delivered a copy of any or all of the
documents considered to be part of this prospectus because they are incorporated
herein. This does not include exhibits not specifically incorporated by
reference into the text of such documents. Requests for documents should be
directed to The Equitable Life Assurance Society of the United States, 1290
Avenue of the Americas, New York, New York 10104. Attention: Corporate Secretary
(telephone: (212) 554-1234).
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX I: ORIGINAL CONTRACTS A-1
- --------------------------------------------------------------------------------
Appendix I: Original contracts
Original Contracts are EQUI-VEST contracts under which the contract owner has
not elected to add Alliance Intermediate Government Securities, Alliance Quality
Bond, Alliance High Yield, Alliance Growth and Income, Alliance Equity Index,
Alliance Global, Alliance International, Alliance Small Cap Growth, Alliance
Conservative Investors, Alliance Growth Investors options and any of the EQ
Advisors Trust variable investment options as investment options.
SELECTING YOUR INVESTMENT METHOD. If you own an original contract, only the
guaranteed interest option and the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options are available. In
most cases, you may request that we add additional variable investment options
to your original contract. We reserve the right to deny your request.
TRANSFERRING YOUR ACCOUNT VALUE. If you own an original contract, including
original contract owners who elect to amend their contract by selecting maximum
transfer flexibility, the Alliance Money Market option is always available.
However, we will not permit transfers into the Alliance Money Market option from
any other investment option. There will not be any other transfer limitations
under your original contract.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-1
- --------------------------------------------------------------------------------
The following tables show the accumulation unit values and the number of
outstanding units for each variable investment option under each contract series
at the last business day of the periods shown. The information presented is
shown for the past ten years, or from the first year the particular contracts
were offered if less than ten years ago.
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
December 31,
-----------------------------------------------------------------
1994 1995 1996 1997 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THE HUDSON RIVER TRUST
OPTIONS
- ---------------------------------------------------------------------------------------------------------------
Alliance Aggressive Stock
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 95.45 $123.95 $149.41 $163.33 $161.59
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 664 1,310 2,468 3,226 3,342
- ---------------------------------------------------------------------------------------------------------------
Alliance Balanced
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 91.64 $108.26 $119.26 $135.29 $157.63
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 289 386 548 655 752
- ---------------------------------------------------------------------------------------------------------------
Alliance Common Stock
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 97.03 $126.78 $155.42 $198.12 $252.88
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 948 1,989 3,457 4,765 5,808
- ---------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 95.10 $112.97 $117.25 $130.98 $147.17
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 325 491 567 553 661
- ---------------------------------------------------------------------------------------------------------------
Alliance Equity Index
- ---------------------------------------------------------------------------------------------------------------
Unit value $100.95 $135.94 $164.12 $214.66 $271.24
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 47 592 1,486 2,686 3,805
- ---------------------------------------------------------------------------------------------------------------
Alliance Global
- ---------------------------------------------------------------------------------------------------------------
Unit value $104.12 $122.06 $138.00 $151.87 $182.50
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,305 2,121 2,995 3,369 3,395
- ---------------------------------------------------------------------------------------------------------------
Alliance Growth & Income
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 98.86 $121.02 $143.37 $179.30 $213.81
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 210 498 975 1,800 2,475
- ---------------------------------------------------------------------------------------------------------------
Alliance Growth Investors
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 96.31 $120.08 $133.40 $153.69 $180.63
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,023 2,113 3,325 3,704 3,962
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
B-2 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
December 31,
-------------------------------------------------------------------
1994 1995 1996 1997 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance High Yield
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 95.88 $113.44 $137.53 $160.74 $150.42
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 99 209 444 831 1,164
- ---------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 98.19 $109.80 $112.40 $118.98 $126.48
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 32 89 146 202 314
- ---------------------------------------------------------------------------------------------------------------
Alliance International
- ---------------------------------------------------------------------------------------------------------------
Unit value - $104.15 $112.83 $107.92 $117.72
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) - 141 763 968 971
- ---------------------------------------------------------------------------------------------------------------
Alliance Money Market
- ---------------------------------------------------------------------------------------------------------------
Unit value $102.61 $107.04 $111.21 $115.66 $120.19
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 63 81 165 146 262
- ---------------------------------------------------------------------------------------------------------------
Alliance Quality Bond
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 93.87 $108.38 $112.65 $121.30 $130.07
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 53 135 196 283 557
- ---------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth
- ---------------------------------------------------------------------------------------------------------------
Unit value - - - $125.55 $118.57
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) - - - 488 1,101
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-3
- --------------------------------------------------------------------------------
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- --------------------------------------------------------------------------------
December 31, December 31,
1997 1998
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- --------------------------------------------------------------------------------
MFS Emerging Growth Companies
- --------------------------------------------------------------------------------
Unit value $121.34 $161.04
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 256 1,090
- --------------------------------------------------------------------------------
MFS Research
- --------------------------------------------------------------------------------
Unit value $115.01 $140.83
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 236 720
- --------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity
- --------------------------------------------------------------------------------
Unit value $115.97 $127.67
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 145 444
- --------------------------------------------------------------------------------
Merrill Lynch World Strategy
- --------------------------------------------------------------------------------
Unit value $103.77 $109.37
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 52 84
- --------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity
- --------------------------------------------------------------------------------
Unit value $ 79.41 $ 57.18
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 109 217
- --------------------------------------------------------------------------------
EQ/Putnam Balanced
- --------------------------------------------------------------------------------
Unit value $113.46 $125.16
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 109 275
- --------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
- --------------------------------------------------------------------------------
Unit value $115.17 $128.20
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 250 581
- --------------------------------------------------------------------------------
T. Rowe Price Equity Income
- --------------------------------------------------------------------------------
Unit value $121.04 $130.25
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 475 1,070
- --------------------------------------------------------------------------------
T. Rowe Price International Stock
- --------------------------------------------------------------------------------
Unit value $ 97.61 $109.49
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 387 671
- --------------------------------------------------------------------------------
Warburg Pincus Small Company Value
- --------------------------------------------------------------------------------
Unit value $118.06 $104.82
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 577 859
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
B-4 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
SERIES 500 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
- --------------------------------------------------------------------------------
December 31,
1998
- --------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- --------------------------------------------------------------------------------
Alliance Aggressive Stock
- --------------------------------------------------------------------------------
Unit value $ 90.25
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- --------------------------------------------------------------------------------
Alliance Balanced
- --------------------------------------------------------------------------------
Unit value $102.39
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Alliance Common Stock
- --------------------------------------------------------------------------------
Unit value $102.87
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 5
- --------------------------------------------------------------------------------
Alliance Conservative Investors
- --------------------------------------------------------------------------------
Unit value $102.74
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Alliance Equity Index
- --------------------------------------------------------------------------------
Unit value $103.68
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 2
- --------------------------------------------------------------------------------
Alliance Global
- --------------------------------------------------------------------------------
Unit value $ 98.37
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Alliance Growth & Income
- --------------------------------------------------------------------------------
Unit value $102.73
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- --------------------------------------------------------------------------------
Alliance Growth Investors
- --------------------------------------------------------------------------------
Unit value $101.93
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- --------------------------------------------------------------------------------
Alliance High Yield
- --------------------------------------------------------------------------------
Unit value $ 89.20
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Alliance Intermediate Government Securities
- --------------------------------------------------------------------------------
Unit value $103.32
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-5
- --------------------------------------------------------------------------------
SERIES 500 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- --------------------------------------------------------------------------------
December 31,
1998
- --------------------------------------------------------------------------------
Alliance International
- --------------------------------------------------------------------------------
Unit value $ 93.00
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- --------------------------------------------------------------------------------
Alliance Money Market
- --------------------------------------------------------------------------------
Unit value $101.68
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Alliance Quality Bond
- --------------------------------------------------------------------------------
Unit value $103.62
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Alliance Small Cap Growth
- --------------------------------------------------------------------------------
Unit value $ 86.93
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- --------------------------------------------------------------------------------
MFS Emerging Growth Companies
- --------------------------------------------------------------------------------
Unit value $103.41
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- --------------------------------------------------------------------------------
MFS Research
- --------------------------------------------------------------------------------
Unit value $ 98.99
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- --------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity
- --------------------------------------------------------------------------------
Unit value $ 97.80
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Merrill Lynch World Strategy
- --------------------------------------------------------------------------------
Unit value $ 94.86
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity
- --------------------------------------------------------------------------------
Unit value $ 81.40
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
B-6 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
SERIES 500 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- --------------------------------------------------------------------------------
December 31,
1998
- --------------------------------------------------------------------------------
EQ/Putnam Balanced
- --------------------------------------------------------------------------------
Unit value $101.05
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
- --------------------------------------------------------------------------------
Unit value $100.48
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
T. Rowe Price Equity Income
- --------------------------------------------------------------------------------
Unit value $101.00
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
T. Rowe Price International Stock
- --------------------------------------------------------------------------------
Unit value $ 94.04
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
Warburg Pincus Small Company Value
- --------------------------------------------------------------------------------
Unit value $ 82.78
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-7
- --------------------------------------------------------------------------------
SERIES 100 AND 200 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
December 31,
- -------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THE HUDSON
RIVER TRUST
OPTIONS
- -------------------------------------------------------------------------------------
Alliance Aggressive
Stock
- -------------------------------------------------------------------------------------
Unit value $ 25.86 $ 27.36 $ 50.51 $ 48.30 $ 55.68
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) 8,134 9,545 12,962 17,986 21,496
- -------------------------------------------------------------------------------------
Alliance Balanced
- -------------------------------------------------------------------------------------
Unit value $ 19.69 $ 19.40 $ 27.17 $ 26.04 $ 28.85
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) 16,810 19,423 21,100 25,975 31,259
- -------------------------------------------------------------------------------------
Alliance Common
Stock
- -------------------------------------------------------------------------------------
Unit value $ 83.40 $ 75.67 $ 102.76 $ 104.63 $ 128.81
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) 8,645 9,670 10,292 11,841 13,917
- -------------------------------------------------------------------------------------
Alliance
Conservative
Investors
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance Equity Index
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance Global
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance Growth &
Income
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance Growth
Investors
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Unit value - - - - -
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
December 31,
- --------------------------------------------------------------------------------
1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------
THE HUDSON
RIVER TRUST
OPTIONS
- --------------------------------------------------------------------------------
Alliance Aggressive
Stock
- --------------------------------------------------------------------------------
Unit value $ 52.88 $ 68.73 $ 82.91 $ 90.75 $ 89.92
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 24,787 25,821 27,945 28,030 25,634
- --------------------------------------------------------------------------------
Alliance Balanced
- --------------------------------------------------------------------------------
Unit value $ 26.18 $ 30.92 $ 34.06 $ 38.66 $ 45.07
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 32,664 30,212 28,319 26,036 24,361
- --------------------------------------------------------------------------------
Alliance Common
Stock
- --------------------------------------------------------------------------------
Unit value $124.32 $162.42 $199.05 $253.68 $323.75
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 15,749 16,292 16,933 17,386 17,231
- --------------------------------------------------------------------------------
Alliance
Conservative
Investors
- --------------------------------------------------------------------------------
Unit value $ 95.10 $112.97 $117.25 $130.98 $147.17
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 325 491 567 553 661
- --------------------------------------------------------------------------------
Alliance Equity Index
- --------------------------------------------------------------------------------
Unit value $100.95 $135.94 $164.12 $214.66 $271.24
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 47 592 1,486 2,686 3,805
- --------------------------------------------------------------------------------
Alliance Global
- --------------------------------------------------------------------------------
Unit value $104.12 $122.06 $138.00 $151.87 $182.50
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 1,305 2,121 2,995 3,369 3,395
- --------------------------------------------------------------------------------
Alliance Growth &
Income
- --------------------------------------------------------------------------------
Unit value $ 98.86 $121.02 $143.37 $179.30 $213.81
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 210 498 975 1,800 2,475
- --------------------------------------------------------------------------------
Alliance Growth
Investors
- --------------------------------------------------------------------------------
Unit value $ 96.31 $120.08 $133.40 $153.69 $180.63
- --------------------------------------------------------------------------------
Number of units
outstanding (000's) 1,023 2,113 3,325 3,704 3,962
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
B-8 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
SERIES 100 AND 200 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
December 31,
- -------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance High Yield
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance
Intermediate
Government
Securities
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance
International
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance Money
Market
- -------------------------------------------------------------------------------------
Unit value $21.89 $23.38 $24.48 $25.01 $25.41
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) 1,045 1,307 1,325 1,201 1,065
- -------------------------------------------------------------------------------------
Alliance Quality
Bond
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
Alliance Small Cap
Growth
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
EQ Advisors Trust
Options
- -------------------------------------------------------------------------------------
MFS Emerging
Growth
Companies
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
MFS Research
- -------------------------------------------------------------------------------------
Unit value - - - - -
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - -
- -------------------------------------------------------------------------------------
<CAPTION>
December 31,
- -------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance High Yield
Unit value $95.88 $113.44 $137.53 $160.74 $150.42
- -------------------------------------------------------------------------------------
Number of units
- -------------------------------------------------------------------------------------
outstanding (000's) 99 209 444 831 1,164
- -------------------------------------------------------------------------------------
Alliance
Intermediate
Government
Securities
- -------------------------------------------------------------------------------------
Unit value $98.19 $109.80 $112.40 $118.98 $126.48
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) 32 89 146 202 314
- -------------------------------------------------------------------------------------
Alliance
International
- -------------------------------------------------------------------------------------
Unit value - 104.15 112.83 $107.92 $117.72
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - 141 763 968 971
- -------------------------------------------------------------------------------------
Alliance Money
Market
- -------------------------------------------------------------------------------------
Unit value $26.08 $ 27.22 $ 28.28 $ 29.41 $ 30.55
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) 1,000 1,021 1,013 973 1,261
- -------------------------------------------------------------------------------------
Alliance Quality
Bond
- -------------------------------------------------------------------------------------
Unit value $93.87 $108.38 $112.65 $121.30 $130.07
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) 53 135 196 283 557
- -------------------------------------------------------------------------------------
Alliance Small Cap
Growth
- -------------------------------------------------------------------------------------
Unit value - - - $125.55 $118.57
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - 488 1,101
- -------------------------------------------------------------------------------------
EQ Advisors Trust
Options
- -------------------------------------------------------------------------------------
MFS Emerging
Growth
Companies
- -------------------------------------------------------------------------------------
Unit value - - - $161.04 $121.34
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - 1,090 256
- -------------------------------------------------------------------------------------
MFS Research
- -------------------------------------------------------------------------------------
Unit value - - - $140.83 $115.01
- -------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - 720 236
- -------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-9
- --------------------------------------------------------------------------------
SERIES 100 AND 200 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
December 31,
- ------------------------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Basic
Value Equity
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $127.67 $115.97
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 444 145
- ------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World
Strategy
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $109.37 $103.77
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 84 52
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Emerging Market
Equity
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $ 57.18 $ 79.41
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 217 109
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $125.16 $113.46
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 275 109
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth &
Income Value
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $115.17 $128.20
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 250 581
- ------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity
Income
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $121.04 $130.25
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 475 1,070
- ------------------------------------------------------------------------------------------------------------------------
T. Rowe Price
International
Stock
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $109.49 $ 97.61
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 671 387
- ------------------------------------------------------------------------------------------------------------------------
Warburg Pincus
Small Company
Value
- ------------------------------------------------------------------------------------------------------------------------
Unit value - - - - - - - - $104.82 $118.06
- ------------------------------------------------------------------------------------------------------------------------
Number of units
outstanding (000's) - - - - - - - - 859 577
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX III: MARKET VALUE ADJUSTMENT EXAMPLE C-1
- --------------------------------------------------------------------------------
Appendix III: Market value adjustment example
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 had been
invested on June 14, 1999 to a fixed maturity option with a maturity date of
June 15, 2008 (i.e., nine years later) at a rate to maturity of 7.00%, resulting
in a maturity value at the maturity date of $183,846. We further assume that a
withdrawal of $50,000 is made four years later, on June 15, 2003.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Assumed Rate to maturity on June 15, 2003
-------------------------------------------------
5.00% 9.00%
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
As of June 15, 2003 (before withdrawal)
- ------------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $119,487
- ------------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $131,080
- ------------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $(11,593)
- ------------------------------------------------------------------------------------------------------
On June 15, 2003 (after withdrawal)
- ------------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- ------------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount
[$50,000 - (4)] $ 45,499 $ 54,851
- ------------------------------------------------------------------------------------------------------
(6) Fixed maturity amount (2) - (5) $ 85,581 $ 76,229
- ------------------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $106,915
- ------------------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ------------------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a negative market value
adjustment is realized. On the other hand, if a withdrawal is made when rates
have decreased from 7.00% to 5.00% (left column), a positive market value
adjustment is realized.
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Statement of additional information
TABLE OF CONTENTS
Page
Required Minimum Distributions Option 2
Accumulation Unit Values 2
Calculation of Annuity Payments 2
The Reorganization 4
Custodian and Independent Accountants 4
Alliance Money Market Option Yield Information 4
Other Yield Information 5
Key Factors in Retirement Planning 5
Long-Term Market Trends 9
Financial Statements 11
How to Obtain an EQUI-VEST Statement of Additional Information for Separate
Account A
Call 1-800-628-6673 or send this request form to:
EQUI-VEST
Processing Office
The Equitable Life
P.O. Box 2996
New York, NY 10116-2996
- --------------------------------------------------------------------------------
Please send me an EQUI-VEST Statement of Additional Information dated May 3,
1999.
(Combination variable and fixed deferred annuity)
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
888-1175
<PAGE>
EQUI-VEST(Reg. TM)
Employer-Sponsored Retirement Programs
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing, or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectuses for The Hudson River Trust and EQ Advisors Trust which contain
important information about their Portfolios.
PROSPECTUS DATED MAY 3, 1999
- --------------------------------------------------------------------------------
What is EQUI-VEST? EQUI-VEST is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract also offers
death benefit protection and a number of payout options. You invest to
accumulate value on a tax-deferred basis in one or more of our variable
investment options and our guaranteed interest option ("investment options").
- ----------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- ----------------------------------------------------------------------------
FIXED INCOME OPTIONS:
- ----------------------------------------------------------------------------
DOMESTIC FIXED INCOME AGGRESSIVE FIXED INCOME
- ----------------------------------------------------------------------------
o Alliance Money Market o Alliance High Yield
o Alliance Intermediate
Government Securities
o Alliance Quality Bond
- ----------------------------------------------------------------------------
EQUITY OPTIONS:
- ----------------------------------------------------------------------------
DOMESTIC EQUITY INTERNATIONAL EQUITY
- ----------------------------------------------------------------------------
o T. Rowe Price Equity Income o Alliance Global
o EQ/Putnam Growth & Income o Alliance International
Value o T. Rowe Price International
o Alliance Growth & Income Stock
o Alliance Equity Index o Morgan Stanley Emerging
o Merrill Lynch Basic Value Equity Markets Equity
o Alliance Common Stock
o MFS Research
- ----------------------------------------------------------------------------
AGGRESSIVE EQUITY
- ----------------------------------------------------------------------------
o Alliance Aggressive Stock o Alliance Small Cap Growth
o Warburg Pincus Small o MFS Emerging Growth
Company Value Companies
- ----------------------------------------------------------------------------
ASSET ALLOCATION OPTIONS:
- ----------------------------------------------------------------------------
o Alliance Conservative Investors o Alliance Growth Investors
o EQ/Putnam Balanced o Merrill Lynch World Strategy
o Alliance Balanced
You may allocate amounts to any of the variable investment options. They, in
turn, invest in a corresponding securities portfolio ("Portfolio") of The Hudson
River Trust or EQ Advisors Trust. Your investment results in a variable
investment option will depend on the investment performance of the related
Portfolio. Each variable investment option is a subaccount of our Separate
Account A.
GUARANTEED INTEREST OPTION. You may allocate amounts to the guaranteed interest
option. This option is part of our general account and pays interest at
guaranteed rates.
TYPES OF CONTRACTS. We offer different "series" of contracts for use as:
Employer funded traditional IRAs:
o A simplified employee pension plan ("SEP") sponsored by an employer.
o SEPs funded by salary reduction arrangements ("SARSEPs") for plans
established by employers before January 1, 1997. Although we still issue
these contracts to employees whose employer's plans enrolled on this basis,
plans of this type are no longer available under EQUI-VEST to new employer
groups without existing plans.
o SIMPLE IRAs funded by employee salary reduction and employer contributions.
Other employer-sponsored contracts:
o Trusteed contracts to fund defined contribution "HR-10" or "Keogh" plans of
employers who are sole proprietorships, partnerships, or business trusts, or
plans of corporations.
o An Internal Revenue Code Section 403(b) Tax Sheltered Annuity (basic "TSA")
for public schools and nonprofit entities under Internal Revenue Code
Section 501(c)(3).
o A TSA annuity issued to participants of TSA plans generally sponsored by
universities, ("University TSA") that prohibits loans and has restrictions
not included in a basic TSA.
o To fund Internal Revenue Code Section 457 employee deferred compensation
("EDC") plans of state and municipal governments and other tax-exempt
organizations.
o Annuitant-Owned contracts to fund defined contribution HR-10 or Keogh plans.
Minimum contribution amounts of $20 may be made under the contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 3, 1999, is a part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
Processing Office or calling 1 (800) 628-6673. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be obtained
from the SEC's website at http://www.sec.gov. The table of contents for the SAI
appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
- --------------------------------------------------------------------------------
2 CONTENTS OF THIS PROSPECTUS
- --------------------------------------------------------------------------------
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUI-VEST(Reg. TM)
- ---------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 6
How to reach us 7
EQUI-VEST employer-sponsored retirement programs
at a glance -- key features 10
- --------------------------------------------------------------
FEE TABLE 13
- --------------------------------------------------------------
EQUI-VEST series 300 and 400 13
EQUI-VEST series 200 contracts 19
EQUI-VEST series 100 contracts 26
Condensed financial information 31
- --------------------------------------------------------------
- --------------------------------------------------------------
1
CONTRACT FEATURES AND BENEFITS 32
- --------------------------------------------------------------
How you can purchase and contribute to your contract 32
Owner and annuitant requirements 33
How you can make your contributions 33
What are your investment options under the contract? 34
Selecting your investment method 36
ERISA considerations for employers 37
Allocating your contributions 37
Your right to cancel within a certain number of days 37
- --------------------------------------------------------------
2
DETERMINING YOUR CONTRACT'S VALUE 39
- --------------------------------------------------------------
Your account value 39
Your contract's value in the variable
investment options 39
Your contract's value in the guaranteed interest option 39
- --------------------------------------------------------------------------------
"We," "our" and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
<PAGE>
- --------------------------------------------------------------------------------
CONTENTS OF THIS PROSPECTUS 3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------------------------
3
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 40
- -------------------------------------------------------------
Transferring your account value 40
Automatic transfer options investment simplifier 40
Rebalancing your account value 41
- -------------------------------------------------------------
4
ACCESSING YOUR MONEY 42
- -------------------------------------------------------------
Withdrawing your account value 42
Loans under TSA and Corporate Trusteed contracts 43
When we may terminate your contract 44
Texas ORP participants 44
When to expect payments 44
Choosing your annuity payout options 45
- -------------------------------------------------------------
5
CHARGES AND EXPENSES 47
- -------------------------------------------------------------
Charges that Equitable Life deducts 47
Charges that the trusts deduct 53
Group or sponsored arrangements 53
Other distribution arrangements 54
- -------------------------------------------------------------
6
PAYMENT OF DEATH BENEFIT 55
- -------------------------------------------------------------
Your beneficiary and payment of benefit 55
How death benefit payment is made 55
- -------------------------------------------------------------
- -------------------------------------------------------------
7
TAX INFORMATION 56
- -------------------------------------------------------------
Tax information and ERISA matters 56
Special rules for tax-favored retirement programs 56
Qualified plans 56
Tax-sheltered annuity arrangements (TSAs) 57
Distributions from Qualified Plans and TSAs 59
Simplified Employee Pensions (SEPs) 61
SIMPLE IRAs (Savings Incentive Match Plan) 61
Public and tax-exempt organization employee
deferred compensation plans (EDC Plans) 63
Traditional Individual Retirement Annuities
(Traditional IRAs) 64
ERISA matters 72
Certain rules applicable to plans designed to comply
with Section 404(c) of ERISA 72
Federal and state income tax withholding and
information reporting 73
Impact of taxes to Equitable Life 74
- -------------------------------------------------------------
8
MORE INFORMATION 75
- -------------------------------------------------------------
About our Separate Account A 75
About The Hudson River Trust and EQ Advisors Trust 75
About the general account 76
About other methods of payment 76
Dates and prices at which contract events occur 77
About your voting rights 77
About our year 2000 progress 78
About legal proceedings 79
About our independent accountants 79
Transfers of ownership, collateral assignments, loans,
and borrowing 79
Funding changes 79
Distribution of the contracts 79
- -------------------------------------------------------------
9
INVESTMENT PERFORMANCE 81
- -------------------------------------------------------------
Benchmarks 81
Communicating performance data 91
- -------------------------------------------------------------
APPENDICES
- -------------------------------------------------------------
I - Original contracts A-1
II - Condensed financial information B-1
- -------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- -------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
4 INDEX OF KEY WORDS AND PHRASES
- --------------------------------------------------------------------------------
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account value 39
annuitant 37
annuity payout options 45
Annuitant-Owned HR-10 cover
beneficiary 55
business day 77
Code 32
cash value 39
contract date 11
contract date anniversary 11
contract year 11
contributions 32
DOL 56
EDC cover
elective deferral contributions 57
guaranteed interest option 36
IRA cover
IRS 33
PAGE
investment options 34
nonelective contribution 57
Portfolio cover
Processing Office 7
recharacterized 64
Required Beginning Date 70
SAI cover
SEC cover
Salary reduction contributions 57
SARSEP cover
SEP cover
SIMPLE IRA cover
TOPS 7
Trusteed contracts cover
TSA cover
unit 39
unit investment trust 75
variable investment options 34
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
do use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your Equitable associate can provide further
explanation about your contract.
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT ON SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
variable investment options Investment Funds or Investment Divisions
account value Annuity Account Value
guaranteed interest option Guaranteed Interest Account
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INDEX OF KEY WORDS AND PHRASES 5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In this prospectus, we use a "series" number when necessary to identify a
particular contract. We discuss four series of contracts. However, only three
are available for new purchasers. Once you have purchased a contract you can
identify the EQUI-VEST series you have by referring to your confirmation notice,
or you may contact your Equitable associate, or you may call our toll-free
number. The series designations are as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
o TSA, SEP, SARSEP, EDC, Annuitant-Owned HR-10 and Trusteed contracts series 100
issued before August 17, 1995.
This series is no longer
available for new
purchasers.
Information in this
prospectus is provided
for our existing series
100 contract owners
only.
- -----------------------------------------------------------------------------------------------------------------
o TSA, EDC, Annuitant-Owned HR-10 and Trusteed contracts issued on or series 200
after August 17, 1995. SEP and SARSEP contracts issued on or after
August 17, 1995 and before November 1, 1995 and currently in a state This series is available
where the series 300 contract has not been approved. for new purchasers of
TSA, EDC, Annuitant-
Owned HR-10 and
Trusteed contracts and
SEP contracts only in
Oregon, Maryland and
Washington.
- -----------------------------------------------------------------------------------------------------------------
o SEP contracts issued on or after November 1, 1995 in states which have series 300
approved the Series 300 contract.
- -----------------------------------------------------------------------------------------------------------------
o SIMPLE IRA contracts in all approved states. (We reserve the right to issue a series 400
series 200 or 300 SIMPLE IRA contract, as necessary, for states not
approving the series 400 version.)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
We also have contracts that we refer to as "original contracts." These contracts
are no longer available for new purchasers. Any information about original
contracts which is different from the current series we offer can be found in
Appendix I, which will be referenced throughout this prospectus when it applies.
<PAGE>
- --------------------------------------------------------------------------------
6 WHO IS EQUITABLE LIFE?
- --------------------------------------------------------------------------------
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a wholly owned subsidiary of The Equitable
Companies Incorporated ("Equitable Companies"), whose majority shareholder is
AXA, a French holding company for an international group of insurance and
related financial services companies. As a majority shareholder, and under its
other arrangements with Equitable Life and Equitable Life's parent, AXA
exercises significant influence over the operations and capital structure of
Equitable Life and its parent. No company other than Equitable Life, however,
has any legal responsibility to pay amounts that Equitable Life owes under the
contracts. During 1999, Equitable Companies plans to change its name to AXA
Financial, Inc.
Equitable Companies and its consolidated subsidiaries managed approximately
$347.5 billion in assets as of December 31, 1998. For over 100 years we have
been among the largest insurance companies in the United States. We are licensed
to sell life insurance and annuities in all fifty states, the District of
Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is located
at 1290 Avenue of the Americas, New York, N.Y. 10104.
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WHO IS EQUITABLE LIFE? 7
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HOW TO REACH US
You may communicate with our Processing Office as listed below for any of the
following purposes:
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FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
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Equitable Life
EQUI-VEST
Unit Collections
P.O. Box 13463
Newark, New Jersey 07188-0463
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FOR TSA AND CORPORATE TRUSTEED LOAN
REPAYMENTS SENT BY REGULAR MAIL:
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Equitable Life
Loan Repayment
EQUI-VEST Lockbox
P.O. Box 13496
Newark, NJ 07188-0496
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
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Equitable Life
EQUI-VEST
P.O. Box 2996
New York, NY 10116-2996
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
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Equitable Life
c/o First Chicago
National Processing Center
300 Harmon Meadow Boulevard
3rd Floor
Secaucus, NJ 07094
Attn: Box 13463
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
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Equitable Life
EQUI-VEST
200 Plaza Drive,
2nd Floor
Secaucus, NJ 07094
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o annual and semiannual statements of your contract values based on the
calendar year;
o statement of your contract values as of the last day of the contract year.
We reserve the right to change the frequency of these reports.
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TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") SYSTEM
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TOPS is designed to provide you with up-to-date information via touch-tone
telephone. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options.
You can also:
o change your allocation percentages and/or transfer among the variable
investment options and the guaranteed interest option;
o elect the automatic transfer options investment simplifier; and
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8 WHO IS EQUITABLE LIFE?
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o change your personal identification number ("PIN").
TOPS is normally available seven days a week, 24 hours a day, by calling
toll-free 1 (800) 755-7777. Of course, for reasons beyond our control, the
service may sometimes be unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone are genuine. For example, we will require certain
personal identification information before we will act on telephone instructions
and we will provide written confirmation of your transfers. We will not be
liable for following telephone instructions we reasonably believe to be genuine.
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BY INTERNET:
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You can also access information about your contract on the
Internet. Please visit our website at http://www.equitable.com,
and click on EQAccess.
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CUSTOMER SERVICE REPRESENTATIVE:
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You may also use our toll-free number 1 (800) 628-6673 to
speak with one of our customer service representatives. Our
customer service representatives are available on each
business day Monday through Thursday from 8:00 a.m. to
7:00 p.m., and on Fridays until 5:00 p.m. Eastern Time.
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TOLL-FREE TELEPHONE SERVICE:
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You may reach us toll-free by calling 1 (800) 841-0801 for a
recording of daily unit values for the variable investment
options.
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You should send all contributions, notices, and requests to our Processing
Office at an address above.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) election of the automatic investment program (not applicable to all
contracts);
(2) election of the automatic transfer options investment simplifier;
(3) election of the automatic NQ deposit service;
(4) election of the rebalancing program;
(5) to obtain a PIN required for TOPS;
(6) election of required minimum distribution option;
(7) tax withholding election; and
(8) transfer/rollover of assets to another carrier.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers among investment options;
(4) withdrawal requests; and
(5) contract termination;
TO CHANGE OR CANCEL ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) automatic transfer options investment simplifier; and
(3) rebalancing program.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
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WHO IS EQUITABLE LIFE? 9
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SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. For TSA, SEP, and SIMPLE IRA contracts we need the annuitant's signature
and in some cases the Plan Administrator's signature if the Plan requires it.
<PAGE>
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10 EQUI-VEST EMPLOYER- SPONSORED RETIREMENT PROGRAMS AT A GLANCE -- KEY FEATURES
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EQUI-VEST employer- sponsored retirement programs at a glance -- key features
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<TABLE>
<CAPTION>
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<S> <C> <C>
PROFESSIONAL EQUI-VEST's variable investment options invest in 24 different Portfolios managed by
INVESTMENT professional investment advisers.
MANAGEMENT
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GUARANTEED o Principal and interest guarantees
INTEREST OPTION o Interest rates set periodically
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TAX ADVANTAGES o On earnings inside No tax on any dividends, interest or capital gains until you
the contract make withdrawals from your contract or receive
annuity payments.
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o On transfers inside No tax on transfers among investment options.
the contract
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Because you are buying a contract to fund a retirement plan that already provides tax
deferral, you should do so for the contract's features and benefits other than tax
deferral. The tax deferral of the contract does not provide additional benefits.
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MINIMUM CONTRIBUTION o $20 each contribution - maximum limits may apply.
AMOUNTS
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ACCESS TO YOUR MONEY o Lump sum withdrawals
o Withdrawals on a periodic basis
o Required minimum distribution option
o Contract termination
Withdrawals are subject to the terms of the plan and may be limited. You may be subject to
a withdrawal charge for certain withdrawals. You may also incur income tax and a penalty
tax.
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PAYOUT ALTERNATIVES o Annuity payout options
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ADDITIONAL FEATURES o Dollar cost averaging by automatic transfers
-- Interest sweep option
-- Fixed dollar option
o Automatic investment program (not applicable to all contracts)
o Account value rebalancing (quarterly, semiannually and annually)
o No charge on transfers among investment options
o Waiver of withdrawal charge for disability, confinement to a nursing home and terminal
illness (series 300 and 400 only)
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FEES AND CHARGES UNDER o Daily charge on amounts invested in variable investment options for mortality and
SERIES 300 AND 400 expense risks and other expenses at an annual rate of 1.35%.
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</TABLE>
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EQUI-VEST EMPLOYER- SPONSORED RETIREMENT PROGRAMS AT A GLANCE -- KEY FEATURES 11
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FEES AND CHARGES UNDER o Annual administrative charge:
SERIES 300 AND 400 -- $30 currently or during the first two contract
(CONTINUED) years 2% of the account value if less
($65 maximum).
o Third party transfer or exchange:
-- $25 currently ($65 maximum) per occurrence.
o No sales charge deducted when you make
contributions.
o Withdrawal charge:
-- series 300, 400, and Trusteed contracts -- 6% of
contributions that have been withdrawn if such\
contributions were made in the current and five
prior contract years. There is no charge in any
contract year in which the amount withdrawn does
not exceed 10% of your account value at the time
of your withdrawal request minus prior
withdrawals in that contract year. There are many
circumstances under which the withdrawal charge
will not apply. They are discussed under "Charges
and expenses" later in this prospectus.
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The 12-month period beginning on your contract
date and each 12-month period after that date is
a "contract year." The end of each 12-month
period is your "contract date anniversary." The
"contract date" is the effective date of a
contract. This usually is the business day we
receive the properly completed and signed
application, and any other required documents
and your contribution. Your contract date will be
shown in your contract.
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o We also deduct a charge for taxes such as premium
taxes that may be imposed in your state. The charge
is generally deducted from the amount applied to an
annuity payout option.
o We generally deduct a $350 annuity administrative
fee from amounts applied to purchase certain life
annuity payout options.
o Annual expenses of The Hudson River Trust and EQ
Advisors Trust Portfolios are calculated as a
percentage of the average daily net assets invested
in each Portfolio. These expenses include
management and advisory fees ranging from 0.31% to
1.15% annually, other expenses, 12b-1
fees of 0.25% annually for EQ
Advisors Trust.
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12 EQUI-VEST EMPLOYER- SPONSORED RETIREMENT PROGRAMS AT A GLANCE -- KEY FEATURES
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FEES AND CHARGES UNDER
SERIES 100 AND 200
o Daily charge on amounts invested in variable
investment options for mortality and expense risks
and other expenses at annual rates determined by
contract series:
series 100 -- 1.34%; three options at 1.49%.
series 200 -- 1.34%; three options at 1.40%.
o Annual administrative charge: $30 maximum.
o Third party transfer or exchange: none.
o No sales charges are deducted when you make
contributions.
o Withdrawal charge:
-- for EQUI-VEST Trusteed -- 6% of the contributions
that have been withdrawn if such contributions
were made in the current and five prior contract
years, or
-- for all other contracts -- 6% generally declining
for the first through 12th contract years. The
total of all withdrawal charges may not exceed 8%
of all contributions made during a specified
period before the withdrawal is made.
o We also deduct a charge for taxes such as premium
taxes that may be imposed in your state. The charge
is generally deducted from the amount applied to an
annuity payout option.
o We generally deduct an annuity administrative fee
of up to $350 from amounts applied to purchase
certain life annuity payout options.
o Annual expenses of The Hudson River Trust and EQ
Advisors Trust Portfolios are calculated as a
percentage of the average daily net assets invested
in each Portfolio. These expenses include
management and advisory fees ranging from 0.31% to
1.15% annually, other expenses and, for EQ Advisors
Trust, 12b-1 fees of 0.25% annually.
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY, OR MAY BE IMPOSED BY
EMPLOYERS UNDER THEIR PLANS. MAXIMUM EXPENSE LIMITATIONS APPLY TO CERTAIN
VARIABLE INVESTMENT OPTIONS, AND RIGHTS ARE RESERVED TO CHANGE OR WAIVE CERTAIN
CHARGES WITHIN SPECIFIED LIMITS. ALSO, ALL FEATURES OF THE CONTRACT ARE NOT
NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
Equitable associate, or call us, if you have any questions.
<PAGE>
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FEE TABLE 13
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Fee table
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The fee tables below will help you understand the various charges and expenses
that apply to your contract series. The tables reflect charges you will directly
incur under the contract, as well as charges and expenses of the Portfolios that
you will bear indirectly. Charges for taxes, such as premium taxes, may also
apply. Also, an administrative fee may apply when your annuity payments are to
begin. Each of the charges and expenses is more fully described under "Charges
and expenses" later in this prospectus. For a complete description of Portfolio
charges and expenses, please see the attached prospectuses for The Hudson River
Trust and EQ Advisors Trust.
The guaranteed interest option is not covered by the fee tables and examples.
The only charges shown in the tables that apply to the guaranteed interest
option are the withdrawal charge, the annual administrative charge, and the
third party transfer or exchange fee. Also, an administrative fee may apply when
your annuity payments are to begin.
EQUI-VEST SERIES 300 AND 400 CONTRACTS
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A) EXPRESSED AS AN ANNUAL
PERCENTAGE OF DAILY NET ASSETS
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Mortality and expense risk(1) 1.10%
Other expenses(2) 0.25%
----
Total Separate Account A annual expenses(3) 1.35%
== ====
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
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Annual administrative charge(4) $30
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
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Maximum withdrawal charge(5) 6%
Third party transfer or exchange fee(6) $25 for each occurrence
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</TABLE>
<PAGE>
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14 FEE TABLE
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THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
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INVESTMENT TOTAL
MANAGEMENT & OTHER ANNUAL
ADVISORY FEES EXPENSES EXPENSES(7)
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<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.02% 0.56%
Alliance Balanced 0.41% 0.04% 0.45%
Alliance Common Stock 0.36% 0.03% 0.39%
Alliance Conservative Investors 0.48% 0.05% 0.53%
Alliance Equity Index 0.31% 0.03% 0.34%
Alliance Global 0.64% 0.07% 0.71%
Alliance Growth & Income 0.55% 0.03% 0.58%
Alliance Growth Investors 0.51% 0.04% 0.55%
Alliance High Yield 0.60% 0.03% 0.63%
Alliance Intermediate Government Securities 0.50% 0.05% 0.55%
Alliance International 0.90% 0.16% 1.06%
Alliance Money Market 0.35% 0.02% 0.37%
Alliance Quality Bond 0.53% 0.04% 0.57%
Alliance Small Cap Growth 0.90% 0.06% 0.96%
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</TABLE>
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FEE TABLE 15
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EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
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TOTAL
OTHER ANNUAL
INVESTMENT EXPENSES EXPENSES
MANAGEMENT & (AFTER EXPENSE (AFTER EXPENSE
ADVISORY FEES 12B-1 FEE(8) LIMITATION) LIMITATION)(9)
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<S> <C> <C> <C> <C>
MFS Emerging Growth
Companies 0.55% 0.25% 0.05% 0.85%
MFS Research 0.55% 0.25% 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.55% 0.25% 0.05% 0.85%
Merrill Lynch World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging
Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.55% 0.25% 0.10% 0.90%
EQ/Putnam Growth & Income
Value 0.55% 0.25% 0.05% 0.85%
T. Rowe Price Equity Income 0.55% 0.25% 0.05% 0.85%
T. Rowe Price International Stock 0.75% 0.25% 0.20% 1.20%
Warburg Pincus Small Company
Value 0.65% 0.25% 0.10% 1.00%
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</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) We currently charge 0.25% for the Alliance Aggressive Stock, Alliance
Balanced, Alliance Common Stock, and Alliance Money Market options. The
charge is 0.24% for all the other options. We reserve the right to
increase this charge to 0.25% at our discretion.
(3) The total annual expenses of Separate Account A variable investment
options are not permitted to exceed a total annual rate of 1.35%.
(4) This charge for the first two contract years is equal to the lesser of
$30 or 2% of your account value, and thereafter, the charge is $30 for
each contract year. We reserve the right to increase this charge to an
annual maximum of $65.
(5) Deducted upon a withdrawal of amounts, or defaulted loan amounts, in
excess of the 10% free withdrawal amount. Important exceptions and
limitations may eliminate or reduce this charge.
(6) We reserve the right to increase this charge to a maximum of $65 for each
occurrence.
(7) The fees and expenses shown for all Portfolios are for the year ended
December 31, 1998. The investment management and advisory fee for each
Portfolio of The Hudson River Trust may vary from year to year depending
upon the average daily net assets of the respective Portfolio. The
maximum investment management and advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. See the
prospectus for The Hudson River Trust. The other direct operating
expenses will also fluctuate from year to year depending on actual
expenses.
(8) The Class IB shares of EQ Advisors Trust are subject to fees imposed
under a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors
Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. The 12b-1 fee will not be increased for the life of the
contracts.
(9) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. See the prospectus for EQ Advisors Trust. The amounts shown
as "Other Expenses" will fluctuate from year to year depending on actual
expenses. However, EQ Financial Consultants, Inc. ("EQF"), EQ Advisors
Trust's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement EQF 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,
<PAGE>
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16 FEE TABLE
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taxes, brokerage commissions, capitalized expenditures, extraordinary
expenses and 12b-1 fees) are limited for the average daily net assets of
each Portfolio as follows: 0.60% for EQ/Putnam Growth & Income Value, MFS
Emerging Growth Companies, MFS Research, Merrill Lynch Basic Value Equity,
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 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth and Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity, 0.45% for EQ/Putnam Balanced; 0.40% for
T. Rowe Price International Stock; and 0.27% for Warburg Pincus Small
Company Value.
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF 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.
<PAGE>
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FEE TABLE 17
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EXAMPLES: EQUI-VEST SERIES 300 AND 400 CONTRACTS
For each type of series 300 and 400 contract, the examples below show the
expenses that a hypothetical contract owner would pay in the situations
illustrated. We assume a $1,000 contribution is invested in one of the variable
investment options listed, and a 5% annual return is earned on the assets in
that option. We also assume there is no waiver of the withdrawal charge.(1) We
calculate the annual administrative charge by using the total actual annual
administrative charges from the prior year under all EQUI-VEST contracts as a
percentage of the total assets held under all EQUI-VEST contracts.
These examples should not be considered a representation of past or future
expenses for each option. 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.
<TABLE>
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IF YOU SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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THE HUDSON RIVER TRUST OPTIONS
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Alliance Aggressive Stock $76.23 $122.66 $169.46 $235.96
Alliance Balanced $75.14 $119.37 $163.58 $223.95
Alliance Common Stock $75.53 $120.57 $165.72 $228.34
Alliance Conservative Investors $75.83 $121.47 $167.33 $231.61
Alliance Equity Index $73.95 $115.76 $157.13 $210.70
Alliance Global $77.62 $126.85 $176.91 $251.05
Alliance Growth & Income $76.33 $122.96 $169.99 $237.05
Alliance Growth Investors $76.03 $122.07 $168.39 $233.79
Alliance High Yield $76.82 $124.46 $172.66 $242.45
Alliance Intermediate Government Securities $76.03 $122.07 $168.39 $233.79
Alliance International $81.09 $137.27 $195.33 $287.85
Alliance Money Market $74.34 $116.96 $159.28 $215.14
Alliance Quality Bond $76.23 $122.66 $169.46 $235.96
Alliance Small Cap Growth $80.10 $134.30 $190.09 $277.47
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EQ ADVISORS TRUST OPTIONS
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MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
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<CAPTION>
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IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C> <C>
THE HUDSON RIVER TRUST OPTIONS
- ------------------------------------------------------------------------------------------------
Alliance Aggressive Stock $20.64 $ 63.77 $109.46 $235.96
Alliance Balanced $19.49 $ 60.27 $103.58 $223.95
Alliance Common Stock $19.91 $ 61.54 $105.72 $228.34
Alliance Conservative Investors $20.22 $ 62.50 $107.33 $231.61
Alliance Equity Index $18.23 $ 56.45 $ 97.13 $210.70
Alliance Global $22.11 $ 68.21 $116.91 $251.05
Alliance Growth & Income $20.75 $ 64.09 $109.99 $237.05
Alliance Growth Investors $20.43 $ 63.13 $108.39 $233.79
Alliance High Yield $21.27 $ 65.67 $112.66 $242.45
Alliance Intermediate Government Securities $20.43 $ 63.13 $108.39 $233.79
Alliance International $25.79 $ 79.25 $135.33 $287.85
Alliance Money Market $18.65 $ 57.72 $ 99.28 $215.14
Alliance Quality Bond $20.64 $ 63.77 $109.46 $235.96
Alliance Small Cap Growth $24.74 $ 76.10 $130.09 $277.47
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EQ ADVISORS TRUST OPTIONS
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MFS Emerging Growth Companies $23.58 $ 72.63 $124.31 $265.93
MFS Research $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $ 83.64 $142.62 $302.21
Morgan Stanley Emerging Markets Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $ 74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $ 83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $ 77.36 $132.19 $281.64
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</TABLE>
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity at the end of any of the periods shown in the
examples. This is because if the amount applied to purchase an annuity
payout option is less than $2,000, or the initial payment is less than
$20, we may pay the amount to you in a single sum instead of as payments
under an annuity payout option. See "Accessing your money."
<PAGE>
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18 FEE TABLE
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IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a life annuity payout option, the expenses shown in the above example of
"if you do not surrender your contract" would, in each case, be increased by
$4.43 based on the average amount applied to annuity payout options in 1998. See
"Annuity administrative fee" under "Charges and expenses."
<PAGE>
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FEE TABLE 19
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EQUI-VEST SERIES 200 CONTRACTS
<TABLE>
<CAPTION>
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A)
EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED, ALLIANCE
COMMON STOCK, AND ALLIANCE ALL OTHER VARIABLE
MONEY MARKET OPTIONS INVESTMENT OPTIONS
------------------------------- -------------------------
<S> <C> <C>
Mortality and expense risk(1) 1.15% 1.09%
Other expenses 0.25% 0.25%(2)
---- -------
Total Separate Account A annual expenses(3)(4) 1.40% 1.34%
==== =======
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- --------------------------------------------------------------------------------
Annual administrative charge(5) $30(5)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN
TRANSACTIONS
- --------------------------------------------------------------------------------
Maximum withdrawal charge(6) 6%
- --------------------------------------------------------------------------------
THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
TOTAL ANNUAL
INVESTMENT EXPENSES
MANAGEMENT & (AFTER EXPENSE
ADVISORY FEES OTHER EXPENSES LIMITATION) (4)(7)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.02% 0.56%
Alliance Balanced 0.41% 0.04% 0.45%
Alliance Common Stock 0.36% 0.03% 0.39%
Alliance Conservative Investors 0.48% 0.05% 0.53%
Alliance Equity Index 0.31% 0.03% 0.34%
Alliance Global 0.64% 0.07% 0.71%
Alliance Growth & Income 0.55% 0.03% 0.58%
Alliance Growth Investors 0.51% 0.04% 0.55%
Alliance High Yield 0.60% 0.03% 0.63%
Alliance Intermediate Government Securities 0.50% 0.05% 0.55%
Alliance International 0.90% 0.16% 1.06%
Alliance Money Market 0.35% 0.02% 0.37%
Alliance Quality Bond 0.53% 0.04% 0.57%
Alliance Small Cap Growth 0.90% 0.06% 0.96%
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
20 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL
INVESTMENT OTHER EXPENSES EXPENSES
MANAGEMENT & (AFTER EXPENSE (AFTER EXPENSE
ADVISORY FEES 12B-1 FEE(8) LIMITATION) LIMITATION) (9)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Emerging Growth Companies 0.55% 0.25% 0.05% 0.85%
MFS Research 0.55% 0.25% 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.55% 0.25% 0.05% 0.85%
Merrill Lynch World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.55% 0.25% 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.55% 0.25% 0.05% 0.85%
T. Rowe Price Equity Income 0.55% 0.25% 0.05% 0.85%
T. Rowe Price International Stock 0.75% 0.25% 0.20% 1.20%
Warburg Pincus Small Company Value 0.65% 0.25% 0.10% 1.00%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) This charge is for financial accounting and other administrative services
related to the contract.
(3) Total Separate Account A annual expenses (not including The Hudson River
Trust fees and other expenses) are guaranteed not to exceed a total
annual rate of 1.40% for the Alliance Balanced, Alliance Common Stock,
and Alliance Money Market options and an annual rate of 1.34% for all the
other options.
(4) The total Separate Account A annual expenses and total annual expenses of
The Hudson River Trust fees when added together are not permitted to
exceed 1.75%. Without this expense limitation, the total annual expenses
deducted from the variable investment options plus The Hudson River Trust
annual expenses for 1998 would have been 1.77% for the Alliance Money
Market option; 1.79% for the Alliance Common Stock option; 1.90% for the
Alliance Aggressive Stock option; and 1.85% for the Alliance Balanced
option.
(5) 2% of your account value if less. Some contracts are exempt from this
charge.
(6) Deducted upon a withdrawal of amounts in excess of the 10% free
withdrawal amount. Important exceptions and limitations may eliminate or
reduce this charge.
(7) The fees and expenses shown for all Portfolios are for the year ended
December 31, 1998. The investment management and advisory fee for each
Portfolio of The Hudson River Trust may vary from year to year depending
upon the average daily net assets of the respective Portfolio. The
maximum investment advisory fees, however, cannot be increased without a
vote of that Portfolio's shareholders. See the prospectus for The Hudson
River Trust. The other direct operating expenses will also fluctuate from
year to year depending on actual expenses. See the expense limitation
discussion in note (4), above.
(8) The Class IB shares of EQ Advisors Trust are subject to fees imposed
under a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors
Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. The 12b-1 fee will not be increased for the life of the
contracts.
(9) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. See the prospectus for EQ Advisors Trust. The amounts shown
as "Other Expenses" will fluctuate from year to year depending on actual
expenses. However, EQ Financial Consultants, Inc. ("EQF"), EQ Advisors
Trust's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement 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
average daily net assets of each Portfolio as follows: 0.60% for
EQ/Putnam Growth & Income Value, MFS Emerging Growth Companies, MFS
Research, Merrill Lynch Basic Value Equity, and T. Rowe Price Equity
Income; 0.65% for EQ/Putnam Balanced; 0.75% for Warburg Pincus Small
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth and Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity; 0.45% for EQ/Putnam Balanced; 0.40% for T.
Rowe Price International Stock; and 0.27% for Warburg Pincus Small Company
Value.
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF 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.
<PAGE>
- --------------------------------------------------------------------------------
22 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 200 CONTRACTS
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume a $1,000 contribution is invested
in one of the variable investment options listed, and a 5% annual return is
earned on the assets in that option. We also assume there is no waiver of the
withdrawal charge.(1) We calculate the annual administrative charge by using the
total actual annual administrative charges from the prior year under all
EQUI-VEST contracts as a percentage of the total assets held under all EQUI-VEST
contracts.
These examples should not be considered a representation of past or future
expenses for each option. 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 EXPENSES
WOULD BE: FOR SEP, SARSEP, EDC AND ANNUITANT-OWNED HR-10 CONTRACTS:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $80.83 $124.44 $163.81 $255.10
Alliance Balanced $80.83 $124.44 $163.81 $255.10
Alliance Common Stock $80.83 $124.44 $163.81 $255.10
Alliance Conservative Investors $82.01 $128.02 $169.86 $267.82
Alliance Equity Index $80.14 $122.35 $160.27 $247.62
Alliance Global $83.79 $133.37 $178.87 $286.60
Alliance Growth & Income $82.50 $129.51 $172.37 $273.07
Alliance Growth Investors $82.21 $128.61 $170.86 $269.92
Alliance High Yield $83.00 $130.99 $174.87 $278.29
Alliance Intermediate Government Securities $82.21 $128.61 $170.86 $269.92
Alliance International $87.24 $143.71 $196.19 $322.15
Alliance Money Market $80.83 $124.44 $163.81 $255.10
Alliance Quality Bond $82.41 $129.21 $171.87 $272.02
Alliance Small Cap Growth $86.25 $140.76 $191.27 $312.12
- ------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $85.17 $137.51 $185.83 $300.97
MFS Research $85.17 $137.51 $185.83 $300.97
Merrill Lynch Basic Value Equity $85.17 $137.51 $185.83 $300.97
Merrill Lynch World Strategy $88.62 $147.83 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $94.05 $163.88 $229.58 $388.62
EQ/Putnam Balanced $85.66 $138.99 $188.30 $306.06
EQ/Putnam Growth & Income Value $85.17 $137.51 $185.83 $300.97
T. Rowe Price Equity Income $85.17 $137.51 $185.83 $300.97
T. Rowe Price International Stock $88.62 $147.83 $203.05 $336.02
Warburg Pincus Small Company Value $86.65 $141.94 $193.24 $316.15
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR TSA AND UNIVERSITY TSA CONTRACTS:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $163.81 $255.10
Alliance Balanced $74.64 $117.86 $163.81 $255.10
Alliance Common Stock $74.64 $117.86 $163.81 $255.10
Alliance Conservative Investors $75.83 $121.47 $169.86 $267.82
Alliance Equity Index $73.95 $115.76 $160.27 $247.62
Alliance Global $77.62 $126.85 $178.87 $286.60
Alliance Growth & Income $76.33 $122.96 $172.37 $273.07
Alliance Growth Investors $76.03 $122.07 $170.86 $269.92
Alliance High Yield $76.82 $124.46 $174.87 $278.29
Alliance Intermediate Government Securities $76.03 $122.07 $170.86 $269.92
Alliance International $81.09 $137.27 $196.19 $322.15
Alliance Money Market $74.64 $117.86 $163.81 $255.10
Alliance Quality Bond $76.23 $122.66 $171.87 $272.02
Alliance Small Cap Growth $80.10 $134.30 $191.27 $312.12
- -------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $79.01 $131.03 $185.83 $300.97
MFS Research $79.01 $131.03 $185.83 $300.97
Merrill Lynch Basic Value Equity $79.01 $131.03 $185.83 $300.97
Merrill Lynch World Strategy $82.48 $141.41 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $388.62
EQ/Putnam Balanced $79.51 $132.51 $188.30 $306.06
EQ/Putnam Growth & Income Value $79.01 $131.03 $185.83 $300.97
T. Rowe Price Equity Income $79.01 $131.03 $185.83 $300.97
T. Rowe Price International Stock $82.48 $141.41 $203.05 $336.02
Warburg Pincus Small Company Value $80.50 $135.49 $193.24 $316.15
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
24 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR ALL TRUSTEED CONTRACTS:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $160.90 $218.45
Alliance Balanced $74.64 $117.86 $160.90 $218.45
Alliance Common Stock $74.64 $117.86 $160.90 $218.45
Alliance Conservative Investors $75.83 $121.47 $167.33 $231.61
Alliance Equity Index $73.95 $115.76 $157.13 $210.70
Alliance Global $77.62 $126.85 $176.91 $251.05
Alliance Growth & Income $76.33 $122.96 $169.99 $237.05
Alliance Growth Investors $76.03 $122.07 $168.39 $233.79
Alliance High Yield $76.82 $124.46 $172.66 $242.45
Alliance Intermediate Government Securities $76.03 $122.07 $168.39 $233.79
Alliance International $81.09 $137.27 $195.33 $287.85
Alliance Money Market $74.64 $117.86 $160.90 $218.45
Alliance Quality Bond $76.23 $122.66 $169.46 $235.96
Alliance Small Cap Growth $80.10 $134.30 $190.09 $277.47
- ------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
FOR ALL SERIES 200 CONTRACTS:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Balanced $18.97 $ 58.68 $100.90 $218.45
Alliance Common Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Conservative Investors $20.22 $ 62.50 $107.33 $231.61
Alliance Equity Index $18.23 $ 56.45 $ 97.13 $210.70
Alliance Global $22.11 $ 68.21 $116.91 $251.05
Alliance Growth & Income $20.75 $ 64.09 $109.99 $237.05
Alliance Growth Investors $20.43 $ 63.13 $108.39 $233.79
Alliance High Yield $21.27 $ 65.67 $112.66 $242.45
Alliance Intermediate Government Securities $20.43 $ 63.13 $108.39 $233.79
Alliance International $25.79 $ 79.25 $135.33 $287.85
Alliance Money Market $18.97 $ 58.68 $100.90 $218.45
Alliance Quality Bond $20.64 $ 63.77 $109.46 $235.96
Alliance Small Cap Growth $24.74 $ 76.10 $130.09 $277.47
- ------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $23.58 $ 72.63 $124.31 $265.93
MFS Research $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $ 83.64 $142.62 $302.21
Morgan Stanley Emerging Markets Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $ 74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $ 83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $ 77.36 $132.19 $281.64
- ------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity at the end of any of the periods shown in the
examples. This is because if the amount applied to purchase an annuity
payout option is less than $2,000, or the initial payment is less than
$20, we may pay the amount to you in a single sum instead of as payments
under an annuity payout option. See "Accessing your money."
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see note (1) above), and
you elect a life annuity payout option, the expenses shown in the above example
of "if you do not surrender your contract" would, in each case, be increased by
$4.43 based on the average amount applied to annuity payout options in 1998.
See "Annuity administrative fee" under "Charges and expenses."
<PAGE>
- --------------------------------------------------------------------------------
26 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQUI-VEST SERIES 100 CONTRACTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A) EXPRESSED AS AN ANNUAL
PERCENTAGE OF DAILY NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED, ALLIANCE
COMMON STOCK, AND ALLIANCE ALL OTHER VARIABLE
MONEY MARKET OPTIONS INVESTMENT OPTIONS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mortality and expense risk(1) 0.65% 0.50%
Other expenses(2) 0.84% 0.84%
---- ----
Total Separate Account A annual expenses(3)(4) 1.49% 1.34%
==== ====
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- ------------------------------------------------------------------------------------------------
<S> <C>
Annual administrative charge(5) $30
- ------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6) 6%
- ------------------------------------------------------------------------------------------------
</TABLE>
THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
TOTAL
ANNUAL
INVESTMENT EXPENSES
MANAGEMENT & OTHER (AFTER EXPENSE
ADVISORY FEES EXPENSES LIMITATION)(4)(7)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.02% 0.56%
Alliance Balanced 0.41% 0.04% 0.45%
Alliance Common Stock 0.36% 0.03% 0.39%
Alliance Conservative Investors 0.48% 0.05% 0.53%
Alliance Equity Index 0.31% 0.03% 0.34%
Alliance Global 0.64% 0.07% 0.71%
Alliance Growth & Income 0.55% 0.03% 0.58%
Alliance Growth Investors 0.51% 0.04% 0.55%
Alliance High Yield 0.60% 0.03% 0.63%
Alliance Intermediate Government Securities 0.50% 0.05% 0.55%
Alliance International 0.90% 0.16% 1.06%
Alliance Money Market 0.35% 0.02% 0.37%
Alliance Quality Bond 0.53% 0.04% 0.57%
Alliance Small Cap Growth 0.90% 0.06% 0.96%
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 27
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
INVESTMENT EXPENSES EXPENSES
MANAGEMENT & (AFTER EXPENSE (AFTER EXPENSE
ADVISORY FEES 12B-1 FEE(8) LIMITATION) LIMITATION)(9)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Emerging Growth Companies 0.55% 0.25% 0.05% 0.85%
MFS Research 0.55% 0.25% 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.55% 0.25% 0.05% 0.85%
Merrill Lynch World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.55% 0.25% 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.55% 0.25% 0.05% 0.85%
T. Rowe Price Equity Income 0.55% 0.25% 0.05% 0.85%
T. Rowe Price International Stock 0.75% 0.25% 0.20% 1.20%
Warburg Pincus Small Company Value 0.65% 0.25% 0.10% 1.00%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) This charge is for financial accounting and other administrative services
related to the contract.
(3) Total Separate Account A annual expenses (not including The Hudson River
Trust fees and other expenses) are guaranteed not to exceed a total
annual rate of 1.49% for the Alliance Balanced, Alliance Common Stock,
and Alliance Money Market options and an annual rate of 1.34% for all the
other options.
(4) The total Separate Account A annual expenses and total annual expenses of
The Hudson River Trust fees when added together are not permitted to
exceed an annual rate of 1.75% for the Alliance Aggressive Stock,
Alliance Balanced, Alliance Common Stock, and Alliance Money Market
options. Without this expense limitation, the total annual expenses
deducted from the variable investment options plus The Hudson River Trust
annual expenses for 1998 would have been 1.86% for the Alliance Money
Market option; 1.88% for the Alliance Common Stock option; 1.90% for the
Alliance Aggressive Stock option; and 1.94% for the Alliance Balanced
option.
(5) 2% of your account value if less. Some contracts are exempt from this
charge.
(6) Deducted upon a withdrawal of amounts in excess of the 10% free
withdrawal amount. Important exceptions and limitations may eliminate or
reduce this charge.
(7) The fees and expenses for all Portfolios are for the year ended December
31, 1998. The investment management and advisory fee for each Portfolio
of The Hudson River Trust may vary from year to year depending upon the
average daily net assets of the respective Portfolio. The maximum
investment advisory fees, however, cannot be increased without a vote of
that Portfolio's shareholders. See the prospectus for The Hudson River
Trust. The other direct operating expenses will also fluctuate from year
to year depending on actual expenses. See the expense limitation
discussion in note (4), above.
(8) The Class IB shares of EQ Advisors Trust are subject to fees imposed
under a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors
Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. The 12b-1 fee will not be increased for the life of the
contracts.
(9) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. See the prospectus for EQ Advisors Trust. The amounts shown
as "Other Expenses" will fluctuate from year to year depending on actual
expenses. However, EQ Financial Consultants, Inc. ("EQF"), EQ Advisors
Trust's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement EQF 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 average daily
net
<PAGE>
- --------------------------------------------------------------------------------
28 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
assets of each Portfolio as follows: 0.60% for EQ/Putnam Growth & Income
Value, MFS Emerging Growth Companies, MFS Research, Merrill Lynch Basic
Value Equity, 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 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth and Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity; 0.45% for EQ/Putnam Balanced; 0.40% for
T. Rowe Price International Stock; and 0.27% for Warburg Pincus Small
Company Value.
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF 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.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 100 CONTRACTS
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume a $1,000 contribution is invested
in one of the variable investment options listed, and a 5% annual return is
earned on the assets in that option. We also assume there is no waiver of the
withdrawal charge.(1) We calculate the annual administrative charge by using the
total actual annual administrative charges from the prior year under all
EQUI-VEST contracts as a percentage of the total assets held under all EQUI-VEST
contracts.
These examples should not be considered a representation of past or future
expenses for each option. 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 EXPENSES
WOULD BE: FOR SEP, SARSEP, EDC AND ANNUITANT-OWNED HR-10 CONTRACTS:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $80.83 $124.44 $163.81 $255.10
Alliance Balanced $80.83 $124.44 $163.81 $255.10
Alliance Common Stock $80.83 $124.44 $163.81 $255.10
Alliance Conservative Investors $82.01 $128.02 $169.86 $267.82
Alliance Equity Index $80.14 $122.35 $160.27 $247.62
Alliance Global $83.79 $133.37 $178.87 $286.60
Alliance Growth & Income $82.50 $129.51 $172.37 $273.07
Alliance Growth Investors $82.21 $128.61 $170.86 $269.92
Alliance High Yield $83.00 $130.99 $174.87 $278.29
Alliance Intermediate Government Securities $82.21 $128.61 $170.86 $269.92
Alliance International $87.24 $143.71 $196.19 $322.15
Alliance Money Market $80.83 $124.44 $163.81 $255.10
Alliance Quality Bond $82.41 $129.21 $171.87 $272.02
Alliance Small Cap Growth $86.25 $140.76 $191.27 $312.12
- -------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $85.17 $137.51 $185.83 $300.97
MFS Research $85.17 $137.51 $185.83 $300.97
Merrill Lynch Basic Value Equity $85.17 $137.51 $185.83 $300.97
Merrill Lynch World Strategy $88.62 $147.83 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $94.05 $163.88 $229.58 $388.62
EQ/Putnam Balanced $85.66 $138.99 $188.30 $306.06
EQ/Putnam Growth & Income Value $85.17 $137.51 $185.83 $300.97
T. Rowe Price Equity Income $85.17 $137.51 $185.83 $300.97
T. Rowe Price International Stock $88.62 $147.83 $203.05 $336.02
Warburg Pincus Small Company Value $86.65 $141.94 $193.24 $316.15
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
30 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR ALL TSA CONTRACTS:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $163.81 $255.10
Alliance Balanced $74.64 $117.86 $163.81 $255.10
Alliance Common Stock $74.64 $117.86 $163.81 $255.10
Alliance Conservative Investors $75.83 $121.47 $169.86 $267.82
Alliance Equity Index $73.95 $115.76 $160.27 $247.62
Alliance Global $77.62 $126.85 $178.87 $286.60
Alliance Growth & Income $76.33 $122.96 $172.37 $273.07
Alliance Growth Investors $76.03 $122.07 $170.86 $269.92
Alliance High Yield $76.82 $124.46 $174.87 $278.29
Alliance Intermediate Government Securities $76.03 $122.07 $170.86 $269.92
Alliance International $81.09 $137.27 $196.19 $322.15
Alliance Money Market $74.64 $117.86 $163.81 $255.10
Alliance Quality Bond $76.23 $122.66 $171.87 $272.02
Alliance Small Cap Growth $80.10 $134.30 $191.27 $312.12
- -----------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $79.01 $131.03 $185.83 $300.97
MFS Research $79.01 $131.03 $185.83 $300.97
Merrill Lynch Basic Value Equity $79.01 $131.03 $185.83 $300.97
Merrill Lynch World Strategy $82.48 $141.41 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $388.62
EQ/Putnam Balanced $79.51 $132.51 $188.30 $306.06
EQ/Putnam Growth & Income Value $79.01 $131.03 $185.83 $300.97
T. Rowe Price Equity Income $79.01 $131.03 $185.83 $300.97
T. Rowe Price International Stock $82.48 $141.41 $203.05 $336.02
Warburg Pincus Small Company Value $80.50 $135.49 $193.24 $316.15
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 31
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
FOR ALL SERIES 100 CONTRACTS:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Balanced $18.97 $ 58.68 $100.90 $218.45
Alliance Common Stock $18.97 $ 58.68 $100.90 $218.45
Alliance Conservative Investors $20.22 $ 62.50 $107.33 $231.61
Alliance Equity Index $18.23 $ 56.45 $ 97.13 $210.70
Alliance Global $22.11 $ 68.21 $116.91 $251.05
Alliance Growth & Income $20.75 $ 64.09 $109.99 $237.05
Alliance Growth Investors $20.43 $ 63.13 $108.39 $233.79
Alliance High Yield $21.27 $ 65.67 $112.66 $242.45
Alliance Intermediate Government Securities $20.43 $ 63.13 $108.39 $233.79
Alliance International $25.79 $ 79.25 $135.33 $287.85
Alliance Money Market $18.97 $ 58.68 $100.90 $218.45
Alliance Quality Bond $20.64 $ 63.77 $109.46 $235.96
Alliance Small Cap Growth $24.74 $ 76.10 $130.09 $277.47
- -----------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $23.58 $ 72.63 $124.31 $265.93
MFS Research $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $ 72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $ 83.64 $142.62 $302.21
Morgan Stanley Emerging Markets Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $ 74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $ 72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $ 83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $ 77.36 $132.19 $281.64
- -----------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity at the end of any of the periods shown in the
examples. This is because if the amount applied to purchase an annuity
payout option is less than $2,000, or the initial payment is less than
$20, we may pay the amount to you in a single sum instead of as payments
under an annuity payout option.
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see note (1) above), and you
elect a life annuity payout option, the expenses shown in the above example of
"if you do not surrender your contract" would, in each case, be increased by
$4.43 based on the average amount applied to annuity payout options in 1998. See
"Annuity administrative fee" under "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix II at the end of this prospectus, for the unit values and
number of units outstanding as of the periods shown for each of the variable
investment options.
<PAGE>
- --------------------------------------------------------------------------------
32 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
1
Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us we call "contributions."
We require a minimum contribution amount of $20 for each type and series of
contract. If the total annual contributions to a TSA will be at least $200
annually, we may accept contributions of less than $20. The following table
summarizes our rules regarding contributions to your contract.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
CONTRACT TYPE SOURCE OF CONTRIBUTIONS LIMITATIONS ON CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SEP o Employer o Annual employer contributions up to the
lesser of $24,000 or 15% of employee
compensation
o Limits on contributions after age 70 1/2
- ----------------------------------------------------------------------------------------------------------------------------
SARSEP o Employer remitted employee salary reduction o Annual employer contributions up to the
and/or nonelective employer contributions lesser of $24,000 or 15% of employee
(pre 1997 plans only) compensation
o Limits on contributions after age 70 1/2
o Maximum salary reduction contribution is
$10,000 for 1999
- ----------------------------------------------------------------------------------------------------------------------------
SIMPLE IRA o Employee salary reduction; employer match o Salary reduction contributions up to $6,000;
employer matching contributions up to 3% of
employee compensation
o Limits on contributions after age 70 1/2
- ----------------------------------------------------------------------------------------------------------------------------
Unincorporated and o Employer, including for self employed o Maximum amount of contributions subject to
Corporate Trusteed o Salary reduction 401(k) if plan permits tax law formula which varies
o Maximum salary reduction contribution is
$10,000 for 1999
- ----------------------------------------------------------------------------------------------------------------------------
TSA and University TSA o Employer remitted employee salary reduction o Maximum amount of contributions subject to
and/or nonelective employer contributions tax law formula which varies
o Rollovers from another TSA contract or o Maximum salary reduction contribution is
arrangement $10,000 for 1999
o Direct transfers from another contract or o Rollover or direct transfer contributions after
arrangement complying with Internal age 70 1/2 must be net of required minimum
Revenue Code (or "Code") Section 403(b) by distributions
means of IRS Revenue Ruling 90-24.
- ----------------------------------------------------------------------------------------------------------------------------
EDC o Employer remitted employee salary reduction o Maximum contribution is $8,000 for 1999 or
and/or employer contributions 33 1/3% of compensation
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IRA FUNDING. The contracts we issue to fund SEP, SARSEP and, SIMPLE IRA programs
are individual retirement annuities, or "IRAs." Internal Revenue Service ("IRS")
rules for traditional IRA also generally apply to those programs.
---------------------------------
See "Tax information" for a more detailed discussion of sources of
contributions, certain contribution limitations and other tax information. We
may refuse to accept any contribution if the sum of all contributions under all
EQUI-VEST contracts with the same annuitant would then total more than
$1,000,000. We may also refuse to accept any contribution if the sum of all
contributions under all Equitable Life annuity accumulation contracts that you
own would then total more than $2,500,000.
For information on when contributions are credited see "Dates and prices at
which contract events occur" later in this prospectus.
SARSEP, CORPORATE TRUSTEED AND CERTAIN HR-10 CONTRACTS
We no longer offer the EQUI-VEST contracts under SARSEP, Corporate Trusteed and
Annuitant-Owned HR-10 plans, except as follows:
o If you established a SARSEP before 1997, you may continue to make
contributions for existing and new employees under salary reduction
arrangements. We will issue a contract to each participating employee for
whom a contract has not previously been issued.
o If you are an incorporated employer and already have a retirement plan
funded by the EQUI-VEST contracts, we will enroll new employees under your
contract and accept contributions for existing employees.
o If an employer established an HR-10 plan where EQUI-VEST contracts are
owned by the annuitant, rather than by a trustee, we will offer Annuitant
- Owned HR-10 contracts to new employees and continue to accept
contributions for all participating employees.
OWNER AND ANNUITANT REQUIREMENTS
Each employee covered by a SEP, SARSEP or SIMPLE IRA program must be the
contract owner and annuitant.
The owner and annuitant must be the same person under TSA and University TSA
contracts, and is the same person under Annuitant - Owned HR-10 contracts.
The trustee under Trusteed HR-10 and corporate retirement plans is the owner of
the contract. In each case, the employee is the annuitant. We do not act as
trustee for these plans. Only Trusteed contracts may be sold in Puerto Rico and
the tax aspects that apply to such contracts may differ from those described in
this prospectus.
Under EDC contracts, the employer or a trust must be the owner and the employee
is the annuitant. EDC contracts are not currently available for state or
municipal government plans in Texas.
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Employers may make contributions at any time either by wire transfer or by
check. All contributions by check must be by a check drawn on a bank in the U.S.
clearing through the Federal Reserve System, in U.S. dollars, and made payable
to Equitable Life. We do not accept third party checks endorsed to us except for
rollover contributions, tax-free exchanges or trustee checks that involve no
refund. All checks are subject to our ability to collect the funds. We reserve
the right to reject a payment if it is received in an unacceptable form.
You may also make contributions by our automatic investment program. See "Other
methods of payment" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear we will try to obtain that information. If we are unable to obtain all
the information we require within five business days after we receive an
incomplete application or form, we will inform the Equitable associate
submitting the application on your behalf. We will then return the contribution
to you unless
<PAGE>
- --------------------------------------------------------------------------------
34 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
you specifically direct us to keep your contribution until we receive the
required information.
Generally, you may make additional contributions at any time. You may do so in
single sum amounts, on a regular basis, or as your financial situation permits.
- --------------------------------------------------------------------------------
Generally our "business day" is any day on which Equitable Life is open and the
New York Stock Exchange is open for trading.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options, subject to any employer plan limitations, are the
variable investment options and the guaranteed interest option.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the 24 variable investment options will
depend on the investment performance of the underlying Portfolios. Listed below
are the currently available Portfolios, their investment objectives, and their
advisers.
- --------------------------------------------------------------------------------
You can choose among 24 variable investment options.
- --------------------------------------------------------------------------------
PORTFOLIOS OF THE HUDSON RIVER TRUST
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.
- ---------------------------------------------------------------------------------------------------------------------
Alliance Balanced High return through a combination of current Alliance Capital Management L.P.
income and capital appreciation
- ---------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- ---------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
- ---------------------------------------------------------------------------------------------------------------------
Alliance Equity Index Total return (before The Hudson River Trust and Alliance Capital Management L.P.
Separate Account A annual expenses) that
approximates the total return performance of the
Standard & Poor's 500 Composite Stock Price
Index
- ---------------------------------------------------------------------------------------------------------------------
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
- ----------------------------------------------------------------------------------------------------------------
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
- ----------------------------------------------------------------------------------------------------------------
Alliance International Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- ----------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------
Alliance Quality Bond High current income consistent with preservation Alliance Capital Management L.P.
of capital
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
PORTFOLIOS OF EQ ADVISORS TRUST
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MFS Emerging Growth Long-term growth of capital Massachusetts Financial Services Company
Companies
- ----------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- ----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity Capital appreciation and, secondarily, income Merrill Lynch Asset Management, L.P.
- ----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy High total investment return Merrill Lynch Asset Management, L.P.
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Long-term growth capital Rowe Price-Fleming International, Inc.
Stock
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
36 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other important information about the Portfolios is included in the separate
prospectuses for The Hudson River Trust and EQ Advisors Trust attached at the
end of this prospectus.
See "Proposed substitution of Portfolios" under "More information" for
information regarding the proposed substitution of newly created Portfolios of
EQ Advisors Trust for the Portfolios of The Hudson River Trust currently
available under the variable investment options.
GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays interest
at guaranteed rates. We discuss our general account under "More information."
We credit interest daily to amounts in the guaranteed interest option. There are
three levels of interest in effect at the same time in the guaranteed interest
option:
(1) the minimum interest rate guaranteed over the life of
the contract,
(2) the yearly guaranteed interest rate for the calendar
year, and
(3) the current interest rate.
We set current interest rates periodically, according to our procedures that we
have in effect at the time. All interest rates are effective annual rates, but
before deduction of annual administrative charges or any withdrawal charges.
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period, depending on when the
allocation is made. Therefore, different interest rates may apply to different
amounts in the guaranteed interest option. An exception to this approach applies
to Corporate Trusteed contracts and EDC contracts issued to government employees
in New York whose EQUI-VEST funding arrangements became effective on and after
July 1, 1989. Generally, we assign an interest rate to the total amounts
invested in Corporate Trusteed and EDC contracts regardless of when allocations
were made to the guaranteed interest option.
The yearly guaranteed interest rate is 4% for 1999 and 4% for the year 2000. The
yearly guaranteed interest rate we set will never be less than the minimum
guaranteed interest rate of 3% for the life of the contract. The rate is 4% for
EQUI-VEST Corporate Trusteed contracts. Current interest rates will never be
less than the yearly guaranteed rate.
SELECTING YOUR INVESTMENT METHOD
You can choose either of the following two methods for selecting your investment
options:
o MAXIMUM INVESTMENT OPTIONS CHOICE. Under this method you may allocate
contributions to any of the available investment options listed in A and B
in the chart on the next page. You can make transfers whenever you choose.
However, there will be restrictions on the amount you can transfer out of
the guaranteed interest option listed in A.
o MAXIMUM TRANSFER FLEXIBILITY. Under this method you may allocate
contributions to any of the investment options listed in A in the chart on
the next page and no transfer restrictions will apply.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 37
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------
INVESTMENT OPTIONS
- --------------------------------------------------------------------------
A
- --------------------------------------------------------------------------
o Guaranteed Interest Option
- --------------------------------------------------------------------------
DOMESTIC EQUITY INTERNATIONAL EQUITY
- --------------------------------------------------------------------------
o Alliance Common Stock o Alliance Global
o Alliance Equity Index o Alliance International
o Alliance Growth & Income o Morgan Stanley Emerging
o MFS Research Markets Equity
o Merrill Lynch Basic Value Equity o T. Rowe Price International Stock
o EQ/Putnam Growth & Income
Value
o T. Rowe Price Equity Income
- --------------------------------------------------------------------------
ASSET ALLOCATION AGGRESSIVE EQUITY
- --------------------------------------------------------------------------
o Alliance Balanced o Alliance Aggressive Stock
o Alliance Growth Investors o Alliance Small Cap Growth
o Merrill Lynch World Strategy o MFS Emerging Growth
o EQ/Putnam Balanced Companies
o Warburg Pincus Small Company
Value
- --------------------------------------------------------------------------
B
- --------------------------------------------------------------------------
AGGRESSIVE FIXED INCOME
- --------------------------------------------------------------------------
o Alliance High Yield
- --------------------------------------------------------------------------
DOMESTIC FIXED INCOME
- --------------------------------------------------------------------------
o Alliance Intermediate o Alliance Money Market
Government Securities o Alliance Quality Bond
- --------------------------------------------------------------------------
ASSET ALLOCATION
- --------------------------------------------------------------------------
o Alliance Conservative Investors
- --------------------------------------------------------------------------
Please note that under Trusteed contracts your employer or the plan trustee will
select the investment options available to the participant. Under all other
contracts, you may choose from any of the investment options. In all cases, if
any of the options listed in B in the chart above, is selected, you will be
subject to the restrictions on transfers out of the guaranteed interest option
that apply under the maximum investment options choice investment method.
- --------------------------------------------------------------------------------
A participant is an individual who participates in an employer's plan funded by
an EQUI-VEST contract. The participant is also the annuitant who is the
measuring life for determining annuity benefits.
- --------------------------------------------------------------------------------
ERISA CONSIDERATIONS FOR EMPLOYERS
If you are an employer and your plan is intended to comply with the requirements
of the Employee Retirement Income Security Act of 1974 ("ERISA") Section 404(c),
you or your plan trustee must make sure that the investment options chosen for
your plan constitute a broad range of investment choices as required by the
Department of Labor's ("DOL") regulation under ERISA Section 404(c). See "Tax
information."
See Appendix I for information regarding investment choices available under
original contracts.
ALLOCATING YOUR CONTRIBUTIONS
Once you have made your investment method choice, you may allocate your
contributions among only the investment options that you have chosen.
Allocations must be in whole percentages and you may change your allocation
percentages at any time. However, the total of your allocations must equal 100%.
After your contract is issued, you may request that we add or eliminate any
variable investment options that result in transfer restrictions. We reserve the
right to deny your request. See "Transferring your money among investment
options."
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our Processing Office within 10 days after you receive it. In some
states, this "free look"period may be longer.
For contributions allocated to the variable investment options, your refund will
equal your contributions, reflecting any investment gain or loss which also
reflects the daily charges we deduct. For contributions allocated to the
guaranteed interest option, your refund will equal the amount of the
contributions but will not include interest. However, some states require that
we refund the full amount of your contribution (not including any investment
gain or loss, or interest). For contracts issued to fund SEPs, SARSEPs or SIMPLE
IRAs that are returned to us within seven days after you receive it, we are
required to refund the full amount of your contribution.
<PAGE>
- --------------------------------------------------------------------------------
38 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We may require that you wait six months before you apply for a contract with us
again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
<PAGE>
- --------------------------------------------------------------------------------
DETERMINING YOUR CONTRACT'S VALUE 39
- --------------------------------------------------------------------------------
2
Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE
Your "account value" is the total of the values you have allocated to the
variable investment options and the guaranteed interest option. If you have
taken a loan under a TSA or Corporate Trusteed contract, your account value also
includes amounts held in your loan reserve account. See "Loans under TSA and
Corporate Trusteed contracts" under "Accessing your money." These amounts are
subject to certain fees and charges discussed under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less any
withdrawal charge that may apply, and less the total amount or a pro rata
portion of the annual administrative change.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding Portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding Portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract. Your
value will also be reduced by the dollar amount of any partial withdrawals that
you make.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option minus daily charges for mortality and expense risks
and other expenses. On any day, your value in any variable investment option
equals the number of units credited to your contract under that option,
multiplied by that day's value for one unit. The number of your contract units
in any variable investment option does not change unless you make additional
contributions, make a withdrawal, or transfer amounts among investment options
or we transfer your loan amount to the loan reserve account (if loans are
permitted under your contract). In addition, when we deduct the withdrawal
charge, the annual administrative charge, or third party transfer or exchange
charge, the number of units credited to your contract will be reduced. A
description of how unit values are calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED INTEREST OPTION
Your value in the guaranteed interest option at any time will equal: your
contributions and transfers to that option, plus interest, minus withdrawals and
transfers out of the option, and charges we deduct.
<PAGE>
- --------------------------------------------------------------------------------
40 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
3
Transferring your money among investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You must transfer at least $300 of account value or, if less, the entire
amount in the investment option. We may waive the $300 requirement.
o If you choose the maximum investment options choice method for selecting
investment options, the maximum amount you may transfer in any contract
year from the guaranteed interest option to any other investment option is
(a) 25% of the amount you had in the guaranteed interest option on the
last day of the prior contract year or, if greater, (b) the total of all
amounts you transferred from the guaranteed interest option to any other
investment option in the prior contract year.
If you transfer money from another financial institution into the guaranteed
interest option during your first contract year, and if you have selected the
maximum investment options choice, you may, during the balance of that contract
year, transfer up to 25% of such initial guaranteed interest option balance to
any other investment option.
See Appendix I for transfer restrictions under original contracts.
Subject to the terms of your contract, upon advance notice we may change or
establish additional restrictions on transfers among the investment options. A
transfer request does not change your percentages for allocating current or
future contributions among the investment options.
You may request a transfer in writing or by telephone using TOPS. You must send
all signed written requests directly to our Processing Office. Transfer requests
should specify:
(1) the contract number,
(2) the dollar amounts to be transferred, and
(3) the investment options to and from which you are transferring.
Under Trusteed and EDC contracts, you or the trustee or employer owner,
whichever applies, can direct us to transfer among the investment options.
We will confirm all transfers in writing.
AUTOMATIC TRANSFER OPTIONS INVESTMENT SIMPLIFIER
You may choose from two automatic options for transferring amounts from the
guaranteed interest option to the variable investment options. The transfer
options are the "fixed-dollar option" and the "interest sweep." You may select
one or the other, but not both.
FIXED-DOLLAR OPTION. Under this option you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the variable
investment options of your choice on a monthly basis. You can specify the number
of monthly transfers or instruct us to continue to make monthly transfers until
all available amounts in the guaranteed interest option have been transferred
out.
See Appendix I for transfer restrictions under original contracts.
In order to elect the fixed-dollar option you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at our
Processing Office. You also must elect to transfer at least $50 per month. The
fixed-dollar option is subject to the guaranteed interest option transfer
limitation described above under "Transferring your account value."
The fixed-dollar option is a form of dollar-cost averaging. Dollar-cost
averaging allows you to gradually allocate amounts to the variable investment
options by periodically transferring approximately the same dollar amount to the
variable investment options you select. This will cause you to purchase more
units if the unit's value is low and fewer units if the unit's value is high.
Therefore, you may get a lower average cost per unit over the long term. This
plan of investing, however, does not guarantee that you will earn a profit or be
protected against losses.
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TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 41
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INTEREST SWEEP. Under the interest sweep, we will make transfers on a monthly
basis from amounts in the guaranteed interest option. The amount we will
transfer will be the interest credited to amounts you have in the guaranteed
interest option from the last business day of the prior month to the last
business day of the current month. You must have at least $7,500 in the
guaranteed interest option on the date we receive your election and on the last
business day of each month thereafter to participate in the interest sweep
option.
WHEN YOUR PARTICIPATION IN AN AUTOMATIC TRANSFER OPTION WILL END. Your
participation in an automatic transfer option will end:
o Under the fixed-dollar option, when either the number of designated monthly
transfers have been completed or the amount you have available in the
guaranteed interest option has been transferred out.
o Under the interest sweep, when the amount you have in the guaranteed
interest option falls below $7,500 (determined on the last business day of
the month) for two months in a row.
o Under either option, on the date we receive at our Processing Office, your
written request to cancel automatic transfers, or on the date your
contract terminates.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option
(whole percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually).
While your rebalancing program is in effect, we will transfer amounts among each
variable investment option so that the percentage of your account value that you
specify is invested in each option at the end of each rebalancing date. You may
not rebalance only a portion of your account value in the variable investment
options.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your Equitable associate and/or
financial adviser before electing the program.
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You may elect the rebalancing program at any time. To be eligible, you must have
at least $5,000 of account value in the variable investment options. Rebalancing
is not available for amounts you have allocated in the guaranteed interest
option.
You may change your allocation instructions or cancel the program at any time.
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42 ACCESSING YOUR MONEY
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4
Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of taking
withdrawals, see "Tax information."
METHOD OF WITHDRAWAL
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PARTIAL MINIMUM
CONTRACT WITHDRAWAL SYSTEMATIC DISTRIBUTION
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SEP/SARSEP YES YES YES
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SIMPLE IRA YES NO YES
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Trusteed (both types) YES NO YES
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TSA YES YES* YES
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TSA University YES YES* YES
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EDC YES** NO YES
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Annuitant-Owned HR-10 YES YES YES
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* Only if contract is not subject to withdrawal restrictions and there are
no outstanding loans.
** Requires Plan Administrator's approval. See "Tax information and ERISA
matters" later in this prospectus.
PARTIAL WITHDRAWALS AND TERMINATIONS
Subject to the terms of the Plan, your contract, and IRS regulations, you may
take partial withdrawals from your account value or terminate your contract at
any time while the annuitant is living and before annuity payments begin.
Subject to any restrictions in federal income tax rules, the minimum amount you
may withdraw at any time is $300. If your account value is less than $500 after
a withdrawal, we may terminate your contract and pay you its cash value.
Partial withdrawals, or payments of remaining account value in excess of the 10%
free withdrawal amount may be subject to a withdrawal charge.
SYSTEMATIC WITHDRAWALS
If you have at least $20,000 of account value in the investment options you may
elect systematic withdrawals. You may elect to have your systematic withdrawals
made on a monthly or quarterly basis. The minimum amount you may take for each
withdrawal is $300. We will make the withdrawal on any day of the month that you
select as long as it is not later than the 28th day of the month. If you do not
select a date, your withdrawals will be made on the first day of the month. A
check for the amount of the withdrawal will be mailed to you or, if you prefer,
we will electronically transfer the money to your checking account.
You may withdraw either the amount of interest earned in the guaranteed interest
option or a fixed-dollar amount from either the variable investment options or
the guaranteed interest option. If you elect the interest option, a minimum of
$20,000 must be maintained in the guaranteed interest option. If you elect the
fixed-dollar option you do not have to maintain a minimum amount. You may elect
to have the amount of the withdrawal subtracted from your account value in one
of three ways:
(1) pro rata from more than one variable investment option (without using up
your total value in those options); or
(2) pro rata from more than one variable investment option (until your value
in those options is used up); or
(3) you may specify a dollar amount from only one variable investment option.
You may elect systematic withdrawals under TSA contracts if:
o your plan or program permits it;
o the contract is not subject to withdrawal restrictions; and
o the contract does not have a loan outstanding.
You can cancel the systematic withdrawal option at any time.
Amounts withdrawn in excess of the 10% free withdrawal amount may be subject to
a withdrawal charge.
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ACCESSING YOUR MONEY 43
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MINIMUM DISTRIBUTION WITHDRAWALS
(SEPs, SARSEPs, SIMPLE IRAs, TSA and EDC contracts - See "Tax information")
We offer the minimum distribution withdrawal option to help you meet required
minimum distributions under federal income tax rules. You may elect this option
in the year in which you reach age 70 1/2 and have account value in the
investment options of at least $2,000. The minimum amount we will pay out is
$300, or if less, your account value. If your account value is less than $500
after the withdrawal, we may terminate your contract and pay you that amount
minus any withdrawal charge. You elect the method you want us to use to
calculate your minimum distribution withdrawal from the choices we offer.
Currently, minimum distribution withdrawal payments will be made annually.
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your values in the variable investment options and the guaranteed
interest option. We will calculate your payment each year based on your account
value at the end of each calendar year, based on the method you choose.
Except for EDC contracts your election is revocable. You may not elect the
minimum distribution option if you have an outstanding loan under a contract.
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For contracts subject to minimum distribution requirements, we will send a form
outlining the distribution options available during the year you reach age
70 1/2 (if you have not begun your annuity payments before that time).
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If you have an EQUI-VEST TSA that was purchased before December 31, 1986 or a
TSA purchased from another insurance company before December 31, 1986 and
subsequently transferred to an EQUI-VEST TSA, the amount of your pre-1987
account balance is not subject to the minimum distribution rules at age 70 1/2
but postponed to age 75. However, post-1986 salary reduction contributions and
all earnings since that date are subject to minimum distribution requirements of
Section 401(a)(9) of the Internal Revenue Code.
Distributions from a qualified plan, including our prototype plans through which
Annuitant-Owned HR-10 contracts are issued, are subject to the provisions of the
plan document.
AUTOMATIC NQ DEPOSIT SERVICE
If you own an EQUI-VEST nonqualified ("NQ") contract and you are receiving
required minimum distribution payments from a TSA, SEP, SARSEP or SIMPLE IRA
contract you may use our automatic NQ deposit service.
Under this service we will automatically deposit the required minimum
distribution payment from your TSA, SEP, SARSEP or SIMPLE IRA contract directly
into an existing EQUI-VEST NQ contract according to your allocation
instructions.
LOANS UNDER TSA AND CORPORATE TRUSTEED CONTRACTS
You may borrow against your account value only under a TSA or Corporate Trusteed
contract. An employer's retirement plan may, however, contain restrictions, and
loans under TSA and Corporate Trusteed contracts may not be available in all
states. Also, ERISA rules apply to loans under Corporate Trusteed contracts, and
may apply under TSA contracts. Loans are not available under University TSA
contracts or under any TSA when the required minimum distribution withdrawal
option has been elected.
We permit only one loan to be outstanding at any time. Before we make a loan you
must properly complete and sign a loan request form. You should read the terms
of the form carefully and consult with a tax adviser before taking out a loan.
In the case of Corporate Trusteed and certain TSA contracts subject to ERISA,
the written consent of your spouse will be required to obtain a loan and the
Plan Administrator needs to sign the loan form. Please see the loan provisions
stated in the contract and the loan request form for more details.
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44 ACCESSING YOUR MONEY
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A loan will not be treated as a taxable distribution unless:
o it exceeds limits of federal income tax rules; or
o interest and principal are not paid when due; or
o in some instances, services with the employer terminates.
Loans under TSA and Corporate Trusteed contracts are discussed further in "Tax
information" later in this prospectus and in "Additional Loan Provisions" in the
SAI. The tax consequences of failure to repay a loan when due are substantial.
WHEN WE MAY TERMINATE YOUR CONTRACT
We may terminate your contract and pay you the account value if:
(1) your account value is less than $500 and you have not made contributions
to your contract for a period of three years; or
(2) you request a partial withdrawal that reduces your account value to an
amount less than $500; or
(3) you have not made any contributions within 120 days from your contract
date.
We will deduct the amount of any outstanding loan balance and any withdrawal
charge that applies to the loan balance from the account value when we terminate
your contract.
TEXAS ORP PARTICIPANTS
For participants in a Texas Optional Retirement Program, Texas law permits
withdrawals only after one of the following distributable events occur:
o turning age 70 1/2; or
o death; or
o retirement; or
o termination of employment in all Texas public institutions of higher
education.
To make a withdrawal, a properly completed written acknowledgment must be
received from the employer. If a distributable event occurs prior to your being
vested, any amounts provided by an employer's first-year matching contribution
will be refunded to the employer. We may change these provisions without your
consent, but only to the extent necessary to maintain compliance with any law
that applies.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity payout option, payment of a death benefit, payment of any
amount withdrawn (less any withdrawal charge) for partial or systematic
withdrawals or contract termination. We may postpone such payments or applying
proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your values in the guaranteed interest
option (other than for death benefits) for up to six months while you are
living. We also may defer payments for a reasonable amount of time (not to
exceed 15 days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
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ACCESSING YOUR MONEY 45
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CHOOSING YOUR ANNUITY PAYOUT OPTIONS
The EQUI-VEST contract offers you several choices for receiving retirement
income. Each choice enables you to receive fixed or, in some cases, variable
annuity payments.
You can choose from among the different forms of annuity payout options listed
below. Restrictions apply, depending on the type of contract you own.
ANNUITY PAYOUT OPTIONS
You can choose from among the following annuity payout options:
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity -- period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain.
o Life annuity -- refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This option does not
guarantee payments for the rest of the annuitant's life. It does not
permit any repayment of the unpaid principal, so you cannot elect to
receive part of the payments as a single sum payment with the rest paid in
monthly annuity payments. Currently, this payout option is available only
as a fixed annuity. This is the normal form of annuity for annuitants in
governmental EDC plans in New York. Life annuity payout options are not
available for governmental EDC plans in New York.
All of the above payout options are available as fixed annuities. With fixed
annuities, we guarantee fixed annuity payments that will be based either on the
tables of guaranteed annuity payments in your contract or on our then current
annuity rates, whichever is more favorable for you.
The life annuity, life annuity -- period certain, and life annuity -- refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
the annuitant's life and, after the annuitant's death, payments continue to the
survivor. Generally, unless the annuitant elects otherwise with the written
consent of the spouse, this will be the normal form of annuity payment for
married annuitants under qualified plans and certain TSAs.
The following annuity payout options are available as variable annuities:
o Life annuity (except in New York).
o Life annuity -- period certain.
o Joint and survivor life annuity (100% to survivor).
o Joint and survivor life period certain annuity (100% to survivor).
Variable annuities may be funded through your choice of variable investment
options investing in Portfolios of The Hudson River Trust. The contract also
offers a fixed annuity payout option which can be elected in combination with
the variable annuity payout options. The amount of each variable annuity payment
will fluctuate, depending upon the performance of the variable investment
options, and whether the actual rate of investment return is higher or lower
than an assumed base rate. Please see "Annuity unit values" in the SAI.
We may offer other payout options not outlined here. Your Equitable associate
can provide details.
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46 ACCESSING YOUR MONEY
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SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. Unless you choose a different
payout option, we will pay annuity payments under a life annuity with a period
certain of 10 years. We require you to return your contract before annuity
payments begin.
You can choose the date annuity payments are to begin. You can change the date
your annuity payments are to begin anytime before that date as long as you do
not choose a date later than the 28th day of any month. Also, that date may not
be later than the contract date anniversary that follows the annuitant's 85th
birthday. This may be different in some states.
Before your annuity payments are to begin, we will notify you by letter that the
annuity payout options are available. Once you have selected a payout option and
payments have begun, no change can be made, other than transfers (if permitted
in the future) among the variable investment options if a variable annuity is
selected.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity, the type of annuity chosen and whether it is fixed or variable,
and, in the case of a life annuity, the annuitant's age (or the annuitant's and
joint annuitant's ages) and in certain instances, the sex of the annuitant(s).
In no event will you ever receive less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less than
$2,000 or the initial payment under the form elected is less than $20 monthly,
we reserve the right to pay the account value in a single sum rather than as
payments under the payout option chosen.
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CHARGES AND EXPENSES 47
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5
Charges and expenses
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit value of each
variable investment option:
o A mortality and expense risk, including a death benefit charge.
o An expense charge.
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o An annual administrative charge.
o Third party transfer or exchange fee (for series 300 and 400 only).
o At the time you make certain withdrawals or surrender your contract, or
your contract is terminated -- a withdrawal charge.
o At the time annuity payments are to begin -- charges for state premium and
other applicable taxes. An annuity administrative fee may also apply.
More information about these charges appears below. The charges differ depending
on which contract series you purchase.
CHARGES UNDER SERIES 300 AND 400 CONTRACTS
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the death benefit.
The daily charge is equivalent to an annual rate of:
o 1.10% of net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity benefits than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. We may
change the actuarial basis for our guaranteed annuity payment tables, but only
for new contributions and only at five year intervals from the contract date.
Lastly, we assume a mortality risk to the extent that at the time of death, the
guaranteed death benefit exceeds the cash value of the contract. In addition, we
waive any withdrawal charge upon payment of a death benefit.
The expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
To the extent that the mortality and expense risk charges are not needed to
cover the actual expenses incurred, they may be considered an indirect
reimbursement for certain sales and promotional expenses relating to the
contracts.
CHARGE FOR OTHER EXPENSES
We deduct this daily charge from the net assets in each variable investment
option. This charge, together with the annual administrative charge described
below, is for providing administrative and financial accounting services under
the contracts. The daily charge is equivalent to a maximum annual rate of 0.25%
of net assets in each variable investment option. Currently, the charge we
deduct for variable investment options other than the Alliance Money Market,
Alliance Common Stock, Alliance Aggressive Stock, and Alliance Balanced options,
is 0.24% of net assets. We may, upon advance notice to you, increase the charge
to 0.25% of net assets for all variable investment options.
MAXIMUM TOTAL CHARGES. The total annual rate for the above charges is 1.35%.
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48 CHARGES AND EXPENSES
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ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on the last business
day of each contract year. We will deduct a pro rata portion of the charge if
you surrender your contract, elect an annuity payout option, or the annuitant
dies during the contract year. During the first two contract years the charge is
equal to $30 or, if less, 2% of your current account value. The charge is $30
for contract years three and later.
The charge is deducted pro rata from the variable investment options and the
guaranteed interest option, unless you tell us otherwise.
We may increase this charge if our administrative costs rise, but the charge
will never exceed $65 annually. We also may waive the administrative charge for
contracts having an account value of a specified amount on the last business day
of each contract year -- currently $25,000 for SEP, SARSEP, and SIMPLE IRA
contracts. We reserve the right to deduct this charge on a quarterly, rather
than annual basis.
CHARGE FOR THIRD PARTY TRANSFER OR EXCHANGE
We impose a charge for making a direct transfer of amounts from your contract to
a third party, or if you request that your contract be exchanged for a contract
issued by another insurance company. In either case, we will deduct from your
account value any withdrawal charge that applies and (except for series 300
contracts in Florida) a charge of $25 for each direct transfer or exchange. We
reserve the right to increase this charge to a maximum of $65.
WITHDRAWAL CHARGE
A withdrawal charge may apply in three circumstances: (1) you make one or more
withdrawals during a contract year; or (2) you terminate your contract; or (3)
we terminate your contract. The amount of the charge will depend on whether the
free withdrawal amount applies, and the availability of one or more exceptions.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of the withdrawal charge from
your account value. Any amount deducted to pay a withdrawal charge is also
subject to a withdrawal charge.
We deduct the withdrawal amount and the withdrawal charge pro rata from the
variable investment options and from the guaranteed interest option. The amount
of the withdrawal charge we deduct is equal to 6% of contributions withdrawn
that were made in the current and five prior contract years. In the case of
terminations, we will pay you the greater of (i) the account value after any
withdrawal charge has been imposed, or (ii) the free withdrawal amount plus 94%
of the remaining account value.
For purposes of calculating the withdrawal charge, amounts withdrawn up to the
free withdrawal amount are not considered a withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge.
We reserve the right to change the amount of the withdrawal charge, but it will
not exceed 6% of the contributions withdrawn. Any change will not be unfairly
discriminatory.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value at the time you request a
withdrawal, minus any other withdrawals made during the contract year.
DEATH OR PURCHASE OF ANNUITY. The withdrawal charge does not apply if:
o the annuitant dies and a death benefit is payable to the beneficiary.
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CHARGES AND EXPENSES 49
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o we receive a properly completed election form providing for the account
value to be used to buy a life contingent annuity payout option.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The withdrawal
charge also does not apply if:
o the annuitant has qualified to receive social security disability benefits
as certified by the Social Security Administration; or
o we receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
o the annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that 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.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a preexisting
condition or a condition that began within 12 months of the contract date. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your Equitable associate can provide more information or you may
contact our Processing Office.
For SEP, SARSEP and SIMPLE IRA contracts the withdrawal charge also does not
apply:
o after six contract years and the annuitant is at least age 59 1/2; or
o if you request a refund of a contribution in excess of amounts allowed to
be contributed under the federal income tax rules within one month of the
date on which you made the contribution.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as premium taxes that may be
imposed in your state. Generally, we deduct the charge from the amount applied
to provide an annuity payout option. The current tax charge that might be
imposed varies by state and ranges from 0% to 2.35% (1% in Puerto Rico and 5% in
the U.S. Virgin Islands).
We reserve the right to deduct any applicable charges for taxes such as premium
taxes from each contribution, or from withdrawals, or for termination of your
contract. If we have deducted any applicable charges from contributions, we will
not deduct a charge for the same taxes later. If, however, an additional tax
charge is later imposed upon us when you make a withdrawal, or your contract is
terminated, or you elect to begin receiving annuity payments, we reserve the
right to deduct a charge at that time.
ANNUITY ADMINISTRATIVE FEE
We generally deduct a fee of up to $350 from the amount to be applied to
purchase a life annuity payout option.
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50 CHARGES AND EXPENSES
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CHARGES UNDER SERIES 100 AND 200 CONTRACTS
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the minimum death
benefit. The daily charge is a percentage of the net assets in each of the
variable investment options. Under series 100 contracts the percentage is
equivalent to an annual rate that will not exceed 0.65%, and 1.15% under series
200 contracts for the Alliance Money Market, Alliance Balanced and Alliance
Common Stock options. The daily charge for all other variable investment options
is equivalent to an annual rate not to exceed 0.50% under series 100 contracts
and 1.09% under series 200 contracts.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity benefits than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly, we
assume a mortality risk to the extent that at the time of death, the guaranteed
death benefit exceeds the cash value of the contract. In addition, we waive any
withdrawal charge upon payment of a death benefit.
The expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
To the extent that the mortality and expense risk charges are not needed to
cover the actual expenses incurred, they may be considered to be an indirect
reimbursement for certain sales and promotional expenses relating to the
contracts.
CHARGE FOR OTHER EXPENSES
We deduct this daily charge from the net assets in each variable investment
option. This charge, together with the annual administrative charge described
below, is for providing administrative and financial accounting services under
the contracts. The daily charge is equivalent to a maximum annual rate of 0.84%
of net assets in each variable investment option under series 100 contracts.
0.60% of this charge is designed to reimburse us for research and development
costs and for administrative expenses that are not covered by the annual
administrative charge described below. The remaining 0.24% is to reimburse us
for the cost of financial accounting services we provide under the contracts.
Under series 200 contracts, the charge for expenses and financial accounting is
0.25% of the net asset value in each variable investment option.
LIMITATION ON CHARGES. For the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options, the combined amount
of the variable investment option charges and The Hudson River Trust charges for
investment advisory fees and direct operating expenses may not exceed a total
annual rate of 1.75% of the value of the assets held in those variable
investment options.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on the last business
day of each contract year. We will deduct a pro rata portion of the charge if
you surrender your contract, elect an annuity payout option, or the annuitant
dies during the contract year. The charge is equal to $30 or, if less, 2% of the
current account value
The charge is deducted pro rata from each investment option in which you have
account value.
For SEP, SARSEP, SIMPLE IRA, Unincorporated Trusteed and Annuitant-Owned HR-10
contracts, if at the end of any contract year your account value is at least
$10,000, we will waive the annual administrative charge.
For TSA, TSA University, EDC and Corporate Trusteed contracts the annual
administrative charge is waived if the account value is at least $25,000 at the
end of the contract year.
WITHDRAWAL CHARGE FOR SERIES 100 AND 200 CONTRACTS
A withdrawal charge may apply in three circumstances: (1) if you make one or
more withdrawals during a contract year;
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CHARGES AND EXPENSES 51
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(2) you terminate your contract; or (3) we terminate your contract. The amount
of the charge will depend on whether the free withdrawal amount applies, and the
availability of one or more exceptions.
For Trusteed and TSA contracts no withdrawal charge will be applied during any
contract year in which the amount withdrawn is less than or equal to 10% of the
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 withdrawal amount. For EDC, SEP, SARSEP and SIMPLE IRA contracts, the free
withdrawal amount is available only after three contract years have been
completed or the annuitant has reached age 59 1/2.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of the withdrawal charge from
your account value. Any amount deducted to pay a withdrawal charge is also
subject to a withdrawal charge.
FOR TRUSTEED CONTRACTS. The amount of the withdrawal charge we deduct is equal
to 6% of contributions withdrawn that were made in the current and five prior
contract years. In the case of terminations, we will pay you the greater of (i)
the account value after any withdrawal charge has been imposed, and after
deducting the amount of any loan balance and accrued interest, or (ii) the free
withdrawal amount plus 94% of the remaining account value. For contracts issued
to annuitants age 60 or older, this percentage will be 95% in the fifth contract
year. For group contracts, there is no reduction in the withdrawal charge for
older annuitants in the fifth and sixth contract year.
For purposes of calculating the withdrawal charge, amounts withdrawn up to the
free withdrawal amount are not considered a withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. See "Tax information."
The withdrawal charge does not apply in the circumstances described below.
For Trusteed contracts the withdrawal charge does not apply if:
o The annuitant dies and a death benefit is payable to the beneficiary.
o We receive a properly completed election form providing for the account
value to be used to buy a life annuity payout option.
o The owner has completed five contract years.
o We receive a request for the refund of an excess contribution within one
month of the date the contribution is made.
FOR SEP, SARSEP, SIMPLE IRA, TSA, EDC AND ANNUITANT-OWNED HR-10 CONTRACTS. The
withdrawal charge equals a percentage of the amount withdrawn, and any TSA
defaulted loans. The percentage that applies depends on the contract year in
which the withdrawal is made, according to the following table:
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CONTRACT
YEAR(S) CHARGE
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1 through 5 6%*
6 through 8 5
9 4
10 3
11 2
12 1
13 and later 0
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* This percentage may be reduced at older ages for certain contract series.
Your Equitable associate can provide further details about the contract
series you own.
The total of all withdrawal charges assessed will not exceed 8% of all
contributions made during the current contract year and the nine contract years
before the withdrawal is made.
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52 CHARGES AND EXPENSES
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The withdrawal charge does not apply in the circumstances described below.
No withdrawal charge applies under SEP, SARSEP, SIMPLE IRA, TSA, EDC or
Annuitant-Owned HR-10 contracts if:
o after five contract years and the annuitant is at least age 59 1/2; or
o you request a refund of an excess contribution within one month of the date
on which the contribution is made; or
o the annuitant dies and the death benefit is made available to the
beneficiary; or
o after five contract years and the annuitant is at least age 55 and the
amount withdrawn is used to purchase from us a period certain annuity that
extends beyond the annuitant's age 59 1/2 and allows no prepayment; or
o after three contract years and the amount withdrawn is used to purchase
from us a period certain annuity for a term of at least 10 years and
allows no prepayment; or
o the amount withdrawn is applied to the election of a life contingent
annuity payout option. (This form of payment is not available for
annuitants in Governmental EDC Plans in New York), or
o the amount withdrawn is applied to the election of a period certain annuity
of at least 15 years, but not in excess of the annuitant's life
expectancy, that allows no prepayment. (This provision is available only
for annuitants in governmental EDC plans in New York.)
No withdrawal charge applies under a TSA contract if:
o The contract owner has completed at least five contract years, has reached
age 55 and has separated from service.
No withdrawal charge applies under a SEP contract funding SARSEP arrangements
if:
o The amount withdrawn is a distribution of deferrals disallowed (plus or
minus any gain or loss) by reason of the employer's failure to meet the
Internal Revenue Code's requirement that 50% of eligible employees elect
SARSEP within the plan year and the request for withdrawal is made by the
April 15th of the calendar year following the calendar year in which you
were notified of such disallowance; or
o The amount withdrawn is an "excess contribution" (as such term is defined
in Section 408(k)(6)(C)(iii) of the Internal Revenue Code), plus or minus
any gain or loss, and the request for withdrawal is made by the April 15th
of the calendar year following the calendar year in which the excess
contributions were made; or
o The amount withdrawn is an "excess deferral" (as such term is defined in
Section 402(g)(2) of the Internal Revenue Code), plus or minus any gain or
loss, and the request for withdrawal is made by the April 15th of the
calendar year following the calendar year in which such excess deferrals
were made.
The tax consequences of withdrawals are discussed under "Tax information."
NY EDC PLANS. As a result of regulations which apply to EDC plans of government
employers in New York ("NY EDC plans"), EQUI-VEST contracts funding NY EDC plans
contain special provisions that apply to all NY EDC plans whose EQUI-VEST
funding arrangements became effective or were renewed on or after July 1, 1989.
These provisions permit the automatic termination of all contracts issued in
connection with a NY EDC plan five years after the effective date (or any
renewal date) of its EQUI-VEST funding arrangement without the deduction of any
contingent withdrawal charges. If agreed to by the employer or plan trustee and
us, the period may be shorter than five years. A decision to permit the
automatic termination of all contracts would result in the transfer of each
contract's account value to a successor funding vehicle designated by the
employer.
The employer sponsoring a NY EDC plan or plan trustee can renew the EQUI-VEST
funding arrangement in a written notice to us which includes a certification of
compliance with
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CHARGES AND EXPENSES 53
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procedures under the applicable regulations. We are not responsible for the
validity of any certification by the employer. A written notice to transfer must
be received by our Processing Office and accepted by us not later than seven
days before the date on which a transfer is to occur. If an employer fails to
notify us in writing as to a transfer of the NY EDC arrangement, or as to its
intention not to renew, we will continue the arrangement and associated
contracts will not be automatically terminated.
No further investment experience, whether positive, or negative, will be
credited under a NY EDC plan contract once the contract terminates. As with
other tax-favored retirement programs in which the funding is affected by
actions of a sponsoring employer, we are not required to provide annuitants with
information relating to an employer's decision to exercise any termination
right.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as premium taxes that may be
imposed in your state. Generally, we deduct the charge from the amount applied
to provide an annuity payout option. The current tax charge that might be
imposed varies by state and ranges from 0% to 2.35% (1% in Puerto Rico and 5% in
the U.S. Virgin Islands).
We reserve the right to deduct any applicable charges for taxes such as premium
taxes from each contribution, or from withdrawals, or for termination of your
contract. If we have deducted any applicable charges from contributions, we will
not deduct a charge for the same taxes later. If, however, an additional tax
charge is later imposed upon us when you make a withdrawal, or your contract is
terminated, or you elect to begin receiving annuity payments, we reserve the
right to deduct a charge at that time.
ANNUITY ADMINISTRATIVE FEE
We generally deduct a fee of up to $350 from the amount to be applied to
purchase a life annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Hudson River Trust and EQ Advisors Trust each deduct charges for the
following types of fees and expenses:
o Investment advisory fees ranging from 0.31% to 1.15%.
o 12b-1 fees of 0.25% applicable to Class IB shares of EQ Advisors Trust.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each Portfolio. Since
shares of each trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges, please
refer to the prospectuses for The Hudson River Trust and EQ Advisors Trust
following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal charge
or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the minimum death benefit or offer
variable investment options that invest in shares of EQ Advisors Trust that are
not subject to the 12b-1 fee. Group arrangements include those in which a
trustee or an employer, for example, purchases contracts covering a group of
individuals on a group basis. Sponsored arrangements include those in which an
employer allows us to sell contracts to its employees or retirees on an
individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced
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54 CHARGES AND EXPENSES
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charges, a group or sponsored arrangement must meet certain requirements, such
as requirements for size and number of years in existence. Group or sponsored
arrangements that have been set up solely to buy contracts or that have been in
existence less than six months will not qualify for reduced charges.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation in the withdrawal charge will reflect differences in costs
or services and will not be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it will be
unfairly discriminatory.
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PAYMENT OF DEATH BENEFIT 55
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6
Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time by writing to our Processing Office. The owner must
be the beneficiary under EDC plan contracts and the trustee must be the
beneficiary under most Trusteed contracts.
The death benefit is equal to your account value, or, if greater, the "minimum
death benefit." The minimum death benefit is equal to your total contributions,
less withdrawals (less any taxes that apply and less any outstanding loan and
accrued interest, if any). We determine the amount of the death benefit as of
the date we receive satisfactory proof of the annuitant's death and any required
instructions for the method of payment.
On the date we determine the death benefit, your account value will be deducted
from the investment options. We will hold this amount in our general account and
credit it with interest at a rate not less than the rate required by law. If you
have transferred the value of another annuity contract that we issue to your
EQUI-VEST contract, the value of the other contract's minimum death benefit
calculated as of the time of the transfer will be included in the total
contributions for the purpose of calculating the minimum death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary who is the surviving spouse of the owner/annuitant can choose to be
treated as the successor owner/annuitant and continue the contract in some
traditional IRAs.
SUCCESSOR OWNER AND ANNUITANT
SERIES 300 AND 400 CONTRACTS ONLY. If you are both the contract owner and the
annuitant, your surviving spouse can automatically become both the successor
annuitant and contract owner if you elect to have your spouse be the sole
primary beneficiary, as well as the successor annuitant and contract owner. In
such a case, no death benefit is payable until your surviving spouse's death.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Choosing your annuity payout options" earlier
in this prospectus. Please note that if you are both the contract owner and the
annuitant, you may elect only a life annuity or an annuity that does not extend
beyond the life expectancy of the beneficiary. Single sum payments generally are
paid through the Equitable Life Access Account(TM), an interest bearing checking
account. Beneficiaries have immediate access to the proceeds by writing a check
on the account. We pay interest from the date the single sum is deposited into
the Access Account until the account is closed.
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56 TAX INFORMATION
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7
Tax information
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TAX INFORMATION AND ERISA MATTERS
SPECIAL RULES FOR TAX-FAVORED RETIREMENT PROGRAMS
Employer-sponsored retirement plans can use annuity contracts to fund the plan
unless the plan specifically prohibits annuity contracts as a funding vehicle.
Federal income tax rules prescribe how a retirement plan qualifies for
tax-favored status and set requirements for plan features, including:
o participation and coverage;
o nondiscrimination;
o vesting and funding;
o limits on contributions, distributions, and benefits;
o withholding;
o reporting and disclosure; and
o penalties.
State income tax rules covering contributions to and distributions from
employer-sponsored retirement programs may differ from federal income tax rules.
Because you are buying a contract to fund a retirement plan that already
provides tax deferral, you should do so for the contract's features and benefits
other than tax deferral. The tax deferral of the contract does not provide
additional benefits.
This section of the prospectus discusses the current Federal income tax rules
that generally apply to an annuity contract purchased to fund a tax-favored
retirement program for these special markets: qualified plan and TSA.
QUALIFIED PLANS
GENERAL; CONTRIBUTIONS
Any type of employer -- corporation, partnership, self-employed individual,
governmental entity, non-profit organization -- is eligible to establish a
qualified retirement plan under Section 401(a) of the Internal Revenue Code for
participating employees. Because there are numerous technical federal income tax
and Department of Labor "DOL" or "ERISA" rules covering establishment and
operation of a qualified plan, we do not cover them in this prospectus.We also
do not cover specific state law or other rules which may govern plans. Employers
should consult their tax advisors for information. It is the employer's
responsibility to figure out whether it is eligible to establish a plan, what
kinds of plan it may establish, and whether an annuity contract may be used as a
funding vehicle.
There are limits on employer and employee contributions to qualified plans.
Violation of contribution limits can result in plan disqualification and
penalties. The annual limits on contributions do not apply to rollover
contributions or trustee-to-trustee transfer contributions which may be
permitted under the plan.
The annual limit of contributions on behalf of an employee to all of the defined
contribution plans of an employer is the lesser of $30,000 or 25% of
compensation or earned income. When figuring out the contribution limit you have
to:
o include reallocated forfeitures and voluntary nondeductible employee
contributions;
o include compensation from the employer in the form of elective deferrals
and excludible contributions under Code Section 457 or "EDC" plans and
"cafeteria" plans. These are plans giving employees a choice between cash
or specified excludible health and welfare benefits;
o disregard compensation or earned income of more than a specified amount.
For 1999, this amount is $160,000. This amount could be adjusted for cost
of living changes in future years.
Special limits on contributions apply to anyone who participates in more than
one qualified plan or who controls another trade or business.
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TAX INFORMATION 57
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There is also an overall limit on the total amount of contributions and benefits
under all tax-favored retirement programs in which a person participates.
"Salary reduction" or "elective deferral" contributions made under a 401(k) plan
or other cash or deferred arrangement are limited to $10,000 in 1999. This
amount may be adjusted for future cost of living changes. This limit applies to
the total of all elective deferrals under all tax-favored plans in which the
individual participates, from all employers, for example, also including salary
reduction contributions under TSAs.
Qualified plans must not discriminate in favor of highly compensated employees.
Special "top heavy" rules apply to plans where more than 60% of the
contributions or benefits are allocated to defined highly compensated employees
known as "key employees." Plan administrators must test compliance with both
nondiscrimination and top heavy rules. 401(k) plans can adopt a "SIMPLE 401(k)"
feature which enables the plan to meet nondiscrimination requirements without
testing. The SIMPLE 401(k) feature requires the 401(k) plan to meet specified
contribution, vesting, and exclusive plan requirements, similar to those
discussed in this section of the prospectus under "SIMPLE IRAs."
TAX-SHELTERED ANNUITY ARRANGEMENTS (TSAS)
GENERAL; SPECIAL EMPLOYER RULES
An employer eligible to maintain a TSA plan (also referred to as a "403(b)"
plan, program, or arrangement) for its employees may make contributions to an
annuity contract purchased for the benefit of the employee. These contributions,
if properly made, will not be currently taxable compensation to the employee.
Moreover, the employee will not be taxed on the earnings in the annuity contract
until he/she takes distributions.
Two different types of employers are eligible to maintain 403(b) plans: public
schools and specified tax-exempt organizations under Section 501(c)(3) of the
Code.
CONTRIBUTIONS TO TSAS
There are three ways you can make contributions to this EQUI-VEST TSA contract:
o annual contributions made through the employer's payroll;
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code; or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
ANNUAL CONTRIBUTIONS. Annual contributions to TSAs made through the employer's
payroll are limited. (Tax-free transfer or tax-deferred rollover contributions
from another 403(b) arrangement are not subject to these annual contribution
limits.) Commonly, some or all of the contributions made to the TSA are made
under a salary reduction agreement between the employee and the employer. These
contributions are called "salary reduction" or "elective deferral"
contributions. However, a TSA can also be wholly or partially funded through
nonelective employer contributions or after-tax employee contributions. To
determine the permissible annual contribution to the participant's TSA, a TSA
plan participant generally must calculate tentative annual contributions under
several formulas.
Generally, the contribution limit is the lowest of the following: (1) the annual
"maximum exclusion allowance" for the employee in Section 403(b)(2) of the Code,
(2) the annual limit on employer contributions to defined contribution plans,
and (3) the annual limit on all elective deferrals.
o The annual maximum exclusion allowance for the employee under Section
403(b)(2) of the Code is 20% of includable compensation times years of
service minus
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58 TAX INFORMATION
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previous contributions to all qualified plans, TSAs and EDC plans in which the
participant participates with this employer.
o The annual limit on employer contributions to defined contribution plans is
the lesser of $30,000 or 25% of compensation, disregarding compensation
over $160,000 in 1999.
o The annual limit on all salary reduction or elective deferral contributions
under all plans of any employer you participate in is generally limited to
$10,000 in 1999. Note, however, that the maximum salary reduction
contribution you can make if you participate in both a 403(b) arrangement
and an EDC plan is limited to the lower maximum allowed under Code Section
457. In 1999, this amount is $8,000. All amounts could be adjusted for
cost of living changes in future years.
Any excess deferral contributions which are not withdrawn by April 15th after
the year of the deferral may cause the contract to fail TSA rules.
Special provisions may allow "catch-up" contributions to compensate for smaller
contributions made in previous years.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS
You may make rollover contributions to your EQUI-VEST TSA contract from TSAs
under Section 403(b) of the Internal Revenue Code. Generally, you may make a
rollover contribution to a TSA when you have a distributable event from an
existing TSA as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a distribution.
We accept direct transfers of TSA funds under Revenue Ruling 90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the EQUI-VEST contract receiving the funds has provisions at least as
restrictive as the source contract.
Before you transfer funds to an EQUI-VEST TSA contract, you may have to obtain
your employer's authorization or demonstrate that you do not need employer
authorization. For example, the transferring TSA may be subject to Title I of
ERISA, if the employer makes matching contributions to salary reduction
contributions made by employees. In that case, the employer must continue to
approve distributions from the plan or contract.
We do not currently accept funds which were ever held in custodial accounts
under Section 403(b)(7) of the Code.
SPECIAL RULE FOR ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS AFTER AGE 70 1/2
Any rollover or direct transfer contribution to an EQUI-VEST TSA must be net of
the required minimum distribution for the tax year if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the EQUI-VEST
TSA.
This rule applies regardless of whether the surce of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from
another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy), if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to
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TAX INFORMATION 59
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the EQUI-VEST TSA. You must also elect or have elected a minimum distribution
calculation method requiring recalculation of your life expectancy (and if
applicable, your spouse's life expectancy) if you elect an annuity payout for
the funds in this contract subsequent to this year.
DISTRIBUTIONS FROM QUALIFIED PLANS AND TSAS
WITHDRAWAL RESTRICTIONS. You may not be able to to withdraw or take payment from
all or part of your TSA or 401(k) qualified plan unless you reach age 59 1/2,
die, become disabled (special federal income tax definition), separate from
service with the employer who provided the funds or suffer financial hardship.
These restrictions apply to salary reduction or elective deferral contributions
and earnings on those contributions. Hardship withdrawals are limited to the
amount of your salary reduction contributions without earnings.
These restrictions do not apply to your account balance attributable to salary
reduction contributions to the TSA contract and earnings on December 31, 1998.
To take advantage of this grandfathering you must properly notify us in writing
at our Processing Office of your December 31, 1988 account balance if you have
qualifying amounts directly transferred to your EQUI-VEST TSA contract from
another TSA in a Revenue Ruling 90-24 transfer.
TAX TREATMENT OF DISTRIBUTIONS FROM QUALIFIED PLANS AND TSAS. Amounts held under
qualified plans and TSAs are generally not subject to federal income tax until
benefits are distributed.
Distributions from qualified plans (but not TSAs) may be eligible for the
special tax treatment accorded lump sum distributions (favorable five-year
averaging, and in certain cases, favorable ten-year averaging and long-term
capital gain treatment). This treatment is not available unless the balance to
the credit of a plan participant who has participated in the plan for at least
five years is paid to the recipient within one taxable year, and is payable (i)
after the participant attains age 59 1/2 or (ii) on account of the
participant's (a) death, (b) separation from service (not applicable to
self-employed individuals), or (c) disability (applicable only to self-employed
individuals). Five year averaging will be eliminated effective January 1, 2000.
Distributions include withdrawals and annuity payments. Death benefits paid to a
beneficiary are also taxable distributions. Unless an exception applies, amounts
distributed from qualified plans and TSAs are includable in gross income as
ordinary income, not capital gain. Distributions from qualified plans and TSAs
may be subject to 20% federal income tax withholding. See "Federal and state
income tax withholding and information reporting" below. In addition, qualified
plan and TSA distributions may be subject to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your
qualified plan or TSA contract, which will be recovered tax-free. Since we do
not track your investment in the contract, if any, it is your responsibility to
determine how much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will report
the total amount of the distribution. The amount of any partial distribution
from a qualified plan or TSA prior to the annuity starting date is generally
taxable, except to the extent that the distribution is treated as a withdrawal
of after-tax contributions. Distributions are normally treated as pro rata
withdrawals of after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, the nontaxable portion
of each payment is calculated by dividing your investment in the contract by an
expected return determined under an IRS table prescribed for qualified
annuities. The balance of each payment is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed on
your (or your beneficiary's) final tax return.
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60 TAX INFORMATION
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PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a qualified plan or TSA generally receive the
same tax treatment as distributions during your lifetime. In some instances,
distributions from a qualified plan or TSA made to your surviving spouse may be
rolled over to a traditional IRA.
LOANS FROM QUALIFIED PLANS AND TSAS
If the plan permits, loans are available from a qualfied plan or TSA plan. Loans
are subject to federal income tax limits and may also be subject to the limits
of the plan from which the funds came. Federal income tax rule requirements
apply even if the plan is not subject to ERISA.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. Under Proposed Treasury Regulations
the entire unpaid balance of the loan is includable in income in the year of the
default. In addition, the 10% early distribution penalty tax may apply. The
amount of the unpaid loan balance is reported to the IRS on Form 1099-R as a
distribution. Finally, unpaid loans may become taxable when the individual
separates from service.
o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of (1) the greater of $10,000 or 50% of the participant's
nonforfeitable accrued benefits, (2) $50,000 reduced by the excess (if
any) of the highest outstanding loan balance over the previous twelve
months over the outstanding loan balance of plan loans on the date the
loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. EQUI-VEST TSA
contracts have a term limit of 10 years for loans used to acquire the
participant's primary residence.
o All principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a qualified plan or
TSA into another eligible retirement plan, either as a direct rollover or as a
rollover you do yourself within 60 days of your receiving the distribution. To
the extent rolled over, it remains tax-deferred.
You may roll over a distribution from a qualified plan or TSA to another
qualified plan or TSA or to a traditional IRA. A spousal beneficiary may roll
over death benefits only to a traditional IRA. You cannot roll over funds from a
TSA to a qualified plan or from a qualified plan to a TSA.
The taxable portion of most distributions will be eligible for rollover.
However, federal income tax rules exclude certain distributions from rollover
treatment including (1) periodic payments for life or for a period of 10 years
or more, (2) hardship withdrawals, and (3) any required minimum distributions
under federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling 90-24
are not distributions.
DISTRIBUTION REQUIREMENTS
Qualified plans and TSAs are subject to required minimum distribution rules. See
"Required minimum distribution."
SPOUSAL CONSENT RULES
If ERISA rules apply to your qualified plan or TSA you will need to get spousal
consent for loans, withdrawals, or other distributions if you are married when
you request a withdrawal type transaction under the TSA contract. In addition,
unless you elect otherwise with the written consent of your spouse, the
retirement benefits payable under the plan must be paid in the form of a
qualified joint and
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TAX INFORMATION 61
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survivor annuity. A qualified joint and survivor annuity is payable for the life
of the annuitant with a survivor annuity for the life of the spouse in an amount
not less than one-half of the amount payable to the annuitant during his or her
lifetime. In addition, if you are married, the beneficiary must be your spouse,
unless your spouse consents in writing to the designation of another
beneficiary.
If you are married and you die before annuity payments have begun, payments will
be made to your surviving spouse in the form of a life annuity unless at the
time of your death a contrary election was in effect. However, your surviving
spouse may elect, before payments begin, to receive payments in any form
permitted under the terms of the employer's plan and the contract.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a qualified plan or TSA before you reach age 59 1/2. This is
in addition to any income tax. There are exceptions to the extra penalty tax. No
penalty tax applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your
life (or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
SIMPLIFIED EMPLOYEE PENSIONS (SEPS)
An employer can establish a SEP plan for its employees and can make
contributions to a contract for each eligible employee. A SEP IRA contract is a
form of traditional IRA contract, owned by the employee-annuitant and most of
the rules which apply to traditional IRAs apply. See "Traditional Individual
Retirement Annuities (Traditional IRAs)" later in this prospectus. A major
difference is the amount of permissible contributions. Rules similar to those
discussed above under "Qualified Plans General; Contributions" apply. In 1999 an
employer can annually contribute an amount for an employee up to the lesser of
$24,000 or 15% of the employee's compensation. This amount may be adjusted for
cost of living changes in future years. In figuring out compensation you exclude
the employer's contribution to the SEP. Under our current practice, regular
traditional IRA contributions by the employee may not be made under a SEP IRA
contract and are put into a separate traditional IRA contract.
Salary reduction SEP (SARSEP) plans may no longer be established for years
beginning after December 31, 1996. However, employers who had established SARSEP
plans prior to 1997 can continue to make contributions on behalf of
participating employees for 1997 and later years. SARSEP plans are subject to a
number of special rules, some of which are discussed in the SAI.
SEP plans are available under EQUI-VEST Series 300 in most states. EQUI-VEST SEP
Series 200 are available in states where the 300 Series is not available.
SIMPLE IRAS (SAVINGS INCENTIVE MATCH PLAN)
An eligible employer may establish a "SIMPLE IRA" plan to make contributions to
special individual retirement accounts or individual retirement annuities for
its employees ("SIMPLE IRAs"). The IRS has issued various forms which may be
used by employers to set up a SIMPLE IRA plan. Currently, we are accepting only
those SIMPLE IRA plans using IRS Form 5304-SIMPLE. Use of Form 5304-SIMPLE
requires that the employer permit the employee to select a SIMPLE IRA provider.
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62 TAX INFORMATION
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The employer cannot maintain any other qualified plan, SEP plan or TSA
arrangement if it makes contributions under a SIMPLE IRA plan. (Eligible
employers may maintain EDC plans.)
Any type of employer -- corporation, partnership, self-employed person,
government or tax-exempt entity -- is eligible to establish a SIMPLE IRA plan if
it meets the requirements about number of employees and compensation of those
employees.
It is the responsibility of the employer to determine whether it is eligible to
establish a SIMPLE IRA plan and whether such plan is appropriate.
The employer must have no more than 100 employees who earned at least $5,000 in
compensation from the employer in the prior calendar year.
An employer establishing a SIMPLE IRA plan should consult its tax adviser
concerning the various technical rules applicable to establishing and
maintaining SIMPLE IRA plans. For example, the definition of employee's
"compensation" may vary depending on whether it is used in the context of
employer eligibility, employee participation, and employee or employer
contributions.
Participation must be open to all employees who received at least $5,000 in
compensation from the employer in any two preceding years (they do not have to
be consecutive years) and who are reasonably expected to receive at least $5,000
in compensation during the year. (Certain collective bargaining unit and alien
employees may be excluded.)
The only kinds of contributions which may be made to a SIMPLE IRA are (i)
contributions under a salary reduction agreement entered into between the
employer and the participating employee and (ii) required employer contributions
(employer matching contributions or employer nonelective contributions). (Direct
transfer and rollover contributions from other SIMPLE IRAs, but not traditional
IRAs or Roth IRAs, may also be made.) Salary reduction contributions can be any
percentage of compensation (or a specific dollar amount, if the employer's plan
permits) but are limited to $6,000 in 1999. The $6,000 elective deferral limit
may be indexed for cost of living adjustments in future years.
Generally, the employer is required to make matching contributions on behalf of
each eligible employee in an amount equal to the salary reduction contributions,
up to 3% of the employee's compensation. In certain circumstances, an employer
may elect to make required employer contributions on an alternate basis.
Employer matching contributions to a SIMPLE IRA for self-employed individuals
are treated the same as matching contributions for employees. (They are not
subject to the elective deferral limits.)
TAX TREATMENT OF SIMPLE IRAS
Unless specifically otherwise mentioned, for example, regarding differences in
funding and potential penalty tax on distributions, the rules which apply to
traditional IRAs also apply to SIMPLE IRAs. See "Traditional Individual
Retirement Annuities (Traditional IRAs)" later in this prospectus.
Amounts contributed to SIMPLE IRAs are not currently taxable to employees. Only
the employer can deduct SIMPLE IRA contributions, not the employee. An employee
eligible to participate in a SIMPLE IRA is treated as an active participant in
an employer plan and thus may not be able to deduct (fully) regular
contributions to his/her own traditional IRA.
As with traditional IRAs in general, contributions and earnings accumulate tax
deferred until withdrawn and are then fully taxable. There are no withdrawal
restrictions applicable to SIMPLE IRAs. However, because of the level of
employer involvement, SIMPLE IRA plans are subject to ERISA. See the rules under
"ERISA Matters" below.
Amounts withdrawn from a SIMPLE IRA can always be rolled over to another SIMPLE
IRA and, within limits, to a traditional IRA or Roth IRA. No rollovers from a
SIMPLE IRA to a traditional IRA or a Roth IRA are permitted for individuals
under age 59 1/2 who have not participated in the employer's SIMPLE IRA plan
for two full years. Also, for such individuals, any amounts withdrawn from a
SIMPLE IRA are
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TAX INFORMATION 63
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not only fully taxable but are subject to a 25% (not 10%) additional federal
income tax penalty. (The exceptions for death, disability, etc. apply.)
SIMPLE IRA plans are available under EQUI-VEST Series 400 in most states.
EQUI-VEST SIMPLE IRA Series 300 and Series 200 are available in states where
Series 400 is not available.
PUBLIC AND TAX-EXEMPT ORGANIZATION EMPLOYEE DEFERRED COMPENSATION PLANS (EDC
PLANS)
SPECIAL EMPLOYER AND OWNERSHIP RULES. Employers eligible to maintain EDC plans
are governmental entities such as states, municipalities, and state agencies
(governmental employer) or tax-exempt entities (tax-exempt employer).
Participation in an EDC plan of a tax-exempt employer is limited to a select
group of management or highly compensated employees because of ERISA rules that
do not apply to governmental employer plans.
An employer can fund its EDC plan in whole or in part with annuity contracts
purchased for participating employees and their beneficiaries. These employees
do not have to include in income the employer's contributions to purchase the
EDC contracts or any earnings until they receive or are entitled to receive
funds from the EDC plan. The EDC plan funds are subject to the claims of the
employer's general creditors in an EDC plan maintained by a tax-exempt employer.
In an EDC plan maintained by a governmental employer, the plan's assets must be
held in trust for the exclusive benefit of employees. An annuity contract can be
a trust equivalent if the contract includes the trust rules. Regardless of
contract ownership, the EDC plan may permit the employee to choose among various
investment options.
CONTRIBUTION LIMITS. Although an EDC plan is not a qualified plan, a number of
federal income tax rules for qualified plans apply, such as limits on
contributions. Generally, the maximum contribution amount that can be excluded
from gross income in any tax year under an EDC plan is 33 1/3% of the
employee's "includable compensation," up to a specified maximum. In 1999, the
maximum contribution amount is $8,000. This amount could be adjusted for cost of
living changes in future years. Special rules may permit "catch-up"
contributions during the three years preceding normal retirement age under the
EDC plan.
WITHDRAWAL LIMITS. In general, no amounts may be withdrawn from an EDC plan
prior to the calendar year in which the employee attains age 70 1/2, separates
from service with the employer or in the event of an unforeseen emergency.
Income or gains on contributions under an EDC plan are subject to federal income
tax when amounts are distributed or made available to the employee or
beneficiary. Small amounts (up to $5000) may be taken out by the employee or
forced out by the plan under certain circumstances, even though the employee may
still be working and amounts would not otherwise be made available.
DISTRIBUTION REQUIREMENTS. EDC plans are subject to minimum distribution rules
similar to those that apply to qualified plans. See "Required minimum
distributions" in this section. That is, distributions from EDC plans generally
must start no later than April 1st of the calendar year following the calendar
year in which the employee attains age 70 1/2 or retires from service with the
employer maintaining the EDC plan, whichever is later. Failure to make required
distributions may cause the disqualification of the EDC plan. Disqualification
may result in current taxation of EDC plan benefits. In addition, a 50% penalty
tax is imposed on the difference between the required distribution amount and
the amount actually distributed, if any. It is the plan administrator's
responsibility to see that minimum distributions from an EDC plan are made.
If the EDC plan provides, a deceased employee's beneficiary may be able to elect
to receive death benefits in installments instead of a lump sum, and the
payments will be taxed as they are received. However, the death benefits must be
received within 15 years of the date of the deceased employee's death (or within
the period of the life expectancy of the surviving spouse if the spouse is the
designated beneficiary).
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64 TAX INFORMATION
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TAX TREATMENT OF DISTRIBUTIONS. Distributions from an EDC plan may not be rolled
over or transferred to any kind of IRA.
Distributions to an EDC plan participant are characterized as "wages" for income
tax reporting and withholding purposes. No election out of withholding is
possible. See "Federal and state income tax withholding and information
reporting" in this section. Withholding on wages is the employer's
responsibility. Distributions from an EDC plan are not subject to FICA tax, if
FICA tax was withheld by the employer when wages were deferred. In certain
circumstances, receipt of payments from an EDC plan may result in a reduction of
an employee's Social Security benefits.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
This part of the prospectus contains the information that the IRS requires you
to have before you purchase an IRA, and covers some of the special tax rules
that apply to IRAs.
Your ownership interest in the IRA cannot be forfeited. You or your
beneficiaries who survive you are the only ones who can receive the IRA's
benefits or payments.
If you own multiple IRAs, including IRAs funded by or through your employer, you
may be required to combine IRA values or contributions for tax purposes. For
further information about individual retirement arrangements, you can read
Internal Revenue Service Publication 590 ("Individual Retirement Arrangements
(IRAs)"). This publication is usually updated annually, and can be obtained from
any IRS district office or the IRS website (www.irs.ustreas.gov).
The EQUI-VEST SEP and SIMPLE IRA contracts have been approved by the IRS as to
form for use as a traditional IRA. This IRS approval is a determination only as
to the form of the annuity. It does not represent a determination of the merits
of the annuity as an investment. The IRS approval does not address every feature
possibly available under the EQUI-VEST SEP, SARSEP and SIMPLE IRA contracts.
CANCELLATION
You can cancel an EQUI-VEST IRA contract by following the directions under "Your
right to cancel within a certain number of days" earlier in the prospectus. If
you cancel a contract, we may have to withhold tax, and we must report the
transaction to the IRS. A contract cancellation could have an unfavorable tax
impact.
CONTRIBUTIONS
As SEP, SARSEP and SIMPLE IRAs are employer funded vehicles the employee does
not make regular contributions to their contracts other than through the
employer. However, an employee can make rollover or transfer contributions to
these SEP-IRA, SARSEP-IRAs, and SIMPLE-IRAs.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
You may also change your mind about amounts contributed as Roth IRA funds back
to SEP IRA or SIMPLE IRA funds, in accordance with special federal income tax
rules, if you use the forms we prescribe. This is referred to as having
"recharacterized" your contribution.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll it over
to a traditional IRA within 60 days after
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TAX INFORMATION 65
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- --------------------------------------------------------------------------------
the date you receive the funds. The distribution from your qualified plan or TSA
will be net of 20% mandatory federal income tax withholding. If you want, you
can replace the withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to send
the distribution directly to your traditional IRA issuer. Direct rollovers are
not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of
you and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions which fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are examples
of excess contributions to IRAs:
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution before the
due date (including extensions) for filing your federal income tax return for
the year. You do not have to include the excess contribution withdrawn as part
of your income. It is also not subject to the 10% additional penalty tax on
early distributions discussed below under "Early distribution penalty tax." You
do have to withdraw any earnings that are attributed to the excess contribution.
The withdrawn earnings would be included in your gross income and could be
subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
<PAGE>
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66 TAX INFORMATION
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(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS
You can withdraw any or all of your funds from a traditional IRA at any time.
You do not need to wait for a special event like retirement.
TAXATION OF PAYMENTS
Earnings in traditional IRAs are not subject to federal income tax until you or
your beneficiary receives them. Taxable payments or distributions include
withdrawals from your contract, surrender of your contract and annuity payments
from your contract. Death benefits are also taxable. The conversion of amounts
from a SEP IRA, SARSEP IRA or SIMPLE IRA (after two plan participant years) to a
Roth IRA is taxable. Generally, the total amount of any distribution from a
traditional IRA must be included in your gross income as ordinary income.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above).
Distributions from a traditional IRA are not eligible for favorable five-year
averaging (or, in some cases, ten-year averaging and long-term capital gain
treatment) available to certain distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
Traditional IRAs are subject to required minimum distribution rules described
below in "Required minimum distributions."
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA as
collateral for a loan or other obligation. If you borrow against your IRA or use
it as collateral, its tax-favored status will be lost as of the first day of the
tax year in which this prohibited event occurs. If this happens, you must
include the value of the traditional IRA in your federal gross income. Also, the
early distribution penalty tax of 10% will apply if you have not reached age
59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/21/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o to pay certain first-time home buyer expenses (special federal income tax
definition); or
o to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made
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TAX INFORMATION 67
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at least annually over your life (or your life expectancy), or over the joint
lives of you and your beneficiary (or your joint life expectancy) using an
IRS-approved distribution method.
ILLUSTRATION OF GUARANTEED INTEREST RATES
In the following two tables, we provide information that the IRS requires us to
furnish to prospective IRA contract owners. In the tables we illustrate the 3%
minimum guaranteed interest rate for contributions we assume are allocated
entirely to the guaranteed interest option under series 300 and 400 contracts.
In Table I we assume a $1,000 contribution made annually on the contract date
and on each anniversary after that. We assume no withdrawals or transfers were
made under the contract. In Table II we assume a single initial contribution of
$1,000, and no additional contributions. We also assume no withdrawals or
transfers. The 3% guaranteed interest rate is in the contract.
The values shown assume the withdrawal charge applies. These values reflect the
effect of the annual administrative charge deducted at the end of each contract
year in which the account value is less than $20,000.
To find the appropriate value for the end of the contract year at any particular
age, you subtract the age (nearest birthday) at issue of the contract from the
current age and find the corresponding year in the table. Years that correspond
to a current age over 70, should be ignored.
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68 TAX INFORMATION
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You should consider the information shown in the tables in light of your present
age. Also, with respect to Table I, you should consider your ability to
contribute $1,000 annually. Any change in the amounts contributed annually, or
in the amount of the single contribution would, of course, change the results
shown.
TABLE I
ACCOUNT VALUES AND
CASH VALUES
(assuming $1,000 contributions made annually
at the beginning of the contract year)
- -----------------------------------------------
3% MINIMUM GUARANTEE
- -----------------------------------------------
CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- -----------------------------------------------
1 $ 1,009.40 $ 954.89
- -----------------------------------------------
2 $ 2,039.68 $ 1,929.54
- -----------------------------------------------
3 $ 3,100.87 $ 2,933.43
- -----------------------------------------------
4 $ 4,193.90 $ 3,967.43
- -----------------------------------------------
5 $ 5,319.72 $ 5,032.45
- -----------------------------------------------
6 $ 6,479.31 $ 6,129.42
- -----------------------------------------------
7 $ 7,673.69 $ 7,313.69
- -----------------------------------------------
8 $ 8,903.90 $ 8,543.90
- -----------------------------------------------
9 $ 10,171.01 $ 9,811.01
- -----------------------------------------------
10 $ 11,476.14 $ 11,116.14
- -----------------------------------------------
11 $ 12,820.43 $ 12,460.43
- -----------------------------------------------
12 $ 14,205.04 $ 13,845.04
- -----------------------------------------------
13 $ 15,631.19 $ 15,271.19
- -----------------------------------------------
14 $ 17,100.13 $ 16,740.13
- -----------------------------------------------
15 $ 18,613.13 $ 18,253.13
- -----------------------------------------------
16 $ 20,201.53 $ 19,841.53
- -----------------------------------------------
17 $ 21,837.57 $ 21,477.57
- -----------------------------------------------
18 $ 23,522.70 $ 23,162.70
- -----------------------------------------------
19 $ 25,258.38 $ 24,898.38
- -----------------------------------------------
20 $ 27,046.13 $ 26,686.13
- -----------------------------------------------
21 $ 28,887.52 $ 28,527.52
- -----------------------------------------------
22 $ 30,784.14 $ 30,424.14
- -----------------------------------------------
23 $ 32,737.67 $ 32,377.67
- -----------------------------------------------
24 $ 34,749.80 $ 34,389.80
- -----------------------------------------------
25 $ 36,822.29 $ 36,462.29
- -----------------------------------------------
- -----------------------------------------------
3% MINIMUM GUARANTEE
- -----------------------------------------------
CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- -----------------------------------------------
26 $ 38,956.96 $ 38,596.96
- -----------------------------------------------
27 $ 41,155.67 $ 40,795.67
- -----------------------------------------------
28 $ 43,420.34 $ 43,060.34
- -----------------------------------------------
29 $ 45,752.95 $ 45,392.95
- -----------------------------------------------
30 $ 48,155.53 $ 47,795.53
- -----------------------------------------------
31 $ 50,630.20 $ 50,270.20
- -----------------------------------------------
32 $ 53,179.11 $ 52,819.11
- -----------------------------------------------
33 $ 55,804.48 $ 55,444.48
- -----------------------------------------------
34 $ 58,508.61 $ 58,148.61
- -----------------------------------------------
35 $ 61,293.87 $ 60,933.87
- -----------------------------------------------
36 $ 64,162.69 $ 63,802.69
- -----------------------------------------------
37 $ 67,117.57 $ 66,757.57
- -----------------------------------------------
38 $ 70,161.10 $ 69,801.10
- -----------------------------------------------
39 $ 73,295.93 $ 72,935.93
- -----------------------------------------------
40 $ 76,524.81 $ 76,164.81
- -----------------------------------------------
41 $ 79,850.55 $ 79,490.55
- -----------------------------------------------
42 $ 83,276.07 $ 82,916.07
- -----------------------------------------------
43 $ 86,804.35 $ 86,444.35
- -----------------------------------------------
44 $ 90,438.48 $ 90,078.48
- -----------------------------------------------
45 $ 94,181.64 $ 93,821.64
- -----------------------------------------------
46 $ 98,037.08 $ 97,677.08
- -----------------------------------------------
47 $ 102,008.20 $ 101,648.20
- -----------------------------------------------
48 $ 106,098.44 $ 105,738.44
- -----------------------------------------------
49 $ 110,311.40 $ 109,951.40
- -----------------------------------------------
50 $ 114,650.74 $ 114,290.74
- -----------------------------------------------
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TAX INFORMATION 69
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TABLE II
ACCOUNT VALUES AND
CASH VALUES
(assuming a single contribution of $1,000 and
no further contribution)
- -----------------------------------------------
3% MINIMUM GUARANTEE
- -----------------------------------------------
CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- -----------------------------------------------
1 $1,009.40 $ 954.89
- -----------------------------------------------
2 $1,018.89 $ 963.87
- -----------------------------------------------
3 $1,019.46 $ 964.40
- -----------------------------------------------
4 $1,020.04 $ 964.96
- -----------------------------------------------
5 $1,020.64 $ 965.53
- -----------------------------------------------
6 $1,021.26 $ 966.11
- -----------------------------------------------
7 $1,021.90 $1,021.90
- -----------------------------------------------
8 $1,022.55 $1,022.55
- -----------------------------------------------
9 $1,023.23 $1,023.23
- -----------------------------------------------
10 $1,023.93 $1,023.93
- -----------------------------------------------
11 $1,024.65 $1,024.65
- -----------------------------------------------
12 $1,025.38 $1,025.38
- -----------------------------------------------
13 $1,026.15 $1,026.15
- -----------------------------------------------
14 $1,026.93 $1,026.93
- -----------------------------------------------
15 $1,027.74 $1,027.74
- -----------------------------------------------
16 $1,028.57 $1,028.57
- -----------------------------------------------
17 $1,029.43 $1,029.43
- -----------------------------------------------
18 $1,030.31 $1,030.31
- -----------------------------------------------
19 $1,031.22 $1,031.22
- -----------------------------------------------
20 $1,032.16 $1,032.16
- -----------------------------------------------
21 $1,033.12 $1,033.12
- -----------------------------------------------
22 $1,034.11 $1,034.11
- -----------------------------------------------
23 $1,035.14 $1,035.14
- -----------------------------------------------
24 $1,036.19 $1,036.19
- -----------------------------------------------
25 $1,037.28 $1,037.28
- -----------------------------------------------
- -----------------------------------------------
3% MINIMUM GUARANTEE
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CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- -----------------------------------------------
26 $1,038.40 $1,038.40
- -----------------------------------------------
27 $1,039.55 $1,039.55
- -----------------------------------------------
28 $1,040.73 $1,040.73
- -----------------------------------------------
29 $1,041.96 $1,041.96
- -----------------------------------------------
30 $1,043.22 $1,043.22
- -----------------------------------------------
31 $1,044.51 $1,044.51
- -----------------------------------------------
32 $1,045.85 $1,045.85
- -----------------------------------------------
33 $1,047.22 $1,047.22
- -----------------------------------------------
34 $1,048.64 $1,048.64
- -----------------------------------------------
35 $1,050.10 $1,050.10
- -----------------------------------------------
36 $1,051.60 $1,051.60
- -----------------------------------------------
37 $1,053.15 $1,053.15
- -----------------------------------------------
38 $1,054.74 $1,054.74
- -----------------------------------------------
39 $1,056.39 $1,056.39
- -----------------------------------------------
40 $1,058.08 $1,058.08
- -----------------------------------------------
41 $1,059.82 $1,059.82
- -----------------------------------------------
42 $1,061.61 $1,061.61
- -----------------------------------------------
43 $1,063.46 $1,063.46
- -----------------------------------------------
44 $1,065.37 $1,065.37
- -----------------------------------------------
45 $1,067.33 $1,067.33
- -----------------------------------------------
46 $1,069.35 $1,069.35
- -----------------------------------------------
47 $1,071.43 $1,071.43
- -----------------------------------------------
48 $1,073.57 $1,073.57
- -----------------------------------------------
49 $1,075.78 $1,075.78
- -----------------------------------------------
50 $1,078.05 $1,078.05
- -----------------------------------------------
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REQUIRED MINIMUM DISTRIBUTIONS
If you are a participant in a qualified retirement plan, EDC plan, or own a TSA
or traditional IRA, including SEP, SARSEP or SIMPLE IRA, the required minimum
distribution rules force you to start calculating and taking annual
distributions from these tax-favored retirement plans and arrangements by a
specified date. The beginning date depends on the type of plan or arrangement,
and your age and retirement status. The distribution requirements are designed
to use up your interest in the plan over your life expectancy. Whether the
correct amount has been distributed is calculated on a year-by-year basis; there
are no provisions to allow amounts taken in excess of the required amount to be
carried back to other years.
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS -- WHEN YOU HAVE TO TAKE THE FIRST
REQUIRED MINIMUM DISTRIBUTION
You must start taking annual distributions from your traditional IRAs beginning
at age 70 1/2.
Generally, you must take the first required minimum distribution for the
calendar year in which you turn age 70 1/2. Qualified plan, TSA and EDC
participants may be able to delay the start of required minimum distributions
for all or part of your account balance until after age 70 1/2, as follows:
o For qualifed plan, TSA and EDC participants who have not retired from
service with the employer who provided the funds for this qualified plan,
TSA, or EDC contract by the calendar year the participant turns age
70 1/2, the required beginning date for minimum distributions is extended
to April 1st following the calendar year of retirement. Note that this
rule does not apply to qualified plan participants who are 5% owners.
o TSA plan participants may also delay the start of required minimum
distributions to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age
70 1/2.
The first required minimum distribution is for the calendar year in which you
turn age 70 1/2, or the year you retire if you are eligible for the delayed
start rule. You have the choice to take this first required minimum distribution
during the calendar year you turn 70 1/2 or retire, or to delay taking it until
the first three-month period in the next calendar year (January 1 - April 1).
Distributions must start no later than your "Required Beginning Date," which is
April 1st of the calendar year after the calendar year in which you turn age 70
1/2 or retire if you are eligible for the delayed start rule. If you choose to
delay taking the first annual minimum distribution, then you will have to take
two minimum distributions in that year -- the delayed one for the first year and
the one actually for that year. Once minimum distributions begin, they must be
made at some time each year.
HOW YOU CALCULATE REQUIRED MINIMUM DISTRIBUTIONS
There are two approaches to taking required minimum distributions --
"account-based" or "annuity-based."
ACCOUNT-BASED METHOD. If you choose an "account-based" method, you divide the
value of your qualified plan, TSA, EDC, or traditional IRA as of December 31st
of the past calendar year by a life expectancy factor from IRS tables. This
account balance gives you the required minimum distribution amount for that
particular plan or arrangement for that year. The required minimum distribution
amount will vary each year as the account value and your life expectancy factors
change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of you
and another individual. You can decide to "recalculate" your life expectancy
every year by using your current life expectancy factor. You can decide instead
to use the "term certain" method, where you reduce your life expectancy by one
every year after the initial year. If your spouse is your designated beneficiary
for the purpose of calculating annual account-based required minimum
distributions, you can also annually "recalculate" your spouse's life expectancy
if you want. If you choose someone who is not your spouse as your designated
beneficiary for the purpose of calculating annual account-based required minimum
distributions, you have to
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use the "term certain" method of calculating that person's life expectancy. If
you pick a nonspouse designated beneficiary, you may also have to do another
special calculation.
You can later apply your traditional IRA or TSA funds to a life annuity-based
payout. You can only do this if you already chose to recalculate your life
expectancy annually (and your spouse's life expectancy if you select a spousal
joint annuity). For example, if you anticipate selecting a form of life annuity
payout after you are age 70 1/2, you must have elected to recalculate life
expectancies.
If the qualified plan or EDC plan permits, you may also be able to select an
account based withdrawal method followed by a life annuity payout if you elect
to recalculate life expectancies.
ANNUITY-BASED METHOD. If you choose an annuity-based method you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS?
No. If you want, you can choose a different method and a different beneficiary
for each of your traditional IRAs and other retirement plans. For example, you
can choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE?
No, unless you affirmatively select an annuity payout option or an account-based
withdrawal option such as our minimum distribution withdrawal option. Because
the options we offer do not cover every option permitted under federal income
tax rules, you may prefer to do your own required minimum distribution
calculations for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR?
The required minimum distribution amount for your traditional IRAs is calculated
on a year-by-year basis. There are no carry-back or carry-forward provisions.
Also, you cannot apply required minimum distribution amounts you take from your
qualified plans to the amounts you have to take from your traditional IRAs and
vice-versa. However, the IRS will let you calculate the required minimum
distribution for each traditional IRA or TSA that you maintain, using the method
that you picked for that particular IRA or TSA. You can add these required
minimum distribution amount calculations together. As long as the total amount
you take out every year satisfies your overall traditional IRA or TSA required
minimum distribution amount, you may choose to take your annual required minimum
distribution from any one or more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR?
Your plan or arrangement could be disqualified, and you could have to pay tax on
the entire value. Even if your plan or arrangement is not disqualified, you
could have to pay a 50% penalty tax on the shortfall (required amount less
amount actually taken). It is your responsibility to meet the required minimum
distribution rules. We will remind you when our records show that your age
70 1/2 is approaching. If this is an IRA or TSA and you do not select a method
with us, we will assume you are taking your required minimum distribution from
another traditional IRA or TSA that you own. Note that in the case of a
qualified plan or EDC the distribution must be taken annually.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE?
If you die after either (a) the start of annuity payments, or (b) your required
beginning date, your beneficiary must receive payment of the remaining values in
the contract at least as rapidly as under the distribution method before your
death.
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72 TAX INFORMATION
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In some circumstances, your surviving spouse may elect to become the owner of
your traditional IRA and halt distributions until he or she reaches age 70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain that
does not extend beyond the beneficiary's life expectancy are also permitted, if
these payments start within one year of your death. A surviving spouse
beneficiary can also (a) delay starting any payments until you would have
reached age 70 1/2 or (b) roll over your qualified plan, TSA, or traditional
IRA into his or her own traditional IRA.
SPECIAL EDC MINIMUM DISTRIBUTION RULES
Any distribution payable over a period of more than one year must be paid at
least annually and must be substantially nonincreasing. If an EDC plan
participant dies before the Required Beginning Date, then required minimum
distributions made after death must be paid over a period of not more than 15
years. If the surviving spouse is the beneficiary, these required minimum
distributions may be paid over the life expectancy period of the spouse.
Rollovers to traditional IRAs are not permitted.
ERISA MATTERS
ERISA rules are designed to save and protect qualified retirement plan assets to
be paid to plan participants when they retire.
Qualified plans under Section 401 of the Internal Revenue Code are generally
subject to ERISA. Some TSAs may be subject to Title I of ERISA, generally
dependent on the level of employer involvement, for example, if the employer
makes matching contributions.
In addition, certain loan rules apply only to loans under ERISA plans:
o For contracts which are subject to ERISA, the trustee or sponsoring
employer is responsible for insuring that any loan meets applicable
Department of Labor (DOL) requirements. It is the responsibility of the
plan administrator, the trustee of the qualified plan and/or the employer,
and not Equitable Life, to properly administer any loan made to plan
participants.
o With respect to specific loans made by the plan to a plan participant, the
plan administrator determines the interest rate, the maximum term
consistent with EQUI-VEST Processing and all other terms and conditions of
the loan.
o Only 50% of the participant's vested account balance may serve as security
for a loan. To the extent that a participant borrows an amount which
should be secured by more than 50% of the participant's vested account
balance, it is the responsibility of the trustee or plan administrator to
obtain the additional security.
o Each new or renewed loan must bear a reasonable rate of interest
commensurate with the interest rates charged by persons in the business of
lending money for loans that would be made under similar circumstances.
o Loans must be available to all plan participants, former participants (or
death beneficiaries of participants) who still have account balances under
the plan, and alternate payees on a reasonably equivalent basis.
o Plans subject to ERISA provide that the participant's spouse must consent
in writing to the loan.
o Except to the extent permitted in accordance with the terms of a prohibited
transaction exemption issued by DOL, loans are not available (i) in a
Keogh (non-corporate) plan to an owner-employee or a partner who owns more
than 10% of a partnership or (ii) to 5% shareholders in an
S corporation.
CERTAIN RULES APPLICABLE TO PLANS DESIGNED TO COMPLY WITH SECTION 404(C) OF
ERISA
Section 404(c) of ERISA, and the related DOL regulation, provide that if a plan
participant or beneficiary exercises control over the assets in his or her plan
account, plan
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fiduciaries will not be liable for any loss that is the direct and necessary
result of the plan participant's or beneficiary's exercise of control. As a
result, if the plan complies with Section 404(c) and the DOL regulation
thereunder, the plan participant can make and is responsible for the results of
his or her own investment decisions.
Section 404(c) plans must provide, among other things, that a broad range of
investment choices are available to plan participants and beneficiaries and must
provide such plan participants and beneficiaries with enough information to make
informed investment decisions. Compliance with the Section 404(c) regulation is
completely voluntary by the plan sponsor, and the plan sponsor may choose not to
comply with Section 404(c).
The EQUI-VEST Trusteed, HR-10 Annuitant-Owned, SIMPLE IRA and TSA programs
provide the broad range of investment choices and information needed in order to
meet the requirements of the Section 404(c) regulation. If the plan is intended
to be a Section 404(c) plan, it is, however, the plan sponsor's responsibility
to see that the requirements of the DOL regulation are met. Equitable Life and
its agents shall not be responsible if a plan fails to meet the requirements of
Section 404(c).
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold on amounts we pay under a free look or
cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs in SEP, SARSEP, or SIMPLE IRAs to Roth IRAs, as it is
considered a withdrawal from the traditional IRA and is taxable.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our Processing Office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,700 in periodic annuity payments in
1999 your payments will generally be exempt from federal income tax withholding.
You could specify a different choice of withholding exemption or request that
tax be withheld. Your
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74 TAX INFORMATION
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withholding election remains effective unless and until you revoke it. You may
revoke or change your withholding election at any time.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. An eligible rollover distribution from a TSA can be rolled over to
another TSA or a traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or traditional IRA.
All distributions from a TSA or qualified plan are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are "required minimum distributions" after age
70 1/2 or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions which fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or -former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), and any
distribution from a qualified plan or TSA which is not an eligible rollover
distribution we generally withhold at a flat 10% rate.
You cannot elect out of withholding if the payment is an "eligible rollover
distribution" from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an "eligible rollover distribution" then the 10%
withholding rate applies.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account A for taxes. We do not
now, but may in the future set up reserves for such taxes.
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ABOUT OUR SEPARATE ACCOUNT A
Each variable investment option is a subaccount of our Separate Account A. We
established Separate Account A in 1968 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts, including these contracts. We are the
legal owner of all of the assets in Separate Account A and may withdraw any
amounts that exceed our reserves and other liabilities with respect to variable
investment options under our contracts. The results of Separate Account A's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account A is registered under the Investment Company Act of 1940 and is
classified by that act as a "unit investment trust." The SEC, however, does not
manage or supervise Equitable Life or Separate Account A.
Each subaccount (variable investment option) within Separate Account A invests
solely in Class IA or Class IB shares, respectively, issued by the corresponding
Portfolios of The Hudson River Trust and EQ Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account A, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account A or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account A or a
variable investment option directly);
(5) to deregister Separate Account A under the Investment Company Act of 1940;
(6) to restrict or eliminate any voting rights as to Separate Account A; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE HUDSON RIVER TRUST AND EQ ADVISORS TRUST
The Hudson River Trust and EQ Advisors Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each trust issues different
shares relating to each Portfolio.
The Hudson River Trust and EQ Advisors Trust do not impose sales charges or
"loads" for buying and selling their shares. All dividends and other
distributions on a trust's shares are reinvested in full. The Boards of Trustee
of The Hudson River Trust and EQ Advisors Trust each may establish additional
Portfolios or eliminate existing Portfolios at any time. More detailed
information about The Hudson River Trust and EQ Advisors Trust, their investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 plan
relating to the Class IB shares of The Hudson River Trust (under TSA Advantage
contracts) and EQ Advisors Trust, and other aspects of their operations, appears
in their prospectuses, or in their SAIs which are available upon request.
PROPOSED SUBSTITUTION OF PORTFOLIOS. We are asking the SEC to approve the
substitution of 14 newly created Portfolios of the EQ Advisors Trust for The
Hudson River Trust Portfolios currently available under the variable investment
options (the "Substitution"). The EQ Advisors Trust Portfolios will have
substantially identical investment objectives, strategies, and policies as those
of The Hudson River Trust Portfolios they would replace. The assets of any
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Portfolio of The Hudson River Trust underlying your contract would be
transferred to the substituted EQ Advisors Trust Portfolio.
We believe that this Substitution will be in your best interest because you
would have a single set of variable investment options with similar advisory
structures. You also will have a single EQ Advisors Trust prospectus for all the
Portfolios, rather than the two separate prospectuses you now receive. EQ
Financial Consultants Inc. will be the manager of the new EQ Advisors Trust
Portfolios, and Alliance Capital Management L.P. will continue to provide the
day-to-day advisory services to each of the new Portfolios.
You should note that:
o No action is required on your part. You will not need to vote a proxy, file
a new election, or take any other action if the SEC approves the
Substitution.
o The elections you have on file for allocating your account value and
contributions will remain unchanged until you direct us otherwise.
o We will bear all expenses directly relating to the Substitution
transaction.
o The management fees for the new Portfolios will be the same as those for
the corresponding Portfolios of The Hudson River Trust. Certain of the new
EQ Advisors Trust Portfolios may have slightly higher expense ratios.
o On the effective date of the Substitution transaction, your account value
(i.e., the units you own) in the variable investment options will be the
same as before the transaction.
o The Substitution will have no tax consequences for you.
Please review the EQ Advisors Trust prospectus that accompanies this prospectus.
It contains more information about the EQ Advisors Trust, including its
management structure, advisory arrangements, and general fees and expenses that
will be of interest to you.
Subject to SEC approval, we expect the Substitution to be completed in the fall
of 1999. It will affect everyone who has a balance in The Hudson River Trust
Portfolios at that time. Of course, you may transfer your account value among
the investment options, as usual.
We will notify you when we receive SEC approval, and again when the Substitution
is complete.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the guaranteed interest option, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account. The disclosure with regard
to general accounts, however, may be subject to certain provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR CERTAIN SEP AND KEOGH PLAN CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a bank checking account, bank money market
account, or credit union checking account and contributed as an additional
contribution into your contracts on a monthly basis. AIP is available for Single
Life SEP and Keogh Units provided that the single life is the employer who
provided the funds.
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AIP additional contributions may be allocated to any of the investment options.
Our minimum contribution amount requirements apply to AIP. You choose the day of
the month you wish to have your account debited. However, you may not choose a
date later than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our Processing Office.
WIRE TRANSFERS. Employers may also send contributions by wire transfer from a
bank.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our "business day" is any day on which Equitable Life is open and the New York
Stock Exchange is open for trading. We are closed on national business holidays
including Martin Luther King, Jr. Day and the Friday after Thanksgiving.
Additionally, we may choose to close on the day immediately preceding or
following a national business holiday or due to emergency conditions. Our
business day ends at 4:00 p.m., Eastern Time for purposes of determining the
date when contributions are applied and any other transaction requests are
processed. Contributions will be applied and any other transaction requests will
be processed when they are received along with all the required information
unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
o Quarterly rebalancing will be processed on a calendar year basis and
semiannual or annual rebalancing will be processed on the first business
day of the month. Rebalancing will not be done retroactively.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the unit value next determined after the close of the business day.
o Contributions allocated to the guaranteed interest option will receive the
guaranteed interest rate in effect on that business day.
o Transfers to or from variable investment options will be made at the unit
value next determined after the close of the business day.
o Transfers to the guaranteed interest option will receive the guaranteed
interest rate in effect on that business day.
o For the fixed-dollar option, the first monthly transfer will occur on the
last business day of the month in which we receive your election form at
our Processing Office.
o For the interest sweep, the first monthly transfer will occur on the last
business day of the following month we receive your election form at our
Processing Office.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of The Hudson River Trust and EQ Advisors Trust we
have the right to vote on certain matters involving the Portfolios, such as:
o The election of trustees.
o The formal approval of independent auditors selected for each trust.
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o Any other matters described in the prospectuses for the trusts or requiring
a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a Portfolio for which no instructions have been received in the
same proportion as we vote shares of that Portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a Portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control each trust. EQ Advisors Trust shares are sold only to our
separate accounts and an affiliated qualified plan trust. The Hudson River Trust
shares are held by other separate accounts of ours and by separate accounts of
insurance companies unaffiliated with us. Shares held by these separate accounts
will probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Hudson River
Trust Board of Trustees intends to monitor events in order to identify any
material irreconcilable conflicts that may arise and to determine what action,
if any, should be taken in response. If we believe that a response to any of
those events insufficiently protects our contract owners, we will see to it that
appropriate action is taken.
SEPARATE ACCOUNT A VOTING RIGHTS
If actions relating to Separate Account A require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT OUR YEAR 2000 PROGRESS
Equitable Life relies upon various computer systems in order to administer your
contract and operate the investment options. Some of these systems belong to
service providers who are not affiliated with Equitable Life.
In 1995, Equitable Life began addressing the question of whether its computer
systems would recognize the year 2000 before, on or after January 1, 2000, and
Equitable Life has identified those of its systems critical to business
operations that were not year 2000 compliant. By year end 1998, the work of
modifying or replacing non-compliant systems was substantially completed.
Equitable Life has begun comprehensive testing of its year 2000 compliance and
expects that the testing will be substantially completed by June 30, 1999.
Equitable Life has contacted third-party service providers to seek confirmation
that they are acting to address the year 2000 issue with the goal of avoiding
any material adverse effect on services provided to contract owners and on
operations of the investment options. Most third-party service providers have
provided Equitable Life confirmation of their year 2000 compliance. Equitable
Life believes it is on schedule for substantially all such systems and services,
including those considered to be mission-critical, to be confirmed as year 2000
compliant, renovated, replaced or the subject of contingency plans, by June 30,
1999, except for one investment accounting system that is scheduled to be
replaced by August 31, 1999 and confirmed as year 2000 compliant by September
30, 1999.
<PAGE>
- --------------------------------------------------------------------------------
MORE INFORMATION 79
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Additionally, Equitable Life will be supplementing its existing business
continuity and disaster recovery plans to cover certain categories of
contingencies that could arise as a result of year 2000 related failures. Year
2000 specific contingency plans are anticipated to be in place by June 30, 1999.
There are many risks associated with year 2000 issues, including the risk that
Equitable Life's computer systems will not operate as intended. Additionally,
there can be no assurance that the systems of third parties will be year 2000
compliant. Any significant unresolved difficulty related to the year 2000
compliance initiatives could result in an interruption in, or a failure of,
normal business operations and, accordingly, could have a material adverse
effect on our ability to administer your contract and operate the investment
options.
To the fullest extent permitted by law, the foregoing year 2000 discussion is a
"Year 2000 Readiness Disclosure" within the meaning of The Year 2000 Information
and Readiness Disclosure Act, 15 U.S.C. Sec. 1 (1998).
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account A, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The financial statements of Separate Account A as at December 31, 1998 and for
the periods ended December 31, 1998 and 1997, and the consolidated financial
statements of Equitable Life at December 31, 1998 and 1997, and for each of the
three years ended December 31, 1998 included in the SAI, have been so
incorporated in reliance on the reports of PricewaterhouseCoopers LLP, given on
the authority of such firm as experts in auditing and accounting.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
Generally, the owner may not assign a contract for any purpose. However, a
trustee owner of a Trusteed contract can transfer ownership to the annuitant. We
will not be bound by an assignment unless it is in writing and we have received
it at our Processing Office. In some cases, an assignment or change of ownership
may have adverse tax consequences. See "Tax information" above.
You cannot assign a contract as security for a loan or other obligation. Loans
from account value, however, are permitted under TSA (but not University TSA)
and Corporate Trusteed contracts only, unless restricted by the employer.
FUNDING CHANGES
The employer or trustee can change the funding vehicle for an EDC or Trusteed
contract. You can change the funding vehicle for TSA, SEP or SIMPLE IRA
contract.
DISTRIBUTION OF THE CONTRACTS
Equitable Financial Consultants, Inc. ("EQF"), an indirect, wholly owned
subsidiary of Equitable Life, is the distributor of the contracts and has
responsibility for sales and marketing functions for Separate Account A. During
1999, EQF plans to change its name to AXA Advisors, Inc. EQF serves as the
principal underwriter of Separate Account A. EQF is registered with the SEC as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. EQF's principal business address is 1290 Avenue of the Americas, New York,
NY 10104. Under a Distribution and Servicing Agreement between EQF, Equitable
life, and certain of Equitable Life's separate accounts, including Separate
Account A, Equitable Life paid EQF fees of $325,380 for 1998 and $325,380 for
1997, as distributor of certain contracts and as the principal underwriter of
certain separate accounts including Separate Account A.
<PAGE>
- --------------------------------------------------------------------------------
80 MORE INFORMATION
- --------------------------------------------------------------------------------
The contracts will be sold by registered representatives of EQF and its
affiliates, who are also our licensed insurance agents. EQF may also receive
compensation and reimbursement for its marketing services under the terms of its
distributions agreement with Equitable Life. The offering of the contracts is
intended to be continuous.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 81
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9
Investment performance
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the Portfolios
in which they invest. We include these tables because they may be of general
interest to you. THE RESULTS SHOWN REFLECT PAST PERFORMANCE. THEY DO NOT
INDICATE HOW THE VARIABLE INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. THEY
ALSO DO NOT REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR
RESULTS WILL DIFFER.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all fees and charges under the contract, but do not reflect the charges for any
applicable taxes such as premium taxes, or any applicable annuity administrative
fee.
Tables 3, 4 and 5 show the rates of return of the variable investment options on
an annualized, cumulative, and year-by-year basis. These tables take into
account all fees and charges under the contract, but do not reflect the annual
administrative charge and any withdrawal charge, or charges for any applicable
taxes such as premium taxes or any applicable annuity administrative fee. If the
charges were reflected they would effectively reduce the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the Portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted the
results of the Portfolios to reflect the charges under the contracts that would
have applied had the investment options and/or contracts been available. Since
charges under the contracts vary, we have assumed, for each charge, the highest
that might apply.
Finally, the results shown for the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options for periods before
those options were operated as a unit investment trust reflect the results of
the separate accounts that preceded them. The "Since Inception" figures for
these options are based on the date of inception of the preceding separate
accounts. We have adjusted these results to reflect the fee and expense
structure in effect for unit investment trust. See "The Reorganization" in the
SAI for additional information.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks.
Market indices are not subject to any charges for investment advisory fees,
brokerage commission or other operating expenses typically associated with a
managed portfolio. Also, they do not reflect other charges such as the mortality
and expense risks charge, administration charge, or any withdrawal or optional
benefit charge, under the contracts. Comparisons with these benchmarks,
therefore, may be of limited use. We include them because they are widely known
and may help you to understand the universe of securities from which each
Portfolio is likely to select its holdings. Benchmark data reflect the
reinvestment of dividend income. The benchmarks include:
<PAGE>
- --------------------------------------------------------------------------------
82 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK: 50% Russell 2000 Small Stock Index
and 50% Standard & Poor's Mid-Cap Total Return Index.
ALLIANCE BALANCED: 50% Standard & Poor's 500 and 50% Lehman
Government/Corporate Bond Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
ALLIANCE EQUITY INDEX: Standard & Poor's 500 Index.
ALLIANCE GLOBAL: Morgan Stanley Capital International World Index.
ALLIANCE GROWTH & INCOME: 75% Standard & Poor's 500 Index
and 25% Value Line Convertibles Index.
ALLIANCE GROWTH INVESTORS: 30% Lehman Government/Corporate
Bond Index and 70% Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Merrill Lynch High Yield Master Index.
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman
Intermediate Government Bond Index.
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International
Europe, Australia, Far East Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
ALLIANCE QUALITY BOND: Lehman Aggregate Bond Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERRILL LYNCH BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERRILL LYNCH WORLD STRATEGY: 36% Standard & Poor's 500
Index/24% Morgan Stanley Capital International Europe, Australia,
Far East Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+
14% Salomon Brothers World Government Bond (excluding
U.S.)/and 5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and 40%
Lehman Government/Corporate Bond Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital
International Europe, Australia, Far East Index.
WARBURG PINCUS SMALL COMPANY VALUE: Russell 2000 Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc., the data are presented net of
investment management fees, direct operating expenses and asset-based charges
applicable under annuity contracts. Lipper data provide a more accurate picture
than market benchmarks of the EQUI-VEST performance relative to other variable
annuity products.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 83
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
- -------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
----------------------------------
1 3 5
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock (8.28)% 5.22% 6.68%
- -------------------------------------------------------------------------------------
Alliance Balanced 8.08% 9.08% 5.96%
- -------------------------------------------------------------------------------------
Alliance Common Stock 18.31% 21.76% 17.26%
- -------------------------------------------------------------------------------------
Alliance Conservative Investors 4.16% 5.07% 4.60%
- -------------------------------------------------------------------------------------
Alliance Equity Index 17.14% 21.81% --
- -------------------------------------------------------------------------------------
Alliance Global 11.41% 10.01% 9.42%
- -------------------------------------------------------------------------------------
Alliance Growth & Income 10.55% 16.64% 13.10%
- -------------------------------------------------------------------------------------
Alliance Growth Investors 8.96% 10.23% 9.06%
- -------------------------------------------------------------------------------------
Alliance High Yield (13.25)% 5.69% 5.17%
- -------------------------------------------------------------------------------------
Alliance Intermediate Government Securities (1.45)% 0.85% 0.77%
- -------------------------------------------------------------------------------------
Alliance International 1.13% 0.21% --
- -------------------------------------------------------------------------------------
Alliance Money Market (3.69)% (0.02)% 0.55%
- -------------------------------------------------------------------------------------
Alliance Quality Bond (0.59)% 2.24% 2.10%
- -------------------------------------------------------------------------------------
Alliance Small Cap Growth (12.45)% -- --
- -------------------------------------------------------------------------------------
MFS Emerging Growth Companies 23.04% -- --
- -------------------------------------------------------------------------------------
MFS Research 13.51% -- --
- -------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity 2.06% -- --
- -------------------------------------------------------------------------------------
Merrill Lynch World Strategy (2.29)% -- --
- -------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity (33.25)% -- --
- -------------------------------------------------------------------------------------
E/Q Putnam Balanced 2.27% -- --
- -------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value 3.19% -- --
- -------------------------------------------------------------------------------------
T. Rowe Price Equity Income (0.24)% -- --
- -------------------------------------------------------------------------------------
T. Rowe Price International Stock 3.99% -- --
- -------------------------------------------------------------------------------------
Warburg Pincus Small Company Value (17.69)% -- --
- -------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
-------------------------------------
SINCE SINCE PORTFOLIO
10 OPTION PORTFOLIO INCEPTION
VARIABLE INVESTMENT OPTIONS YEARS INCEPTION* INCEPTION DATE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock 15.85% -- -- 5/1/84
- --------------------------------------------------------------------------------------------------
Alliance Balanced 8.81% -- -- 5/1/84
- --------------------------------------------------------------------------------------------------
Alliance Common Stock 14.96% -- -- 8/1/68
- --------------------------------------------------------------------------------------------------
Alliance Conservative Investors -- 4.69% 6.09% 10/2/89
- --------------------------------------------------------------------------------------------------
Alliance Equity Index -- 21.38% 19.74% 3/1/94
- --------------------------------------------------------------------------------------------------
Alliance Global 11.11% -- -- 8/27/87
- --------------------------------------------------------------------------------------------------
Alliance Growth & Income -- 13.20% 12.14% 10/1/93
- --------------------------------------------------------------------------------------------------
Alliance Growth Investors -- 9.24% 9.16% 10/2/89
- --------------------------------------------------------------------------------------------------
Alliance High Yield 7.41% -- -- 1/2/87
- --------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities -- 1.91% 2.93% 4/1/91
- --------------------------------------------------------------------------------------------------
Alliance International -- 1.22% 1.32% 4/3/95
- --------------------------------------------------------------------------------------------------
Alliance Money Market 1.80% -- -- 5/11/82
- --------------------------------------------------------------------------------------------------
Alliance Quality Bond -- 2.15% 1.78% 10/1/93
- --------------------------------------------------------------------------------------------------
Alliance Small Cap Growth -- (1.22)% 4.98% 5/1/97
- --------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies -- 21.32% 26.35% 5/1/97
- --------------------------------------------------------------------------------------------------
MFS Research -- 12.93% 16.37% 5/1/97
- --------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity -- 5.64% 9.73% 5/1/97
- --------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy -- (2.96)% (0.02)% 5/1/97
- --------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity -- (37.49)% (37.44)% 8/20/97
- --------------------------------------------------------------------------------------------------
E/Q Putnam Balanced -- 6.57% 8.44% 5/1/97
- --------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value -- 7.30% 10.01% 5/1/97
- --------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income -- 8.55% 11.06% 5/1/97
- --------------------------------------------------------------------------------------------------
T. Rowe Price International Stock -- (2.06)% (0.09)% 5/1/97
- --------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value -- (6.40)% (2.49)% 5/1/97
- --------------------------------------------------------------------------------------------------
</TABLE>
* Option inception dates are: Alliance Aggressive Stock (5/1/84), Alliance
Balanced (5/1/84), Alliance Common Stock (8/27/81), Alliance Conservative
Investors (1/4/94), Alliance Equity Index (6/1/94), Alliance Global
(1/4/94), Alliance Growth & Income (1/4/94), Alliance Growth Investors
(1/4/94), Alliance High Yield (1/4/94), Alliance Intermediate Government
Securities (6/1/94), Alliance International (9/1/95), Alliance Money
Market (5/11/82), Alliance Quality Bond (1/4/94), Alliance Small Cap
Growth (6/2/97), MFS Emerging Growth Companies (6/2/97), MFS Research
(6/2/97), Merrill Lynch Basic Value Equity (6/2/97), Merrill Lynch World
Strategy (6/2/97), Morgan Stanley Emerging Markets Equity (8/20/97),
EQ/Putnam Balanced (6/2/97), EQ/Putnam Growth & Income Value (6/2/97), T.
Rowe Price Equity Income (6/2/97), T. Rowe Price International Stock
(6/2/97), Warburg Pincus Small Company Value (6/2/97).
<PAGE>
- --------------------------------------------------------------------------------
84 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
- ---------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock $ 917.19 $1,164.90 $1,381.52 $4,352.96 $7,647.86
- ---------------------------------------------------------------------------------------------------------------------
Alliance Balanced $1,080.83 $1,297.77 $1,335.75 $2,326.22 $3,604.89
- ---------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $1,183.51 $1,805.17 $2,217.34 $4,031.95 --
- ---------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $1,041.61 $1,159.86 $1,246.27 -- $1,727.45
- ---------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $1,171.42 $1,807.49 -- -- $2,390.38
- ---------------------------------------------------------------------------------------------------------------------
Alliance Global $1,114.06 $1,331.21 $1,568.49 $2,868.34 $2,682.62
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income $1,105.50 $1,586.70 $1,850.98 -- $1,825.29
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $1,089.62 $1,339.33 $1,543.14 -- $2,947.24
- ---------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 867.55 $1,180.55 $1,286.90 $2,044.10 $2,270.97
- ---------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 985.51 $1,025.69 $1,039.20 -- $1,251.19
- ---------------------------------------------------------------------------------------------------------------------
Alliance International $1,011.32 $1,006.37 -- -- $1,086.54
- ---------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 963.10 $ 999.51 $1,027.86 $1,195.40 $1,720.50
- ---------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $ 994.11 $1,068.57 $1,109.48 -- $1,096.99
- ---------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 875.55 -- -- -- $1,084.58
- ---------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $1,230.38 -- -- -- $1,477.97
- ---------------------------------------------------------------------------------------------------------------------
MFS Research $1,135.14 -- -- -- $1,288.14
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $1,020.59 -- -- -- $1,167.81
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $ 977.07 -- -- -- $1,000.41
- ---------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 667.51 -- -- -- $ 526.20
- ---------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced $1,022.71 -- -- -- $1,144.83
- ---------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value $1,031.92 -- -- -- $1,172.64
- ---------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $ 997.65 -- -- -- $1,191.39
- ---------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $1,039.94 -- -- -- $1,001.55
- ---------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 823.13 -- -- -- $ 958.81
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolios inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 85
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
- ---------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (1.07)% 9.24% 9.94% 17.29% -- 16.03%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 16.33% 14.87% 15.44% -- 13.95%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 17.77% 15.56% 16.49% -- 15.78%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.52% 13.34% 9.31% 11.05% -- 10.81%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 15.79% 13.84% 12.97% -- 13.56%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 18.70% 16.88% 15.21% -- 15.37%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.62% 25.85% 20.24% 17.02% 17.20% 12.07%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 22.23% 18.63% 16.72% 16.30% 11.34%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% 24.06% 19.21% 17.76% 12.75%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.35% 9.21% 7.93% -- -- 8.52%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 15.62% 14.31% -- -- 12.55%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 14.45% 13.37% -- -- 12.08%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.36% 25.89% -- -- -- 22.67%
- ---------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 27.67% -- -- -- 24.31%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% -- -- -- 24.79%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.17% 14.35% 12.72% 13.26% -- 11.04%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 14.67% 11.98% 11.21% -- 9.64%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 17.77% 15.68% 10.66% -- 9.55%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.25% 20.89% 16.23% -- -- 15.28%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 21.25% 18.35% -- -- 17.89%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 23.99% 21.07% -- -- 20.48%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 17.53% 14.58% 12.38% -- -- 14.53%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 15.62% 14.31% -- -- 12.55%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 22.69% 19.96% -- -- 15.55%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.42)% 9.86% 8.51% 9.67% -- 9.01%
- ---------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 8.21% 7.37% 9.34% -- 8.97%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 9.11% 9.01% 11.08% -- 10.72%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES 6.30% 4.83% 3.98% -- -- 5.66%
- ---------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 6.21% 5.91% -- -- 7.25%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 6.74% 6.45% -- -- 7.60%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 9.09% 4.17% -- -- -- 5.88%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 9.94% -- -- -- 10.74%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 9.00% -- -- -- 9.68%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.89% 3.93% 3.75% 4.16% -- 5.33%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 4.87% 4.77% 5.20% -- 6.34%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 5.18% 5.11% 5.44% -- 6.41%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
86 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998 (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE QUALITY BOND 7.23% 6.27% 5.35% -- -- 4.91%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 6.38% 6.54% -- -- 6.21%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 7.29% 7.27% -- -- 6.92%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.56)% -- -- -- -- 10.76%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% -- -- -- -- 16.72%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% -- -- -- -- 16.58%
- ---------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.72% -- -- -- -- 33.08%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% -- -- -- -- 22.72%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 14.53%
- ---------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.44% -- -- -- -- 22.79%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 28.73%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ---------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 10.09% -- -- -- -- 15.78%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 21.32%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ---------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.39% -- -- -- -- 5.52%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% -- -- -- -- 11.15%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% -- -- -- -- 20.00%
- ---------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY (28.00)% -- -- -- -- (33.58)%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% -- -- -- -- (36.28)%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% -- -- -- -- (28.92)%
- ---------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.31% -- -- -- -- 14.41%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% -- -- -- -- 17.83%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% -- -- -- -- 23.48%
- ---------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.31% -- -- -- -- 16.07%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 21.32%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.61% -- -- -- -- 17.18%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% -- -- -- -- 19.07%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.17% -- -- -- -- 5.59%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 9.06%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 13.43%
- ---------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE (11.21)% -- -- -- -- 2.86%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 16.77%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 14.53%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolios inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 87
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (1.07)% 30.36% 60.65% 392.80% -- 785.76%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 58.64% 102.73% 334.88% -- 613.05%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 63.35% 106.12% 360.30% -- 759.55%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.52% 45.61% 56.10% 185.23% -- 350.72%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 55.60% 91.92% 240.69% -- 553.21%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 67.24% 118.08% 311.86% -- 715.64%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.62% 99.33% 151.34% 381.63% 2,290.79% 3,100.94%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 84.52% 138.97% 388.00% 2,185.68% 1,208.81%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% 193.91% 479.62% 2,530.43% 3,755.68%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.35% 30.27% 46.43% -- -- 112.91%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 55.28% 97.15% -- -- 202.48%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 49.92% 87.28% -- -- 187.40%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.36% 99.53% -- -- -- 168.57%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 108.12% -- -- -- 186.34%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% -- -- -- 192.17%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.17% 49.51% 81.98% 247.37 -- 228.02%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 51.58% 77.94% 194.96% -- 188.08%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 63.34% 107.19% 175.31% -- 181.57%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.25% 76.67% 112.15% -- -- 110.90%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 79.05% 133.95% -- -- 139.10%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 90.62% 160.09% -- -- 166.00%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 17.53% 50.42% 79.23% -- -- 250.52%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 55.28% 97.15% -- -- 202.45%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 84.68% 148.41% -- -- 280.88%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.42)% 32.59% 50.47% 151.63% -- 181.30%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 26.80% 43.00% 145.62% -- 182.21%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 29.90% 53.96% 186.01% -- 239.69%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 6.30% 15.20% 21.53% -- -- 53.20%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 19.84% 33.36% -- -- 72.35%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 21.61% 36.71% -- -- 76.55%
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 9.09% 13.03% -- -- -- 23.88%
- -----------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 33.62% -- -- -- 47.74%
- -----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 29.52% -- -- -- 41.40%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
88 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET 3.89% 12.26% 20.20% 50.36% -- 137.22%
- ------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 15.34% 26.25% 66.09% -- 178.83%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 16.35% 28.27% 69.88% -- 181.74%
- ------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND 7.23% 20.01% 29.75% -- -- 28.65%
- ------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 20.42% 37.37% -- -- 37.26%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 23.51% 42.06% -- -- 42.14%
- ------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.56)% -- -- -- -- 18.57%
- ------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% -- -- -- -- 28.98%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% -- -- -- -- 29.23%
- ------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.72% -- -- -- -- 61.40%
- ------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% -- -- -- -- 42.16%
- ------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 25.40%
- ------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.44% -- -- -- -- 40.83%
- ------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 52.86%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 10.09% -- -- -- -- 27.67%
- ------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 15.59%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.39% -- -- -- -- 9.37%
- ------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% -- -- -- -- 19.41%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% -- -- -- -- 33.33%
- ------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY (28.00)% -- -- -- -- (42.82)%
- ------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% -- -- -- -- (45.67)%
- ------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% -- -- -- -- (36.71)%
- ------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.31% -- -- -- -- 25.16%
- ------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% -- -- -- -- 31.59%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% -- -- -- -- 42.22%
- ------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH &
INCOME VALUE 11.31% -- -- -- -- 28.20%
- ------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 38.49%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.61% -- -- -- -- 30.25%
- ------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% -- -- -- -- 33.92%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 89
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998 (CONTINUED)
- ------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
T. ROWE PRICE
INTERNATIONAL STOCK 12.17% -- -- -- -- 9.49%
- ------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 15.88%
- ------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 23.42%
WARBURG PINCUS SMALL
COMPANY VALUE (11.21)% -- -- -- -- 4.82%
- ------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 29.95%
- ------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 25.40%
- ------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolios inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
90 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE 5
YEAR-BY-YEAR RATES OF RETURN
- ----------------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock 42.87% 5.73% 84.57% (4.47)% 15.17%
- ----------------------------------------------------------------------------------------------------------------
Alliance Balanced 24.60% (1.46)% 40.02% (4.15)% 10.80%
- ----------------------------------------------------------------------------------------------------------------
Alliance Common Stock 24.07% (9.27)% 35.81% 1.82% 23.11%
- ----------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 2.75%+ 4.97% 18.23% 4.36% 9.27%
- ----------------------------------------------------------------------------------------------------------------
Alliance Equity Index -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Alliance Global 25.02% (7.33)% 28.79% (1.86)% 30.34%
- ----------------------------------------------------------------------------------------------------------------
Alliance Growth & Income -- -- -- -- (0.59)%+
- ----------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 3.65%+ 9.12% 46.90% 3.52% 13.71%
- ----------------------------------------------------------------------------------------------------------------
Alliance High Yield 3.71% (2.43)% 22.78% 10.80% 21.48%
- ----------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities -- -- 10.94%+ 4.17% 9.09%
- ----------------------------------------------------------------------------------------------------------------
Alliance International -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Alliance Money Market 7.72% 6.82% 4.69% 2.16% 1.58%
- ----------------------------------------------------------------------------------------------------------------
Alliance Quality Bond -- -- -- -- (0.84)%+
- ----------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
MFS Research -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock (5.11)% 29.87% 20.54% 9.31% (1.07)%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Balanced (9.27)% 18.13% 10.16% 13.44% 16.52%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Common Stock (3.48)% 30.64% 22.55% 27.45% 27.62%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors (5.38)% 18.79% 3.79% 11.71% 12.35%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Equity Index (0.04)%+ 34.66% 20.73% 30.79% 26.36%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Global 3.82% 17.23% 13.06% 10.05% 20.17%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income (1.90)% 22.42% 18.47% 25.06% 19.25%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors (4.44)% 24.68% 11.09% 15.21% 17.53%
- ---------------------------------------------------------------------------------------------------------------------
Alliance High Yield (4.09)% 18.32% 21.23% 16.88% (6.42)%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (5.65)% 11.81% 2.38% 5.85% 6.30%
- ---------------------------------------------------------------------------------------------------------------------
Alliance International -- 9.60%+ 8.33% (4.35)% 9.09%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Money Market 2.62% 4.32% 3.90% 3.98% 3.89%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond (6.37)% 15.46% 3.94% 7.68% 7.23%
- ---------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth -- -- -- 25.55%+ (5.56)%
- ---------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies -- -- -- 21.34%+ 32.72%
- ---------------------------------------------------------------------------------------------------------------------
MFS Research -- -- -- 15.01%+ 22.44%
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity -- -- -- 15.97%+ 10.09%
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy -- -- -- 3.77%+ 5.39%
- ---------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity -- -- -- (20.59)%+ (28.00)%
- ---------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced -- -- -- 13.46%+ 10.31%
- ---------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value -- -- -- 15.17%+ 11.31%
- ---------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income -- -- -- 21.04%+ 7.61%
- ---------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock -- -- -- (2.39)%+ 12.17%
- ---------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value -- -- -- 18.06%+ (11.21)%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Return for these Portfolios represent less than 12 months of performance. The
returns are as of each Portfolio's inception date as shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 91
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options, and the Portfolios and may compare the performance
or ranking of those options and the Portfolios with:
o those 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;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
Portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Money Management Letter
- --------------------------------------------------------------------------------
Morningstar's Variable Annuity Sourcebook Investment Dealers Digest
- --------------------------------------------------------------------------------
Business Week National Underwriter
- --------------------------------------------------------------------------------
Forbes Pension & Investments
- --------------------------------------------------------------------------------
Fortune USA Today
- --------------------------------------------------------------------------------
Institutional Investor Investor's Business Daily
- --------------------------------------------------------------------------------
Money The New York Times
- --------------------------------------------------------------------------------
Kiplinger's Personal Finance The Wall Street Journal
- --------------------------------------------------------------------------------
Financial Planning The Los Angeles Times
- --------------------------------------------------------------------------------
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
Investment Management Weekly
- --------------------------------------------------------------------------------
Lipper Analytical Services, Inc. (Lipper) compiles performance data for peer
universes of funds with similar investment objectives in its Lipper Survey.
Morningstar, Inc. compiles similar data in the Morningstar Variable Annuity/Life
Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable insurance and annuity contracts; and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). Current yield for the other options will be based
on net changes in a hypothetical investment over a given 30-day period,
exclusive of capital changes, and then "annualized" (assuming that the same
30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option.
<PAGE>
- --------------------------------------------------------------------------------
92 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
The yields and effective yields assume the deduction of all contract charges and
expenses other than the annual administrative charge, withdrawal charge, and any
charge for taxes such as premium tax. For more information, see "Alliance Money
Market Option Yield Information" and "Other Yield Information" in the SAI.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX I: ORIGINAL CONTRACTS A-1
- --------------------------------------------------------------------------------
Appendix I: Original contracts
- --------------------------------------------------------------------------------
Original Contracts are EQUI-VEST contracts under which the contract owner has
not elected to add Alliance Intermediate Government Securities, Alliance Quality
Bond, Alliance High Yield, Alliance Growth and Income, Alliance Equity Index,
Alliance Global, Alliance International, Alliance Small Cap Growth, Alliance
Conservative Investors, Alliance Growth Investors options and any of the EQ
Advisors Trust variable Investment options as investment options.
SELECTING YOUR INVESTMENT METHOD. If you own an original contract, only the
guaranteed interest option and the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options are available. In
most cases, you may request that we add additional variable investment options
to your original contract. We reserve the right to deny your request.
TRANSFERRING YOUR ACCOUNT VALUE. If you own an original contract, including
original contract owners who elect to amend their contract by selecting maximum
transfer flexibility, the Alliance Money Market option is always available.
However, we will not permit transfers into the Alliance Money Market option from
any other investment option. There will not be any other transfer limitations
under your original contract.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-1
- --------------------------------------------------------------------------------
Appendix II: Condensed financial information
- --------------------------------------------------------------------------------
The following tables show the accumulation unit values and the number of
outstanding units for each variable investment option under each contract series
at the last business day of the periods shown. The information presented is
shown for the past ten years, or from the first year the particular contracts
were offered if less than ten years ago.
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
DECEMBER 31,
----------------------------------------------------------
1994 1995 1996 1997 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THE HUDSON RIVER TRUST OPTIONS
- -----------------------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK
- -----------------------------------------------------------------------------------------------------
Unit value $ 95.45 $123.95 $149.41 $163.33 $161.59
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 664 1,310 2,468 3,226 3,342
- -----------------------------------------------------------------------------------------------------
ALLIANCE BALANCED
- -----------------------------------------------------------------------------------------------------
Unit value $ 91.64 $108.26 $119.26 $135.29 $157.63
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 289 386 548 655 752
- -----------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- -----------------------------------------------------------------------------------------------------
Unit value $ 97.03 126.78 $155.42 $198.12 $252.88
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 948 1,989 3,457 4,765 5,808
- -----------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- -----------------------------------------------------------------------------------------------------
Unit value $ 95.10 $112.97 $117.25 $130.98 $147.17
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 325 491 567 553 661
- -----------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- -----------------------------------------------------------------------------------------------------
Unit value $100.95 $135.94 $164.12 $214.66 $271.24
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 47 592 1,486 2,686 3,805
- -----------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL
- -----------------------------------------------------------------------------------------------------
Unit value $104.12 $122.06 $138.00 $151.87 $182.50
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,305 2,121 2,995 3,369 3,395
- -----------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME
- -----------------------------------------------------------------------------------------------------
Unit value $ 98.86 $121.02 $143.37 $179.30 $213.81
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 210 498 975 1,800 2,475
- -----------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- -----------------------------------------------------------------------------------------------------
Unit value $ 96.31 $120.08 $133.40 $153.69 $180.63
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,023 2,113 3,325 3,704 3,962
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
B-2 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
DECEMBER 31,
------------------------------------------------------------
1994 1995 1996 1997 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLIANCE HIGH YIELD
- -----------------------------------------------------------------------------------------------------
Unit value $ 95.88 $ 113.44 $ 137.53 $ 160.74 $ 150.42
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 99 209 444 831 1,164
- -----------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES
- -----------------------------------------------------------------------------------------------------
Unit value $ 98.19 $ 109.80 $ 112.40 $ 118.98 $ 126.48
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 32 89 146 202 314
- -----------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL
- -----------------------------------------------------------------------------------------------------
Unit value -- $ 104.15 $ 112.83 $ 107.92 $ 117.72
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 141 763 968 971
- -----------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- -----------------------------------------------------------------------------------------------------
Unit value $ 102.61 $ 107.04 $ 111.21 $ 115.66 $ 120.19
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 63 81 165 146 262
- -----------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND
- -----------------------------------------------------------------------------------------------------
Unit value $ 93.87 $ 108.38 $ 112.65 $ 121.30 $ 130.07
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 53 135 196 283 557
- -----------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- -----------------------------------------------------------------------------------------------------
Unit value -- -- -- $ 125.55 $ 118.57
- -----------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 488 1,101
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, DECEMBER 31,
1997 1998
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- --------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- --------------------------------------------------------------------------------
Unit value $121.34 $161.04
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 256 1,090
- --------------------------------------------------------------------------------
MFS RESEARCH
- --------------------------------------------------------------------------------
Unit value $115.01 $140.83
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 236 720
- --------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY
- --------------------------------------------------------------------------------
Unit value $115.97 $127.67
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 145 444
- --------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- --------------------------------------------------------------------------------
Unit value $103.77 $109.37
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 52 84
- --------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- --------------------------------------------------------------------------------
Unit value $ 79.41 $ 57.18
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 109 217
- --------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- --------------------------------------------------------------------------------
Unit value $113.46 $125.16
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 109 275
- --------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- --------------------------------------------------------------------------------
Unit value $115.17 $128.20
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 250 581
- --------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- --------------------------------------------------------------------------------
Unit value $121.04 $130.25
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 475 1,070
- --------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- --------------------------------------------------------------------------------
Unit value $ 97.61 $109.49
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 387 671
- --------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE
- --------------------------------------------------------------------------------
Unit value $118.06 $104.82
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 577 859
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
B-4 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 100 AND 200 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
DECEMBER 31,
------------------------------------------------
1989 1990 1991 1992
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THE HUDSON RIVER TRUST OPTIONS
- -------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK
- -------------------------------------------------------------------------------------
Unit value $ 25.86 $ 27.36 $ 50.51 $ 48.30
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) 8,134 9,545 12,962 17,986
- -------------------------------------------------------------------------------------
ALLIANCE BALANCED
- -------------------------------------------------------------------------------------
Unit value $ 19.69 $ 19.40 $ 27.17 $ 26.04
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) 16,810 19,423 21,100 25,975
- -------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- -------------------------------------------------------------------------------------
Unit value $ 83.40 $ 75.67 $102.76 $104.63
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) 8,645 9,670 10,292 11,841
- -------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- -------------------------------------------------------------------------------------
Unit value -- -- -- --
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- --
- -------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- -------------------------------------------------------------------------------------
Unit value -- -- -- --
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- --
- -------------------------------------------------------------------------------------
ALLIANCE GLOBAL
- -------------------------------------------------------------------------------------
Unit value -- -- -- --
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- --
- -------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME
- -------------------------------------------------------------------------------------
Unit value -- -- -- --
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- --
- -------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- -------------------------------------------------------------------------------------
Unit value -- -- -- --
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- --
- -------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD
- -------------------------------------------------------------------------------------
Unit value -- -- -- --
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- --
- -------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES
- -------------------------------------------------------------------------------------
Unit value -- -- -- --
- -------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- --
- -------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
DECEMBER 31,
1993 1994 1995 1996 1997 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
THE HUDSON RIVER TRUST OPTIONS
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 55.68 $ 52.88 $ 68.73 $ 82.91 $ 90.75 $ 89.92
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 21,496 24,787 25,821 27,945 28,030 25,634
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED
- ---------------------------------------------------------------------------------------------------------------
Unit value $ 28.85 $ 26.18 $ 30.92 $ 34.06 $ 38.66 $ 45.07
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 31,259 32,664 30,212 28,319 26,036 24,361
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- ---------------------------------------------------------------------------------------------------------------
Unit value $128.81 $124.32 $162.42 $199.05 $253.68 $323.75
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 13,917 15,749 16,292 16,933 17,386 17,231
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- ---------------------------------------------------------------------------------------------------------------
Unit value -- $ 95.10 $112.97 $117.25 $130.98 $147.17
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 325 491 567 553 661
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- ---------------------------------------------------------------------------------------------------------------
Unit value -- $100.95 $135.94 $164.12 $214.66 $271.24
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 47 592 1,486 2,686 3,805
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL
- ---------------------------------------------------------------------------------------------------------------
Unit value -- $104.12 $122.06 $138.00 $151.87 $182.50
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 1,305 2,121 2,995 3,369 3,395
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME
- ---------------------------------------------------------------------------------------------------------------
Unit value -- $ 98.86 $121.02 $143.37 $179.30 $213.81
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 210 498 975 1,800 2,475
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- ---------------------------------------------------------------------------------------------------------------
Unit value -- $ 96.31 $120.08 $133.40 $153.69 $180.63
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 1,023 2,113 3,325 3,704 3,962
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD
- ---------------------------------------------------------------------------------------------------------------
Unit value -- $ 95.88 $113.44 $137.53 $160.74 $150.42
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 99 209 444 831 1,164
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES
- ---------------------------------------------------------------------------------------------------------------
Unit value -- $ 98.19 $109.80 $112.40 $118.98 $126.48
- ---------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 32 89 146 202 314
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 100 AND 200 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
DECEMBER 31,
---------------------------------------------------------
1989 1990 1991 1992 1993
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLIANCE INTERNATIONAL
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- -------------------------------------------------------------------------------------------------
Unit value $21.89 $23.38 $24.48 $25.01 $25.41
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,045 1,307 1,325 1,201 1,065
- -------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
MFS RESEARCH
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- -------------------------------------------------------------------------------------------------
Unit value -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------
DECEMBER 31,
-------------------------------------------------------------------
1994 1995 1996 1997 1998
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLIANCE INTERNATIONAL
Unit value -- $104.15 $112.83 $107.92 $117.72
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 141 763 968 971
- -------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- -------------------------------------------------------------------------------------------------------
Unit value $26.08 $ 27.22 $ 28.28 $ 29.41 $ 30.55
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,000 1,021 1,013 973 1,261
- -------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND
- -------------------------------------------------------------------------------------------------------
Unit value $93.87 $108.38 $112.65 $121.30 $130.07
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 53 135 196 283 557
- -------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- -------------------------------------------------------------------------------------------------------
Unit value -- -- -- $125.55 $118.57
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 448 1,101
- -------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- -------------------------------------------------------------------------------------------------------
Unit value -- -- -- $161.04 $121.34
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 1,090 256
- -------------------------------------------------------------------------------------------------------
MFS RESEARCH
- -------------------------------------------------------------------------------------------------------
Unit value -- -- -- $140.83 $115.01
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 720 236
- -------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY
- -------------------------------------------------------------------------------------------------------
Unit value -- -- -- $127.67 $115.97
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 444 145
- -------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- -------------------------------------------------------------------------------------------------------
Unit value -- -- -- $109.37 $103.77
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 84 52
- -------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY
- -------------------------------------------------------------------------------------------------------
Unit value -- -- -- $ 57.18 $ 79.41
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 217 109
- -------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- -------------------------------------------------------------------------------------------------------
Unit value -- -- -- $125.16 $113.46
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 275 109
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
B-6 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
--------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM GROWTH & INCOME VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 115.17 $ 128.20
- -------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 250 581
- -------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- -------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 121.04 $ 130.25
- -------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 475 1,070
- -------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- -------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 109.49 $ 97.61
- -------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 671 387
- -------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 104.82 $ 118.06
- -------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 859 577
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Statement of additional
information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Additional Loan Provisions 2
Tax Rules: Special Aspects 3
Required Minimum Distributions Option 4
Accumulation Unit Values 5
Calculation of Annuity Payments 5
The Reorganization 6
Custodian and Independent Accountants 7
Alliance Money Market Option Yield Information 7
Other Yield Information 8
Key Factors in Retirement Planning 8
Long-Term Market Trends 12
Financial Statements 14
HOW TO OBTAIN AN EQUI-VEST STATEMENT OF ADDITIONAL INFORMATION FOR SEPARATE
ACCOUNT A
Call 1-800-628-6673 or send this request form to:
EQUI-VEST
Employer Sponsored Programs
Processing Office
The Equitable Life
P.O. Box 2996
New York, NY 10116-2996
Please send me an EQUI-VEST Statement of Additional Information dated May 3,
1999 (Employer-Sponsored Retirement Programs)
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
888-1175A
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
SUPPLEMENT DATED MAY 3, 1999
to
EQUI-VEST(R) PROSPECTUS
DATED MAY 3, 1999
FOR EMPLOYEES OF EMPLOYERS ASSOCIATED WITH REALTY ONE
This Supplement modifies certain information contained in the
prospectus dated May 3, 1999 ("Prospectus") as it relates to certain series 200
Trusteed Contracts offered by The Equitable Life Assurance Society of the United
States ("Equitable Life"). The Series 200 Trusteed Contracts, modified as
described below (the "Modified Trusteed Contracts"), are offered to employees of
employers associated with Realty One, a real estate brokerage firm, on the basis
described in the Prospectus, except that the Withdrawal Charge applicable to the
Modified Trusteed Contracts will be waived for all plan assets invested under
such Contracts, except for any withdrawal of plan assets which were invested in
the guaranteed interest option less than 120 days prior to such withdrawal.
Except as modified above, the discussion under "Withdrawal charge for series 100
and 200 contracts" under "Charges and expenses" with respect to Trusteed
Contracts is applicable to the Modified Trusteed Contracts.
The annual administrative charge is waived.
888-1145
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SUPPLEMENT DATED MAY 3, 1999
TO
EQUI-VEST(R) PROSPECTUS
DATED MAY 3, 1999
For Employees of Allegheny County, Pennsylvania
This Supplement modifies certain information contained in the prospectus dated
May 3, 1999 ("Prospectus") as it relates to the Series 200 EDC Contracts offered
by The Equitable Life Assurance Society of the United States ("Equitable Life").
The Series 200 EDC Contracts, modified as described below (the "Modified EDC
Contracts"), are offered to employees of Allegheny County, Pennsylvania, on the
basis described in the Prospectus, except that the Withdrawal Charge and Annual
Administrative Charge applicable to the Modified EDC Contracts will be as
follows:
o Withdrawal Charge. The Withdrawal Charge ("WC") schedule for the Modified
EDC Contract is as follows:
Contract Year(s) WC
---------------- --
1 6%
2 5
3 4
4 3
5 2
6+ 0
This table replaces the table in the Prospectus under "Withdrawal charge for
series 100 and 200 contracts" in "Charges and expenses."
No WC will apply in the event of the:
-- Death
-- Disability
-- Separation from service from Allegheny County
-- Retirement of the participant.
The annual administrative charge is waived.
888-1146
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SUPPLEMENT DATED MAY 3, 1999
TO
EQUI-VEST(R) PROSPECTUS
DATED MAY 3, 1999
This supplement modifies certain information in the prospectus dated May 3, 1999
(the "Prospectus") for EQUI-VEST group and individual deferred variable annuity
contracts offered by Equitable Life. Equitable Life will offer its EQUI-VEST
Series 200 TSA contracts modified with Rider 95MDHOSP (the "Modified TSA
Contract") only to employees (age 75 and below) of hospitals and non-profit
healthcare organizations doing business in Maryland. This Supplement describes
the material differences between the Modified TSA Contract and the EQUI-VEST
Series 200 TSA contract described in the Prospectus. Terms in this Supplement
have the same meaning as in the Prospectus.
Material differences between the Modified TSA Contract and the TSA provisions
described in the EQUI-VEST Prospectus include the following:
o WITHDRAWAL CHARGE. The Withdrawal Charge schedule for the Modified TSA
Contract is as follows:
WITHDRAWAL CHARGES
------------------
CONTRACT YEAR(S) CHARGE
---------------- ------
1 6%
2 5
3 4
4 3
5 2
6+ 0
This table replaces the EQUI-VEST Series 200 Withdrawal Charge table in
"withdrawal charge for series 100 and 200 contracts" under "Charges and
expenses" in the Prospectus.
o No withdrawal charge will apply to funds transferred on or after
January 18, 1996 into the Modified TSA Contract from another tax
sheltered annuity contract qualified under Section 403(b) of the Code
and issued by an insurance company other than Equitable Life.
o LOANS. Loans will be available under the Modified TSA Contract when the
TSA plan is subject to the Employee Retirement Income Security Act of
1974 (ERISA). Only one outstanding loan will be permitted at any time.
There is a minimum loan amount of $1,000 and a maximum loan amount
which varies depending on the participant's account value but may never
exceed $50,000. For more complete details and rules on Loans see "Loans
from qualified plans and TSAs" in the Prospectus and "Additional Loan
Provisions" in the Statement of Additional Information.
o EXCEPTIONS TO THE WITHDRAWAL CHARGE. For the modified TSA Contract, the
Section in "Charges and expenses" has been revised as follows:
No charge will be applied to any amount withdrawn from the TSA Contract
if:
-- the annuitant has separated from service, or
-- the annuitant makes a withdrawal that qualifies as a hardship
withdrawal under the Plan and the Code, or
-- the annuitant makes a withdrawal at any time if he qualifies to
receive Social Security disability benefits as certified by the
Social Security Administration or any successor agency.
o ANNUAL ADMINISTRATIVE CHARGE. No annual administrative charge will be
charged to participants in the Modified TSA Contract.
FOR USE ONLY IN THE STATE OF MARYLAND
888-1148
1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SUPPLEMENT DATED MAY 3, 1999
TO
EQUI-VEST(R) PROSPECTUS
DATED MAY 3, 1999
This supplement modifies certain information in the prospectus dated May 3, 1999
(the "Prospectus") for EQUI-VEST group and individual deferred variable annuity
contracts offered by Equitable Life. Equitable Life will offer a modified
version of its EQUI-VEST Series 200 TSA contracts (the "Modified TSA Agreement")
only to participants in qualifying retirement programs of certain nonprofit
healthcare organizations. This Supplement describes the material differences
between the Modified TSA Agreement and the EQUI-VEST Series 200 TSA contract
described in the Prospectus. Terms in this Supplement have the same meaning as
in the Prospectus.
Material differences between the Modified TSA Agreement and the TSA provisions
described in the EQUI-VEST Prospectus include the following:
o WITHDRAWAL CHARGE. The Withdrawal Charge schedule for the Modified TSA
Agreement is as follows:
WITHDRAWAL CHARGES
------------------
CONTRACT YEAR(S) CHARGE
---------------- ------
1 6%
2 5
3 4
4 3
5 2
6+ 0
This table replaces the EQUI-VEST Series 200 Withdrawal Charge table in
"Withdrawal charge for series 100 and 200 contracts under charges and
expenses."
o EXCEPTIONS TO THE WITHDRAWAL CHARGE. For the modified TSA Agreement,
the section in "Charges and expenses" has been revised to add the
following waivers:
No charge will be applied to any amount withdrawn from the Modified TSA
Agreement if:
-- the annuitant has separated from service, or
-- the annuitant makes a withdrawal at any time if he qualifies to
receive Social Security disability benefits as certified by the
Social Security Administration or any successor agency, or
-- the annuitant makes a withdrawal that qualifies as a hardship
withdrawal under the Plan and the Code.
o ANNUAL ADMINISTRATIVE CHARGE. The annual administrative charge to
participants under the Modified TSA Agreement is at maximum the charge
described in the Prospectus -- that is, it is equal to the lesser of
$30 or 2% of the account value on the last business day of each year
(adjusted to include any withdrawals made during the year), to be
prorated for a fractional year. This charge may be reduced or waived
when a Modified TSA Agreement is used by the employer and the required
participant services are performed at a modified or minimum level.
FOR USE ONLY IN THE STATE OF ILLINOIS.
888-1161
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SUPPLEMENT DATED MAY 3, 1999
TO
EQUI-VEST(R) PROSPECTUS
DATED MAY 3, 1999
EQUI-VEST(R) EDC CONTRACTS (SERIES 100 AND SERIES 200)
OFFERED TO CERTAIN EMPLOYEES OF STATE AND MUNICIPAL GOVERNMENTS
WITHIN THE STATE OF IOWA
This Supplement adds to and modifies certain information contained in the
prospectus dated May 3, 1999 (PROSPECTUS) for EQUI-VEST(R) EMPLOYER-SPONSORED
RETIREMENT PROGRAMS offered by Equitable Life. Equitable Life will offer
EQUI-VEST(R) EDC, as described below (IOWA/ENHANCED EDC CONTRACTS), to fund
plans that meet the requirements of Internal Revenue Code Section 457 ("Section
457 Plans") sponsored by certain state and municipal governments described in
Section 457 of the Code, within the State of Iowa (EMPLOYER). Iowa/Enhanced EDC
Contracts will be available only when an Employer (i) makes contributions to a
Section 457 Plan, whether in addition to, or instead of, employee salary
reduction or elective deferred contributions, as applicable, (ii) has entered
into an agreement with Equitable Life that permits Equitable Life to offer
Iowa/Enhanced EDC Contracts as a funding vehicle for your Employer's Section 457
Plan; and (iii) has greater than $50 million in plan assets for all
Iowa/Enhanced EDC Contracts within the state of Iowa. Terms not otherwise
defined in this Supplement have the same meaning as in the Prospectus.
Employees of an Employer may participate under an Iowa/Enhanced EDC Contract on
the same basis and under the same terms and conditions described in the
Prospectus as applicable to EQUI-VEST(R) EDC Contracts, except for certain
material differences described in this Supplement. Participation under
Iowa/Enhanced EDC Contracts will be available to (i) annuitants, within the
state of Iowa, participating under EQUI-VEST EDC Contracts purchased prior to
the date of this Supplement and (ii) any annuitant participating under an
Iowa/Enhanced EDC Contract purchased as of or after the date of this Supplement.
THE "EQUI-VEST EMPLOYER-SPONSORED RETIREMENT PROGRAMS AT A GLANCE -- KEY
FEATURES" SECTION OF THE PROSPECTUS HAS BEEN MODIFIED FOR THE FEES AND EXPENSES
UNDER SERIES 100 AND 200 AS FOLLOWS:
ANNUAL ADMINISTRATIVE CHARGE. The annual administrative charge is waived and
does not apply to Iowa/Enhanced EDC Contracts.
Annual expenses of The Hudson River Trust and EQ Advisors Trust Portfolios
include 12b-1 fees for The Hudson River Trust and EQ Advisors Trust for
Iowa/Enhanced EDC Contracts.
FEE TABLES. For Iowa/Enhanced EDC Contracts, the following fee tables replace
EQUI-VEST Series 100 and EQUI-VEST Series 200 fee tables. You should refer to
the fee tables of the Prospectus for all other applicable expenses related to
EQUI-VEST Series 100 and Series 200 Contracts. Please also see the discussion of
the modifications to "Charges and expenses" set forth in the Supplement.
FOR USE ONLY IN THE STATE OF IOWA
888-1170
<PAGE>
TABLE 1: EQUI-VEST SERIES 100
<TABLE>
<CAPTION>
====================================================================================================================================
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
MARKET SECURITIES BOND YIELD INCOME INDEX
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Separate Account Annual
Expenses
Mortality and Expense Risk
Fees (1) .65% .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Separate Account Annual
Expenses .90% .90% .90% .90% .90% .90%
HRT Annual Expenses
Investment Advisory Fees .35% .50% .53% .60% .55% .31%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .25% .25%
Other Expenses .02% .05% .03% .03% .03% .03%
- ------------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual
Expenses (7) .62% .80% .81% .88% .83% .59%
====================================================================================================================================
</TABLE>
TABLE 1: EQUI-VEST SERIES 100
<TABLE>
<CAPTION>
====================================================================================================================================
ALLIANCE ALLIANCE ALLIANCE ALLIANCE ALLIANCE
COM- ALLIANCE AGGRES- SMALL CONSER- ALLIANCE GROWTH
MON ALLIANCE INTER- SIVE CAP VATIVE BAL- INVES-
STOCK GLOBAL NATIONAL STOCK GROWTH INVESTORS ANCED TORS
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Separate Account
Annual Expenses
Mortality and Expense
Risk Fees (1) .65% .65% .65% .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Separate Account
Annual Expenses .90% .90% .90% .90% .90% .90% .90% .90%
HRT Annual Expenses
Investment Advisory
Fees .36% .64% .90% .54% .90% .48% .41% .51%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .24% .25% .25% .25%
Other Expenses .03% .07% .16% .03% .06% .05% .04% .04%
- ------------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual
Expenses (7) .64% .96% 1.31% .82% 1.20% .78% .70% .80%
====================================================================================================================================
</TABLE>
FOR USE ONLY IN THE STATE OF IOWA
2
<PAGE>
TABLE 1: EQUI-VEST SERIES 100 (CONTINUED)
<TABLE>
<CAPTION>
==============================================================================================================================
T. ROWE T. ROWE
PRICE INTER- PRICE EQ/PUTNAM
NATIONAL EQUITY GROWTH & EQ/PUTNAM MFS
STOCK INCOME INCOME VALUE BALANCED RESEARCH
==============================================================================================================================
<S> <C> <C> <C> <C> <C>
Separate Account Annual Expenses
Mortality and Expense Risk
Fees (1) .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------
Total Separate Account Annual
Expenses .90% .90% .90% .90% .90%
EQAT Annual Expenses
Investment Management and
Advisory Fees .75% .55% .55% .55% .55%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .25%
Other Expenses .20% .05% .05% .10% .05%
- ------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses
(After Expense Limitation) (9) 1.20% .85% .85% .90% .85%
==============================================================================================================================
</TABLE>
TABLE 1: EQUI-VEST SERIES 100
<TABLE>
<CAPTION>
==============================================================================================================================
MORGAN
MFS STANLEY WARBURG MERRILL
EMERGING EMERGING PINCUS SMALL MERRILL LYNCH BASIC
GROWTH MARKETS COMPANY LYNCH WORLD VALUE
COMPANIES EQUITY VALUE STRATEGY EQUITY
==============================================================================================================================
<S> <C> <C> <C> <C> <C>
Separate Account Annual Expenses
Mortality and Expense Risk
Fees (1) .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------
Total Separate Account Annual
Expenses .90% .90% .90% .90% .90%
EQAT Annual Expenses
Investment Management and
Advisory Fees .55% 1.15% .65% .70% .55%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .25%
Other Expenses .05% .35% .10% .25% .05%
- ------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses
(After Expense Limitation) (9) .85% 1.75% 1.00% 1.20% .85%
==============================================================================================================================
</TABLE>
FOR USE ONLY IN THE STATE OF IOWA
3
<PAGE>
TABLE 2: EQUI-VEST SERIES 200
<TABLE>
<CAPTION>
====================================================================================================================================
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
MARKET SECURITIES BOND YIELD INCOME INDEX
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Separate Account Annual
Expenses
Mortality and Expense Risk
Fees (1) .65% .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Separate Account Annual Expenses
.90% .90% .90% .90% .90% .90%
HRT Annual Expenses
Investment Advisory Fees .35% .50% .53% .60% .55% .31%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .25% .25%
Other Expenses .02% .05% .03% .03% .03% .03%
- ------------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual
Expenses (7) .62% .80% .81% .88% .83% .59%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE 2: EQUI-VEST SERIES 200
<TABLE>
<CAPTION>
====================================================================================================================================
ALLIANCE ALLIANCE ALLIANCE ALLIANCE ALLIANCE
COM- ALLIANCE AGGRES- SMALL CONSER- ALLIANCE GROWTH
MON ALLIANCE INTER- SIVE CAP VATIVE BAL- INVES-
STOCK GLOBAL NATIONAL STOCK GROWTH INVESTORS ANCED TORS
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Separate Account Annual
Expenses
Mortality and Expense Risk
Fees (1) .65% .65% .65% .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25% .25% .25% .25%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Separate Account Annual
Expenses .90% .90% .90% .90% .90% .90% .90% .90%
HRT Annual Expenses
Investment Advisory Fees .36% .64% .90% .54% .90% .48% .41% .51%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .24% .25% .25% .25%
Other Expenses .03% .07% .16% .03% .06% .05% .04% .04%
- -----------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual
Expenses (7) .64% .96% 1.31% .82% 1.20% .78% .70% .80%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FOR USE ONLY IN THE STATE OF IOWA
4
<PAGE>
TABLE 2: EQUI-VEST SERIES 200 (CONTINUED)
<TABLE>
<CAPTION>
==============================================================================================================================
T. ROWE T. ROWE
PRICE PRICE EQ/PUTNAM
INTER- EQUITY GROWTH & EQ/PUTNAM MFS
NATIONAL INCOME INCOME VALUE BALANCED RESEARCH
==============================================================================================================================
<S> <C> <C> <C> <C> <C>
Separate Account Annual Expenses
Mortality and Expense Risk
Fees (1) .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------
Total Separate Account Annual
Expenses .90% .90% .90% .90% .90%
EQAT Annual Expenses
Investment Management and
Advisory Fees .75% .55% .55% .55% .55%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .25%
Other Expenses .20% .05% .05% .10% .05%
- ------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses
(After Expense Limitation) (9) 1.20% .85% .85% .90% .85%
==============================================================================================================================
</TABLE>
TABLE 2: EQUI-VEST SERIES 200
<TABLE>
<CAPTION>
==============================================================================================================================
MORGAN
MFS STANLEY WARBURG MERRILL
EMERGING EMERGING PINCUS SMALL MERRILL LYNCH BASIC
GROWTH MARKETS COMPANY LYNCH WORLD VALUE
COMPANIES EQUITY VALUE STRATEGY EQUITY
==============================================================================================================================
<S> <C> <C> <C> <C> <C>
Separate Account Annual Expenses
Mortality and Expense Risk
Fees (1) .65% .65% .65% .65% .65%
Other Expenses (2) .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------
Total Separate Account Annual
Expenses .90% .90% .90% .90% .90%
EQAT Annual Expenses
Investment Management and
Advisory Fees .55% 1.15% .65% .70% .55%
Rule 12b-1 Fees (8) .25% .25% .25% .25% .25%
Other Expenses .05% .35% .10% .25% .05%
- ------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses
(After Expense Limitation) (9) .85% 1.75% 1.00% 1.20% .85%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------
Notes 3 and 4 of the Fee Table are not applicable to Iowa/Enhanced EDC
Contracts. As to certain limitations on charges, see "Limitations on
Charges" under "Charges and expenses" below for the modifications to the
"Charges and expenses" section of the Prospectus. Also, Note 8 is revised
as follows:
(8) The respective Class 1B shares of HRT and EQAT are subject to fees imposed
under distribution plans (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
of their Portfolios may charge annually up to 0.25% of the average daily
net assets of a Portfolio attributable to its Class 1B shares in respect of
activities primarily intended to result in the sale of the Class 1B shares.
The 12b-1 fees will not be increased for the life of the Iowa/Enhanced EDC
Contracts. The Rule 12b-1 Plan for the Alliance Small Cap Growth Portfolio
provides that Equitable Distributors, Inc. ("EDI") will receive an annual
fee not to exceed the lesser of (a) 0.25% of the average daily net assets
of the Portfolio attributable to Class 1B shares and (b) an amount that,
when added to certain other expenses of the Class 1B shares, would result
in the ratio of expenses to average daily net assets attributable to Class
1B shares equaling 1.20%. Absent the expense limitation, the total annual
expenses for 1998 for the Alliance Small Cap Growth Portfolio would have
been 1.21%.
FOR USE ONLY IN THE STATE OF IOWA
5
<PAGE>
"CHARGES AND EXPENSES" OF THE PROSPECTUS HAS BEEN MODIFIED AS FOLLOWS:
CHARGES TO PORTFOLIOS. The following paragraph is added to "Charges that the
trusts deduct" after the HRT Portfolio investment advisory fee table:
The Rule 12b-1 Plan adopted with respect to The Hudson River Trust's Class 1B
shares provides that The Hudson River Trust, 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 1B shares in respect of activities primarily intended
to result in the sale of the Class 1B shares. This fee will not be increased for
the life of the Iowa/Enhanced EDC Contracts. Fees and expenses are described
more fully in The Hudson River Trust prospectus.
LIMITATION ON CHARGES. The discussion under "Limitation on Charges" is
applicable to Iowa/Enhanced EDC Contracts attributable to EQUI-VEST EDC
Contracts issued to fund Section 457 Plans prior to the date of this Supplement.
The discussion, however, does not apply to Iowa/Enhanced EDC Contracts issued on
and after the date of this Supplement.
CHARGES THAT THE TRUSTS DEDUCT. The discussion under "Charges that the trusts
deduct" through the Series 200 table of specific charges is replaced by the
following:
We make a daily charge (after any deductions to provide for taxes) against the
assets held in each of the Investment Funds under an Iowa/Enhanced EDC Contract.
This charge is reflected in the unit values and made at an annual rate not to
exceed 0.90% for each of the variable investment options. The charge is for
financial accounting, death benefits, mortality risk, expenses and expense risk.
The specific charges for Series 100 and 200 Iowa/Enhanced EDC Contracts are:
expenses and financial accounting -- 0.25%; expense risks -- 0.30%; and
mortality risks and death benefits -- 0.35%.
ANNUAL ADMINISTRATIVE CHARGE. The annual administrative charge under
Iowa/Enhanced EDC Contracts is waived.
WITHDRAWAL CHARGE. The following will apply to withdrawals under Iowa/Enhanced
EDC Contracts, in addition to the exceptions to the withdrawal charge discussed
under the section entitled "Charges under series 100 and 200 contracts."
o the annuitant retires pursuant to terms of the Section 457 plan, or
separates from service;
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 elects a withdrawal that qualifies as a hardship withdrawal
under the Code;
o the annuitant has been confined to a nursing home for more than a 90-day
period (or such other period, if required in Iowa 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:
o its main function is to provide skilled, intermediate or custodial nursing
care;
o it provides continuous room and board to three or more persons;
o it is supervised by a registered nurse or practical nurse;
o it keeps daily medical records of each patient;
o it controls and records all medications dispensed; and
o its primary service is other than to provide housing for residents.
FOR USE ONLY IN THE STATE OF IOWA
6
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Supplement Dated May 3, 1999
To
EQUI-VEST(R) PROSPECTUS
Dated May 3, 1999
EQUI-VEST(R) TSA CONTRACTS
(SERIES 100 AND SERIES 200)
OFFERED TO CERTAIN PUBLIC SCHOOL EMPLOYEES WITHIN THE STATE OF INDIANA
This Supplement adds to and modifies certain information contained in the
prospectus dated May 3, 1999 ("PROSPECTUS") for EQUI-VEST(R) EMPLOYER-SPONSORED
RETIREMENT PROGRAMS offered by Equitable Life. Equitable Life will offer its
EQUI-VEST(R) Series 100 and Series 200 TSA Contracts, as described below
("MODIFIED TSA CONTRACTS"), to certain participants in plans that meet the
requirements of Internal Revenue Code Section 403(b) (referred to as "Section
403(b) Plans") sponsored by a public education institution described in "Tax
information" under "Tax-Sheltered annuity arrangements (TSAs)" as "Section
403(b) Plans") sponsored by a public education institution described in Section
403(b)(1)(A)(ii) of the Code within the State of Indiana ("EMPLOYER"). Modified
TSA Contracts will be available only when an Employer makes contributions to a
Section 403(b) Plan, whether in addition to, or instead of, employee salary
reduction or elective deferred contributions, as applicable, and has entered
into an agreement with Equitable Life that permits Equitable Life to offer to
you Modified TSA Contracts as a funding vehicle for your Employer's Section
403(b) Plan ("MODIFIED TSA AGREEMENT"). Terms not otherwise defined in this
Supplement have the same meaning as in the Prospectus.
MODIFIED TSA AGREEMENTS AND CONTRACTS: EXCEPTIONS TO WITHDRAWAL CHARGE. Modified
TSA Contracts are offered to participants on the same basis and under the same
terms and conditions described in the Prospectus as applicable to the
EQUI-VEST(R) TSA Series 100 and Series 200 Contracts, except for certain
material differences described in this Supplement.
Your Employer may notify us of its termination of a Modified TSA Agreement
during the seven-day period ("EMPLOYER WINDOW PERIOD") starting on the fifth
anniversary of the initial Modified TSA Contract purchased pursuant to a
Modified TSA Agreement. If your Employer terminates its Modified TSA Agreement
during an Employer Window Period, then you will have a 30-day period ("ANNUITANT
WINDOW PERIOD"), starting on the first business day after the end of an Employer
Window Period, during which to notify our Processing Office, in writing, whether
you desire to terminate your Modified TSA Contract and transfer your Modified
TSA Contract's account value to a successor funding vehicle without a withdrawal
charge being applied.
The Prospectus section entitled "Charges under series 100 and 200 contracts" in
"Charges and expenses" has been revised to add the following waiver:
No charge will be applied to any amount withdrawn from your Modified TSA
Contract if:
o your Employer terminates its Modified TSA Agreement with us; and within the
30-day Annuitant Window Period, you choose to transfer the account value
under your Modified TSA Contract to a successor funding vehicle.
<PAGE>
FOR USE ONLY IN THE STATE OF INDIANA
Your opportunity to transfer your account value without paying a withdrawal
charge is wholly dependent upon your Employer providing you with timely notice
of the termination of its Modified TSA Agreement with us and notifying you of
the Annuitant Window Period. EQUITABLE LIFE IS NOT OBLIGED TO PROVIDE YOU WITH
INFORMATION RELATING TO YOUR EMPLOYER'S DECISION TO TERMINATE ITS MODIFIED TSA
AGREEMENT.
You are not required to make such a transfer and you may decide to continue your
Modified TSA Contract even if your Employer terminates its Modified TSA
Agreement.
Guaranteed Interest Option Rates. Until the start of the Employer Window Period
all Modified TSA Contracts held by Annuitants of one Employer ("Unit") will be
credited with a current rate of interest in the Guaranteed Interest Option up to
0.50% lower than the current rate for all other EQUI-VEST(R) Series 100 and
Series 200 TSA Contracts purchased on the same date and not purchased pursuant
to a Modified TSA Agreement or other modified service agreement Equitable Life
has with an Employer. Equitable Life reserves the right to apply different
interest percentage rates to Units, at its discretion, based upon variances in
Unit experience, expenses and other factors. The current rate credited under
Modified TSA Contracts, however, will never be lower than the minimum guaranteed
rates under all EQUI-VEST(R) Series 100 and Series 200 TSA Contracts.
See "Your contracts value in the guaranteed interest option" in the Prospectus.
Once the Employer Window Period begins, the rates for any Modified TSA Contract
within a Unit will be the same as the rates in effect for all other EQUI-VEST(R)
Series 100 and Series 200 TSA Contracts purchased on the same date and not
purchased pursuant to a Modified TSA Agreement or other modified service
agreement Equitable Life has with an Employer.
ANNUAL ADMINISTRATIVE CHARGE. The annual administrative charge under Modified
TSA Contracts may be reduced or waived when participant services are performed
at a modified or minimum level under a Modified TSA Agreement. This annual
administrative charge may continue to be reduced or waived even if your Employer
terminates its Modified TSA Agreement with us. Any reduction or waiver to an
annual administrative charge will not be unfairly discriminatory. See "Charges
and expenses" in the Prospectus.
FOR USE ONLY IN THE STATE OF INDIANA
2
<PAGE>
EQUI-VEST(R)
A COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CONTRACT
STATEMENT OF ADDITIONAL INFORMATION
MAY 3, 1999
------------------------------------------
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NY 10104
- --------------------------------------------------------------------------------
This statement of additional information ("SAI") is not a prospectus. It should
be read in conjunction with the related prospectus for EQUI-VEST, dated May 3,
1999. That prospectus provides detailed information concerning the contracts and
the variable investment options, as well as the fixed maturity options, that
fund the contracts. Each variable investment option is a subaccount of Equitable
Life's Separate Account A. The fixed maturity options are part of Equitable
Life's general account. Definitions of special terms used in the SAI are found
in the prospectus.
A copy of the prospectus is available free of charge by writing the Processing
Office (P.O. Box 2996, New York, NY 10116-2996), by calling toll-free,
1-800-628-6673, or by contacting your Equitable associate.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
Required Minimum Distributions Option 2
- --------------------------------------------------------------------------------
Accumulation Unit Values 2
- --------------------------------------------------------------------------------
Calculation of Annuity Payments 2
- --------------------------------------------------------------------------------
The Reorganization 4
- --------------------------------------------------------------------------------
Custodian and Independent Accountants 4
- --------------------------------------------------------------------------------
Alliance Money Market Option Yield Information 4
- --------------------------------------------------------------------------------
Other Yield Information 5
- --------------------------------------------------------------------------------
Key Factors in Retirement Planning 5
- --------------------------------------------------------------------------------
Long-Term Market Trends 9
- --------------------------------------------------------------------------------
Financial Statements 11
- --------------------------------------------------------------------------------
Copyright 1999 The Equitable Life Assurance Society
of the United States, New York, New York 10104
All rights reserved.
____________________ Cat. No. 127980
888-1175
<PAGE>
- --------------------------------------------------------------------------------
REQUIRED MINIMUM DISTRIBUTIONS
OPTION
If you elect this feature designed for annuitants age 70 1/2 or older, described
in the prospectus, each year we calculate your minimum distribution based on the
account value as of December 31 of the prior calendar year and then calculate
the minimum distribution amount based on the various choices you make. This does
not apply to Roth IRA or NQ Contracts.
You may choose whether the required minimum distribution will be calculated
based on your life expectancy alone, or based on the joint life expectancies of
you and your spouse. You may also choose (1) to have us recalculate your life
expectancy (or joint life expectancy) each year, or (2) not recalculate your
life expectancy. If you have chosen a joint life expectancy method of
calculation with your spouse, you may choose to either have both lives
recalculated or not recalculated.
When we recalculate life expectancy, that means that each calendar year we see
what each individual's life expectancy is under Treasury Regulations. If life
expectancy is not recalculated, it means that it is determined once, for the
initial year, and in every subsequent year that number is reduced by one more
year.
If you do not specify a method, IRS regulations require us to base a calculation
on your life expectancy alone, recalculating it each year. If you do not specify
that we should recalculate life expectancy, you cannot later apply your account
value to an annuity payout.
The minimum distribution calculation takes into account partial withdrawals made
during the current calendar year but prior to the date we determine your minimum
distribution amount, except that when the required minimum distribution is
elected in the year in which the annuitant attains age 71 1/2, no adjustment for
partial withdrawals will be made for any withdrawals made between January 1 and
April 1 of the year in which the election is made.
Our required minimum distribution option should not be elected if the annuitant
continues to work beyond age 70 1/2 and contributions continue to be made into
the contract. To do so could result in an insufficient distribution. You must
request the amount to be separately calculated each year to ensure that you
withdraw the correct amount.
Please note that our required minimum distribution option does not provide for
all the flexibility provided by federal law. For example, federal law permits
you to recalculate your life expectancy and not your spouse's and to choose the
joint life expectancy method with a beneficiary other than your spouse. See your
tax adviser.
- --------------------------------------------------------------------------------
ACCUMULATION UNIT VALUES
Unit values are determined at the end of each "valuation period" for each of the
variable investment options. A valuation period is each business day together
with any consecutive preceding non-business day. The unit values for EQUI-VEST
may vary. The method of calculating unit values is set forth below.
The unit value for a variable investment option for any valuation period is
equal to the unit value for the preceding valuation period multiplied by the
"net investment factor" for the variable investment option for that valuation
period. The net investment factor is:
(a/b) - c
where:
(a) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the valuation period before giving
effect to any amounts allocated to or withdrawn from the variable
investment options for the valuation period. For this purpose, we use the
share value reported to us by The Hudson River Trust. This share value is
after deduction for investment advisory fees and direct expenses of The
Hudson River Trust.
(b) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the preceding valuation period (after
any amounts allocated or withdrawn for that valuation period).
(c) is the daily Separate Account A asset charge for the expenses of the
contracts times the number of calendar days in the valuation period, plus
any charge for taxes or amounts set aside as a reserve for taxes.
- --------------------------------------------------------------------------------
CALCULATION OF ANNUITY PAYMENTS
The calculation of monthly annuity payments under a contract takes into account
the number of annuity units of each variable investment option credited under a
contract, their respective annuity unit values, and a net investment factor. The
annuity unit values used for EQUI-VEST may vary, although the method of
calculating annuity unit values set forth below applies to all contracts.
Annuity unit values will also vary by variable investment option.
For each valuation period, the adjusted net investment factor is equal to the
net investment factor for the variable investment option reduced for each day in
the valuation period by:
o .00013366 of the net investment factor for a contract with an assumed base
rate of net investment return of 5% a year; or
2
<PAGE>
- --------------------------------------------------------------------------------
o .00009425 of the net investment factor for a contract with an assumed base
rate of net investment return of 3 1/2%.
Because of this adjustment, the annuity unit value rises and falls depending on
whether the actual rate of net investment return (after charges) is higher or
lower than the assumed base rate.
The assumed base rate will be 5%, except in states where that rate is not
permitted. Annuity payments based upon an assumed base rate of 3 1/2% will at
first be smaller than those based upon a 5% assumed base rate. Payments based
upon a 3 1/2% rate, however, will rise more rapidly when unit values are rising,
and payments will fall more slowly when unit values are falling than those based
upon a 5% rate.
The amounts of variable annuity payments are determined as follows:
Payments normally start on the business day specified on your election form, or
on such other future date as specified therein. The first three monthly payments
are the same. The initial payment will be calculated using the basis guaranteed
in the applicable EQUI-VEST contract or our current basis, whichever would
provide the higher initial benefit.
The first three payments depend on the assumed base rate of net investment
return and the form of annuity chosen (and any fixed period). If the annuity
involves a life contingency, the risk class and the age of the annuitants will
affect payments.
Payments after the first three will vary according to the investment performance
of the variable investment option(s) selected to fund the variable payments.
After that, each monthly payment will be calculated by multiplying the number of
annuity units credited by the average annuity unit value for the selected fund
for the second calendar month immediately preceding the due date of the payment.
The number of units is calculated by dividing the first monthly payment by the
annuity unit value for the valuation period which includes the due date of the
first monthly payment. The average annuity unit value is the average of the
annuity unit values for the valuation periods ending in that month.
Illustration of calculation of annuity payments
To show how we determine variable annuity payments, assume that the account
value for an EQUI-VEST Series 100 Contract on a retirement date is enough to
fund an annuity with a monthly payment of $100 and that the annuity unit value
of the selected variable investment option for the valuation period that
includes the due date of the first annuity payment is $3.74. The number of
annuity units credited under the contract would be 26.74 (100 divided by 3.74 =
26.74). Based on a hypothetical average annuity unit value of $3.56 in October
1998, the annuity payment due in December 1998 would be $95.19 (the number of
units (26.74) times $3.56).
The examples below show what the annuity payment would have been for December
31, 1998 for each base rate of net investment return, assuming that $100,000 was
applied at the beginning of each period shown, for a female age 75, to purchase
a variable Life Annuity with 10 Years Period Certain, with initial payment of
$714.56 and $793.28, using assumed base rates of 3.50% and 5.00% respectively:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
BASE RATE YEAR YEARS YEARS YEARS INCEPTION
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance 3.50% $717.08 $ 723.09 $ 722.91 $ 760.89 --
Money Market 5.00% $787.10 $ 771.08 $ 748.70 $ 734.10 --
Alliance Intermediate 3.50% $740.77 $ 740.02 $ 737.66 -- $ 846.92
Government Securities 5.00% $813.09 $ 798.73 $ 764.12 -- $ 841.79
Alliance 3.50% $743.96 $ 776.91 $ 784.09 -- $ 770.85
Quality Bond 5.00% $816.60 $ 828.48 $ 812.22 -- $ 795.60
Alliance 3.50% $632.69 $ 836.31 $ 885.99 $1,247.67 $1,302.13
High Yield 5.00% $694.38 $ 891.83 $ 917.78 $1,201.43 $1,217.98
Alliance 3.50% $693.20 $ 958.25 $1,074.25 -- $1,058.78
Growth & Income 5.00% $760.86 $1,021.82 $1,112.75 -- $1,092.75
Alliance 3.50% $756.76 $1,115.00 -- -- $1,408.99
Equity Index 5.00% $830.83 $1,188.98 -- -- $1,463.00
Alliance 3.50% $731.14 $1,065.71 $1,254.52 $2,023.67 --
Common Stock 5.00% $802.51 $1,136.41 $1,300.15 $1,957.01 --
Alliance 3.50% $697.40 $ 809.60 $ 919.90 $1,478.55 $1,332.96
Global 5.00% $765.47 $ 863.32 $ 952.87 $1,423.80 $1,258.62
Alliance 3.50% $678.20 $ 655.67 -- -- $ 700.53
International 5.00% $744.40 $ 699.17 -- -- $ 739.04
Alliance 3.50% $571.22 $ 702.42 $ 809.21 $2,095.69 --
Aggressive Stock 5.00% $626.97 $ 749.03 $ 837.21 $2,010.32 --
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
BASE RATE YEAR YEARS YEARS YEARS INCEPTION
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance 3.50% $543.49 -- -- -- $ 572.33
Small Cap Growth 5.00% $596.55 -- -- -- $ 623.67
Alliance 3.50% $737.39 $ 797.72 $ 837.07 -- $1,051.75
Conservative Investors 5.00% $809.37 $ 850.66 $ 867.09 -- $1,024.01
Alliance 3.50% $731.70 $ 853.32 $ 853.79 $1,312.02 --
Balanced 5.00% $803.12 $ 909.95 $ 884.79 $1,268.64 --
Alliance 3.50% $716.91 $ 856.11 $ 952.24 -- $1,609.21
Growth Investors 5.00% $786.69 $ 912.92 $ 986.38 -- $1,566.78
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE REORGANIZATION
Equitable Life established Separate Account A as a stock account on August 1,
1968. It was one of four separate investment accounts used to fund retirement
benefits under variable annuity certificates issued by us. Each of these
separate accounts, which included the predecessors to the Alliance Money Market
Fund, Alliance Balanced Fund, Alliance Common Stock Fund and Alliance Aggressive
Stock Fund, was organized as an open-end management investment company, with its
own investment objectives and policies. Collectively these separate accounts, as
well as two other separate accounts which had been used to fund retirement
benefits under certain other annuity contracts, are called the "predecessor
separate accounts."
On December 18, 1987, the predecessor separate accounts were combined in part
and reorganized into the Alliance Money Market, Alliance Balanced, Alliance
Common Stock and Alliance Aggressive Stock Funds of Separate Account A. In
connection with the Reorganization, all of the assets and investment-related
liabilities of the predecessor separate accounts were transferred to a
corresponding portfolio of The Equitable Trust in exchange for shares of the
portfolios of The Equitable Trust, which were issued to these corresponding
Funds of Separate Account A. On September 6, 1991, all of the shares of The
Equitable Trust held by these Funds were replaced by shares of Portfolios of The
Hudson River Trust corresponding to these Funds of Separate Account A.
- --------------------------------------------------------------------------------
CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable Life is the custodian for the shares of The Hudson River Trust and EQ
Advisors Trust owned by the variable annuity options.
The financial statements of Separate Account A as at December 31, 1998 and for
the periods ended December 31, 1998 and 1997, and the consolidated financial
statements of Equitable Life as at December 31, 1998 and 1997 and for each of
the three years ended December 31, 1998 included in this SAI have been so
incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of such firm as experts in
auditing and accounting.
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET OPTION YIELD INFORMATION
The Alliance Money Market option calculates yield information for seven-day
periods. To determine the seven-day rate of return, the net change in a unit
value is computed by subtracting the unit value at the beginning of the period
from the unit value, exclusive of capital changes, at the end of the period.
The net change is then reduced by the average administrative charge factor for
your contract. This reduction is made to recognize the deduction of the annual
administrative charge, which is not reflected in the unit value. See the
applicable "Annual administrative charge" section under "Charges and expenses"
in the prospectus. Unit values reflect all other accrued expenses of the
Alliance Money Market option.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain the adjusted base period rate of return. This seven-day
adjusted base period return is then multiplied by 365/7 to produce an annualized
seven-day current yield figure carried to the nearest one-hundredth of one
percent.
The actual dollar amount of the annual administrative charge for EQUI-VEST that
is deducted from the Alliance Money Market option will vary for each contract
and the percentage of the aggregate account value allocated to the Alliance
Money Market option. To determine the effect of the annual administrative charge
on the yield, we start with the actual aggregate annual administrative charges,
as a percentage of total assets held under EQUI-VEST. This amount is multiplied
by 365/7 to produce an average administrative charge factor which is used in
weekly yield computations for the ensuing year. The average administrative
charge is then divided by the number of Alliance Money Market option units for
the EQUI-VEST series contract as of the end of the prior calendar year, and the
resulting quotient is deducted from the net change in unit value for the
seven-day period.
The effective yield is obtained by modifying the current yield to give effect to
the compounding nature
4
<PAGE>
- --------------------------------------------------------------------------------
of the Alliance Money Market option's investments, as follows: the unannualized
adjusted base period return is compounded by adding one to the adjusted base
period return, raising the sum to a power equal to 365 divided by 7, and
subtracting one from the result, i.e., effective yield = (base period return +
1)365/7 - 1. The Alliance Money Market option yields will fluctuate daily.
Accordingly, yields for any given period are not necessarily representative of
future results. In addition, the value of units of the Alliance Money Market
option will fluctuate and not remain constant.
The Alliance Money Market option yields reflect charges that are not normally
reflected in the yields of other investments and therefore may be lower when
compared with yields of other investments. Alliance Money Market option yields
should not be compared to the return on fixed-rate investments which guarantee
rates of interest for specified periods, such as the guaranteed interest account
or bank deposits. The yield should not be compared to the yield of money market
funds made available to the general public because their yields usually are
calculated on the basis of a constant $1 price per share and they pay out
earnings in dividends which accrue on a daily basis.
While the Alliance Money Market option yields will vary among the different
EQUI-VEST contracts, the same method of calculating Alliance Money Market option
yields applies. The seven-day current yield and effective yield figures set
forth below reflect the highest charges that are currently being assessed under
any EQUI-VEST contract and are for illustrative purposes only.
The seven-day current yield for the Alliance Money Market option was 3.30% for
EQUI-VEST Series 100 and 200 and 3.35% for Series 300 and 400, and 3.25% for
Series 500 for the period ended December 31, 1998. The effective yield for the
Alliance Money Market option for that period was 3.36% for EQUI-VEST Series 100
and 200 and 3.40% for Series 300 and 400, and 3.30% for Series 500. Because
these yields reflect the deduction of Separate Account A expenses, including the
annual or annuity administrative charge, they are lower than the corresponding
yield figures for the Alliance Money Market Portfolio which reflect only the
deduction of Trust-level expenses.
- --------------------------------------------------------------------------------
OTHER YIELD INFORMATION
Thirty-day yields may vary according to the series of your EQUI-VEST contract,
although the same method of calculating variable investment option yields
applies. The yield figures set forth below reflect the highest charges that are
currently being assessed under any series of EQUI-VEST contract.
The effective yield is obtained by giving effect to the compounding nature of
the variable investment option's investments, as follows: the sum of the 30-day
adjusted return, plus one, is raised to a power equal to 365 divided by 30, and
subtracting one from the result.
The 30-day yields for EQUI-VEST Series 100, 200, 300 and 400 contracts for the
period ended December 31, 1998 were 3.38% for the Alliance Intermediate
Government Securities option, 3.76% for the Alliance Quality Bond option and
13.13% for the Alliance High Yield option. The 30-day yields for EQUI-VEST
series 500 contracts for the period ended December 31, 1998 were 3.27% for the
Alliance Intermediate Government Securities option, 3.65% for the Alliance
Quality Bond option and 13.02% for the Alliance High Yield option. Because these
yields reflect the deduction of Separate Account A expenses, including the
annual administrative charge, they are lower than the yield figures for the
corresponding Portfolios which reflect only the deduction of Trust-level
expenses.
- --------------------------------------------------------------------------------
KEY FACTORS IN RETIREMENT PLANNING
INTRODUCTION
Equitable Life offers retirement programs that are available to help meet the
retirement needs of individuals and of employers, businesses, and certain
tax-exempt organizations. In assessing these retirement needs, some key factors
need to be addressed: (1) the impact of inflation on fixed retirement incomes;
(2) the importance of starting to plan early for retirement; (3) the benefits of
tax deferral; and (4) the selection of an appropriate investment strategy. Each
of these factors is addressed below.
Unless otherwise noted, all of the following presentations use an assumed annual
rate of return of 7.5% compounded annually. This rate of return is for
illustrative purposes only and is not intended to represent an expected or
guaranteed rate of return for any investment vehicle. In addition, unless
otherwise noted, none of the illustrations reflect any charges that may be
applied under a particular investment vehicle. Such charges would effectively
reduce the actual return under any investment vehicle.
All earnings in these presentations are assumed to accumulate tax deferred
unless otherwise noted. Most programs designed for retirement savings offer tax
deferral. Amounts withdrawn generally are taxable and a 10% penalty tax may
apply to premature withdrawals. Certain retirement programs prohibit early
withdrawals. See "Tax information" in the prospectus. Where taxes are taken into
consideration in these presentations, a 28% tax rate is assumed.
5
<PAGE>
- --------------------------------------------------------------------------------
The source of the data used by us to compile the charts which appear in this
section (other than charts 1, 2, 3 and 4) is Ibbotson Associates, Inc., Chicago,
Stocks, Bonds, Bills and Inflation 1999 Yearbook(TM). All rights reserved.
In reports or other communications or in advertising material, we may make use
of these or other graphic or numerical illustrations that we prepare showing the
impact of inflation, planning early for retirements, tax deferral,
diversification and other concepts important to retirement planning.
INFLATION
Inflation erodes purchasing power. This means that, in an inflationary period,
the dollar is worth less as time passes. Because many people live on a fixed
income during retirement, inflation is of particular concern to them. The charts
on the next page illustrate the detrimental impact of inflation over an extended
period of time. Between 1968 and 1998, the average annual inflation rate was
5.24%. As demonstrated in Chart 1, this 5.24% average annual rate of inflation
would cause the purchasing power of $35,000 to decrease to only $7,562 after 30
years.
In Chart 2, the impact of inflation is examined from another perspective.
Specifically, the chart illustrates the additional income needed to maintain the
purchasing power of $35,000 over a thirty-year period. Again, the 1968-1998
historical inflation rate of 5.24% is used. In this case, an additional $126,992
would be required to maintain the purchasing power of $35,000 after 30 years.
CHART 1
[THE FOLLOWING DATA WAS REPRESENTED AS A
SHADED VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
(Income)
Today 35,000
10 Years 21,002
20 Years 12,602
30 Years 7,562
[END OF GRAPHICALLY REPRESENTED DATA]
CHART 2
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
Annual
Income Increase
Needed Needed
Today 35,000 -
10 Years 58,328 23,325
20 Years 97,204 62,204
30 Years 161,992 126,992
[END OF GRAPHICALLY REPRESENTED DATA]
STARTING EARLY
The impact of inflation accentuates the need to begin a retirement program
early. The value of starting early is illustrated in the following charts. As
shown in Chart 3, if an individual makes annual contributions of $2,500 to his
retirement program beginning at age 30, he would accumulate $414,551 by age 65
under the assumptions described earlier. If that individual waited until age 50,
he would only accumulate $70,193 by age 65 under the same assumptions.
CHART 3
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
AREA GRAPH IN THE PRINTED DOCUMENT:]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
[BLACK:] Age 50 $0 $0 $0 $0 $0 $15,610 $38,020 $70,193
[WHITE:] Age 40 $0 $0 $0 $15,610 $38,020 $70,193 $116,381 $182,691
[GRAY:] Age 30 $0 $15,610 $38,020 $70,193 $116,381 $182,691 $277,886 $414,551
</TABLE>
[END OF GRAPHICALLY REPRESENTED DATA]
In Table 1, the impact of starting early is demonstrated in another format. For
example, if an individual invests $300 monthly, he would accumulate $387,193 in
thirty years under our assumptions. In contrast, if that individual invested the
same $300
6
<PAGE>
- --------------------------------------------------------------------------------
per month for 15 years, he would accumulate only $97,804 under our
assumptions.
TABLE 1
- --------------------------------------------------------------------------------
MONTHLY
CONTRI- YEAR YEAR YEAR YEAR YEAR
BUTION 10 15 20 25 30
$ 20 $ 3,532 $ 6,520 $ 10,811 $ 16,970 $ 25,813
50 8,829 16,301 27,027 42,425 64,532
100 17,659 32,601 54,053 84,851 129,064
200 35,317 65,202 108,107 169,701 258,129
300 52,976 97,804 162,160 254,552 387,193
- --------------------------------------------------------------------------------
Chart 4 presents an additional way to demonstrate the significant impact of
starting to make contributions to a retirement program earlier rather than
later. It assumes that an individual had a goal to accumulate $250,000 (pre-tax)
by age 65. If he starts at age 30, under our assumptions he could reach the goal
by making a monthly pre-tax contribution of $130 (equivalent to $93 after
taxes). The total net cost for the 30-year-old in this hypothetical example
would be $39,265. If the individual in this hypothetical example waited until
age 50, he would have to make a monthly pre-tax contribution of $747 (equivalent
to $552 after taxes) to attain the goal, illustrating the importance of starting
early.
CHART 4
GOAL: $250,000 BY AGE 65
[THE FOLLOWING DATA WAS REPRESENTED AS A BLACK AND WHITE
VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
GOAL: $250,000 BY AGE 65
Tax Savings
and Tax-deferred
Net Cost Earnings at 7.5%
$93 per month Age 30 $ 39,265 $ 210,735
$212 per month Age 40 63,641 186,359
$552 per month Age 50 99,383 150,617
[END OF GRAPHICALLY REPRESENTED DATA]
TAX DEFERRAL
Contributing to a retirement plan early is part of an effective strategy for
addressing the impact of inflation. Another part of such a strategy is to
carefully select the types of retirement programs in which to invest. In
deciding where to invest retirement contributions, there are three basic types
of programs.
The first type offers the most tax benefits and, therefore, is potentially the
most beneficial for accumulating funds for retirement. Contributions are made
with pre-tax dollars or are tax deductible and earnings grow income tax
deferred. Examples of this type of program that permit individuals to make
contributions through personal savings or indirectly through employer-offered
salary deferrals are deductible Individual Retirement Annuities (IRAs);
Tax-Sheltered Annuities (TSAs).
The second type of program also provides for tax-deferred earnings growth;
however, contributions are made with after-tax dollars. Examples of this type of
program are non-deductible Traditional IRAs and non-qualified annuities.
The third approach to retirement savings is fully taxable. Contributions are
made with after-tax dollars and earnings are taxed each year. Examples of this
type of program include certificates of deposit, savings accounts and taxable
stock, bond or mutual fund investments.
Consider an example. For the type of retirement program that offers both pre-tax
contributions and tax deferral, assume that a $2,500 annual pre-tax contribution
is made for thirty years. In this example, the retirement funds would be
$199,607 after thirty years (assuming a 7.5% rate of return, no withdrawals and
assuming the deduction of a 1.75% Separate Account daily asset and Trust annual
expense charges and a $30 administrative charge -- but no contingent withdrawal
charge) and such funds would be $277,886 without the effect of any charges.
Assuming a lump sum withdrawal was made in year thirty and a 28% tax bracket,
these amounts would be $143,717 and $200,078, respectively.
For the type of program that offers only tax deferral, assume an after-tax
annual contribution of $1,800 for thirty years and the same rate of return. This
after-tax contribution is derived by taxing the $2,500 pre-tax contribution,
again assuming a 28% tax bracket. In this example, the retirement funds would be
$143,468 after thirty years assuming the deduction of charges and no
withdrawals, and $200,078 without the effect of charges. Assuming a lump sum
withdrawal in year thirty, the total after-tax amount would be $118,417 with
charges deducted and $159,176 without charges.
For the fully taxable investment, assume an after-tax contribution of $1,800 for
thirty years. Earnings are taxed annually. After thirty years, the amount of
7
<PAGE>
- --------------------------------------------------------------------------------
this fully taxable investment is $135,058. Keep in mind that taxable investments
have fees and charges, too (investment advisory fees, administrative charges,
12b-1 fees, sales loads, brokerage commissions, etc). We have not attempted to
apply these fees and charges to the fully taxable amounts since this is intended
merely as an example of tax deferral. Were such charges applied, the amounts in
the fully taxable example would be lower. Again, it must be emphasized that the
assumed rate of return of 7.5% compounded annually used in these examples is for
illustrative purposes only and is not intended to represent a guaranteed or
expected rate of return on any investment vehicle. Moreover, early withdrawals
of tax-deferred investments are generally subject to a 10% penalty tax.
INVESTMENT OPTIONS
Selecting an appropriate retirement program is clearly an important part of an
effective retirement planning strategy. Carefully choosing among investment
options is another essential component.
As demonstrated in Chart 5, during the 1968-1998 period, common stock average
annual returns outperformed the average annual returns of fixed investments,
such as long-term government bonds and Treasury Bills (T-bills). See "Notes" at
the end of this section. Common stocks earned an average annual return of 12.67%
over this period, in contrast to 9.09% and 6.76% for the other two investment
categories, respectively. Significantly, common stock returns also outpaced
inflation, which grew at 5.24% over this period.
CHART 5
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
Average Annual Returns
1968-1998
Inflation 5.24%
T-bills 6.76%
Long-Term Government Bonds 9.09%
Common Stock (S&P 500) 12.67%
[END OF GRAPHICALLY REPRESENTED DATA]
While Chart 5 illustrates that investments in common stocks outperformed
fixed-income investments for the 1968-1998 period, many people prefer to
diversify their investments by selecting a mix of fixed-income and growth
investments. In Chart 6, the growth of a $1,000 investment is shown given
various mixes of fixed-income and growth investments. See "Notes" at the end of
this section.
CHART 6
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
VERTICAL BAR GRAPH IN THE TYPESET DOCUMENT:]
Growth of $1,000
1968-1998
100% T-bills $7,113
70% Long-Term Government Bonds/30% Common Stock $19,579
50% Long-Term Government Bonds/50% Common Stock $24,118
100% Common Stock $35,814
[END OF GRAPHICALLY REPRESENTED DATA]
8
<PAGE>
- --------------------------------------------------------------------------------
NOTES
1. Common Stocks: Standard & Poor's (S&P) Composite Index is an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies. Results shown assume reinvestment of
dividends. Both market value and return on common stock will vary.
2. U.S. Government Securities: Long-term Government Bonds are measured using a
one-bond portfolio constructed each year containing a bond with
approximately a 20-year maturity and a reasonably current coupon. U.S.
Treasury Bills are measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month. U.S. Government securities are guaranteed
as to principal and interest and, if held to maturity, offer a fixed rate
of return.
However, market value and return on such securities will fluctuate prior to
maturity.
EQUI-VEST(R) can be effective for diversifying ongoing investments between
various asset categories. In addition, for individuals investing a lump sum,
special features are offered which help address the risk associated with timing
the equity markets. Specifically, an interest sweep function is offered whereby
an individual can initially contribute a lump sum in the guaranteed interest
option and then sweep the interest generated by the investment into any of the
growth-oriented options over a specified period of time. In addition, a
fixed-dollar transfer function is offered whereby an individual can contribute a
lump sum in the guaranteed interest option and then transfer a fixed-dollar
amount into the growth-oriented options over a specified period of time. Neither
of these features can guarantee a profit or assure against loss in a declining
market.
- --------------------------------------------------------------------------------
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return trends
for various types of securities. The information presented, while not directly
related to the performance of the investment options, helps to provide a
perspective on the potential returns of different asset classes over different
periods of time. By combining this information with your knowledge of your own
financial needs (e.g., the length of time until you retire, your financial
requirements at retirement), you may be able to better determine how you wish to
allocate plan contributions among the investment options available under your
plan.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long- or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus is
on long-term growth potential and protection against inflation, there may be
advantages to allocating some or all of their account value to those variable
investment options that invest in stocks.
Growth of $1 Invested on January 1, 1958
(Values are as of last business day)
[THE FOLLOWING DATA WAS REPRESENTED AS A
SHADED AREA GRAPH IN THE PRINTED DOCUMENT:]
Common Stock Inflation
1958 1.00 1.00
1959 1.12 1.01
1960 1.12 1.03
1961 1.43 1.04
1962 1.30 1.05
1963 1.60 1.07
1964 1.86 1.08
1965 2.10 1.10
1966 1.88 1.14
1967 2.34 1.17
1968 2.59 1.23
1969 2.37 1.30
1970 2.47 1.37
1971 2.82 1.42
1972 3.36 1.47
1973 2.87 1.60
1974 2.11 1.79
1975 2.89 1.92
1976 3.58 2.01
1977 3.32 2.15
1978 3.54 2.34
1979 4.19 2.65
1980 5.55 2.98
1981 5.28 3.25
1982 6.41 3.37
1983 7.86 3.50
1984 8.35 3.64
1985 11.03 3.78
1986 13.07 3.82
1987 13.75 3.99
1988 16.07 4.16
1989 21.13 4.36
1990 20.46 4.62
1991 26.74 4.76
1992 28.75 4.90
1993 31.63 5.04
1994 32.04 5.17
1995 44.03 5.30
1996 54.19 5.48
1997 72.27 5.57
1998 92.93 5.67
[LIGHT SHADED AREA = COMMON STOCK]
[DARK SHADED AREA = INFLATION]
[END OF GRAPHICALLY REPRESENTED DATA]
Over shorter periods of time, however, common stocks tend to be subject to more
dramatic changes in value than fixed-income (debt) securities. Investors who are
nearing retirement age, or who have a need to limit short-term risk, may find it
preferable to allocate a smaller percentage of their account value to those
variable investment options that invest in common stocks. The following graph
illustrates the monthly fluctuations in value of $1 based on monthly returns of
the Standard & Poor's 500 during 1990, a year that reflects the volatility
inherent in the investment of common stocks.
9
<PAGE>
- --------------------------------------------------------------------------------
Growth of $1 invested on January 1, 1990
(Values are as of last business day)
[THE FOLLOWING DATA WAS REPRESENTED AS A BLACK AND WHITE LINE GRAPH
IN THE PRINTED DOCUMENT:]
Intermediate-Term
Govt. Bonds Common Stocks
1/1/90 1.00 1.00
Jan. 0.99 0.93
Feb. 0.99 0.94
Mar. 0.99 0.97
Apr. 0.98 0.95
May 1.01 1.04
June 1.02 1.03
July 1.04 1.03
Aug. 1.03 0.93
Sep. 1.04 0.89
Oct. 1.06 0.89
Nov. 1.08 0.94
Dec. 1.10 0.97
[END OF GRAPHICALLY REPRESENTED DATA]
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1998 for different types
of securities: common stocks, long-term government bonds, long-term corporate
bonds, intermediate-term government bonds and U.S. Treasury Bills. For
comparison purposes, the Consumer Price Index is shown as a measure of
inflation. The average annual returns shown in the chart reflect capital
appreciation and assume the reinvestment of dividends and interest. No
investment management fees or expenses, and no charges typically associated with
deferred annuity products, are reflected. The information presented is merely a
summary of past experience for unmanaged groups of securities and is neither an
estimate nor guarantee of future performance. Any investment in securities,
whether equity or debt, involves varying degrees of potential risk, in addition
to offering varying degrees of potential reward.
The rates of return illustrated do not represent returns of Separate Account A.
In addition, there is no assurance that the performance of the investment
options will correspond to rates of return such as those illustrated in the
chart.
For a comparative illustration of performance results of the Options (which
reflect The Hudson River Trust and Separate Account A charges), see "Investment
performance" in the prospectus or the Trust prospectuses for The Hudson River
Trust and EQ Advisors Trust (which do not reflect Separate Account A charges).
10
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
- -------------------------------------------------------------------------------------------------------------------------------
LONG-TERM LONG-TERM INTERMEDIATE- U.S.
FOR THE FOLLOWING PERIODS COMMON GOVERNMENT CORPORATE TERM GOV'T. TREASURY CONSUMER
ENDING DECEMBER 31, 1998 STOCKS BONDS BONDS BONDS BILLS PRICE INDEX
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 28.58% 13.06% 10.76% 10.21% 4.86% 1.80%
3 Years 28.27 9.07 8.25 6.84 5.11 2.27
5 Years 24.06 9.52 8.74 6.20 4.96 2.41
10 Years 19.19 11.66 10.85 8.74 5.29 3.14
20 Years 17.75 11.14 10.86 9.85 7.17 4.53
30 Years 12.67 9.09 9.14 8.71 6.76 5.24
40 Years 12.00 7.20 7.43 7.39 5.94 4.44
50 Years 13.56 5.89 6.20 6.21 5.07 3.92
60 Years 12.49 5.43 5.62 5.50 4.26 4.19
Since 12/31/26 11.21 5.29 5.78 5.32 3.78 3.15
Inflation Adjusted Since 1926 7.82 2.08 2.55 2.11 0.62 --
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE: Ibbotson, Roger G., and Rex A. Sinquefield, Stocks, Bonds, Bills, and
Inflation (SBBI), 1982, updated in Stocks, Bonds, Bills and Inflation 1999
Yearbook(TM), Ibbotson Associates, Inc., Chicago. All rights reserved.
COMMON STOCKS (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
LONG-TERM GOVERNMENT BONDS -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
LONG-TERM CORPORATE BONDS -- For the period 1969-1998, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers Index was backdated using Salomon Brothers
monthly yield data and a methodology similar to that used by Salomon Brothers
for 1969-1998; for the period 1927-1945, the Standard and Poor's monthly
High-Grade Corporate Composite yield data were used, assuming a 4 percent coupon
and a twenty-year maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. TREASURY BILLS -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
INFLATION -- Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The consolidated financial statements of The Equitable included herein should be
considered only as bearing upon the ability of Equitable Life to meet its
obligations under the contracts.
11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
<S> <C>
Report of Independent Accountants.................................................................................. FSA-2
Financial Statements:
Statements of Assets and Liabilities, December 31, 1998...................................................... FSA-3
Statements of Operations for the Year Ended December 31, 1998................................................ FSA-6
Statements of Changes in Net Assets for the Years Ended December 31, 1998 and 1997........................... FSA-9
Notes to Financial Statements................................................................................ FSA-16
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants.................................................................................. F-1
Consolidated Financial Statements:
Consolidated Balance Sheets, December 31, 1998 and 1997...................................................... F-2
Consolidated Statements of Earnings, Years Ended December 31, 1998, 1997 and 1996............................ F-3
Consolidated Statements of Shareholder's Equity, Years Ended December 31, 1998,
1997 and 1996............................................................................................. F-4
Consolidated Statements of Cash Flows, Years Ended December 31, 1998, 1997 and 1996.......................... F-5
Notes to Consolidated Financial Statements................................................................... F-6
</TABLE>
FSA-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Contractowners of Separate Account A
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the Alliance Money Market Fund,
Alliance Intermediate Government Securities Fund, Alliance Quality Bond Fund,
Alliance High Yield Fund, Alliance Growth & Income Fund, Alliance Equity Index
Fund, Alliance Common Stock Fund, Alliance Global Fund, Alliance International
Fund, Alliance Aggressive Stock Fund, Alliance Small Cap Growth Fund, Alliance
Conservative Investors Fund, Alliance Growth Investors Fund, Alliance Balanced
Fund ("Hudson River Trust funds") and the T. Rowe Price Equity Income Fund,
EQ/Putnam Growth & Income Value Fund, Merrill Lynch Basic Value Equity Fund, MFS
Research Fund, T. Rowe Price International Stock Fund, Morgan Stanley Emerging
Markets Equity Fund, Warburg Pincus Small Company Value Fund, MFS Emerging
Growth Companies Fund, EQ/Putnam Balanced Fund, and Merrill Lynch World Strategy
Fund ("EQ Advisors Trust funds"), separate investment funds of The Equitable
Life Assurance Society of the United States ("Equitable Life") Separate Account
A at December 31, 1998 and the results of each of their operations and changes
in each of their net assets for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of Equitable Life's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of shares owned in The Hudson River Trust
and in The EQ Advisors Trust at December 31, 1998 with the transfer agent,
provide a reasonable basis for the opinion expressed above. The unit value
information presented in Note 6 for the year ended December 31, 1992 and for
each of the periods indicated prior thereto, were audited by other independent
accountants whose report dated February 16, 1993 expressed an unqualified
opinion on the financial statements containing such information.
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
FSA-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
--------------------------------------------------------------
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH
MARKET SECURITIES BOND YIELD
FUND FUND FUND FUND
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $126,393,531.................................... $126,082,971
52,884,907.................................... $53,855,750
81,574,491.................................... $81,903,603
234,155,055.................................... $198,398,150
132,387,446....................................
68,826,963....................................
507,038,678....................................
860,530,108....................................
Receivable for Trust shares sold............................ -- -- -- --
Due from Equitable Life's General Account
(Note 3)................................................. 443,930 94,544 181,937 255,904
------------ ------------ ------------ -------------
Total assets........................................ 126,526,901 53,950,294 82,085,540 198,654,054
------------ ------------ ------------ -------------
LIABILITIES:
Payable for Trust shares purchased......................... 440,784 96,954 173,181 263,793
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 179,001 351,346 445,982 206,805
------------ ------------ ------------ -------------
Total liabilities................................... 619,785 448,300 619,163 470,598
------------ ------------ ------------ -------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $125,907,116 $53,501,994 $81,466,377 $198,183,456
============ ============ ============ =============
<CAPTION>
EQUITY SERIES:
-------------------------------------------------------------------
EQ/
T.ROWE PRICE PUTNAM ALLIANCE ALLIANCE
EQUITY GROWTH & GROWTH & EQUITY
INCOME INCOME VALUE INCOME INDEX
FUND FUND FUND FUND
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $126,393,531....................................
52,884,907....................................
81,574,491....................................
234,155,055....................................
132,387,446.................................... $139,978,924
68,826,963.................................... $74,988,792
507,038,678.................................... $599,468,994
860,530,108................................... $1,153,005,368
Receivable for Trust shares sold............................ -- -- -- --
Due from Equitable Life's General Account
(Note 3)................................................. 1,106,116 672,410 1,904,968 11,149,643
------------ ----------- ------------ --------------
Total assets........................................ 141,085,040 75,661,202 601,373,962 1,164,155,011
------------ ----------- ------------ --------------
LIABILITIES:
Payable for Trust shares purchased......................... 1,106,116 672,410 1,608,787 11,151,657
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 163,834 162,192 742,644 715,187
------------ ----------- ------------ --------------
Total liabilities................................... 1,269,950 834,602 2,351,431 11,866,844
------------ ----------- ------------ --------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $139,815,090 $74,826,600 $599,022,531 $1,152,288,167
============ =========== ============ ==============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-------------------------------------------------------------------
MERRILL
LYNCH ALLIANCE
BASIC VALUE COMMON MFS ALLIANCE
EQUITY STOCK RESEARCH GLOBAL
FUND FUND FUND FUND
------------ -------------- -------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 56,223,556............................. $57,472,290
5,604,901,871............................. $7,729,532,779
88,527,561............................. $102,398,515
609,414,934............................. $727,190,716
127,648,223.............................
66,625,462.............................
17,147,883.............................
3,378,240,751.............................
Receivable for Trust shares sold........................... -- -- -- 568,149
Due from Equitable Life's General Account
(Note 3)................................................. 556,978 5,851,659 4,489,476 --
----------- -------------- ------------ -------------
Total assets........................................ 58,029,268 7,735,384,438 106,887,991 727,758,865
----------- -------------- ------------ -------------
LIABILITIES:
Payable for Trust shares purchased.......................... 556,953 5,468,912 4,489,434 --
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- 600,419
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 119,600 4,142,124 148,866 358,278
----------- -------------- ------------ -------------
Total liabilities................................... 676,553 9,611,036 4,638,300 958,697
----------- -------------- ------------ -------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $57,352,715 $7,725,773,402 $102,249,691 $726,800,168
=========== ============== ============ =============
<CAPTION>
EQUITY SERIES (CONTINUED):
------------------------------------------------------------------
T.ROWE MORGAN
PRICE STANLEY
INTER- EMERGING ALLIANCE
ALLIANCE NATIONAL MARKETS AGGRESSIVE
INTERNATIONAL STOCK EQUITY STOCK
FUND FUND FUND FUND
------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 56,223,556.............................
5,604,901,871.............................
88,527,561.............................
609,414,934.............................
127,648,223............................. $130,220,038
66,625,462............................. $73,881,887
17,147,883............................. $16,084,234
3,378,240,751............................. $3,168,974,945
Receivable for Trust shares sold........................... 211,881 -- -- 6,354,007
Due from Equitable Life's General Account
(Note 3)................................................. -- 179,720 115,594 --
------------ ----------- ----------- --------------
Total assets........................................ 130,431,919 74,061,607 16,199,828 3,175,328,952
------------ ----------- ----------- --------------
LIABILITIES:
Payable for Trust shares purchased.......................... -- 179,720 115,594 --
Due to Equitable Life's General Account
(Note 3)................................................. 216,890 -- -- 6,160,056
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 193,242 90,602 3,574,314 670,310
------------ ----------- ----------- --------------
Total liabilities................................... 410,132 270,322 3,689,908 6,830,366
------------ ----------- ----------- --------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $130,021,787 $73,791,285 $12,509,920 $3,168,498,586
============ =========== =========== ==============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSET
ALLOCATION
EQUITY SERIES (CONCLUDED): SERIES
----------------------------------------------- ---------------
MFS
WARBURG PINCUS ALLIANCE EMERGING ALLIANCE
SMALL COMPANY SMALL CAP GROWTH CONSERVATIVE
VALUE GROWTH COMPANIES INVESTORS
FUND FUND FUND FUND
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 97,621,394............................ $90,331,538
128,288,230............................ $139,300,122
141,554,053............................ $177,252,578
111,402,771............................ $120,069,941
32,776,608............................
739,431,816............................
1,207,545,862............................
10,547,792............................
Receivable for Trust shares sold........................... -- 1,068,050 -- --
Due from Equitable Life's General Account
(Note 3)................................................. 680,223 -- 2,139,886 181,219
----------- ------------ ------------ ------------
Total assets........................................ 91,011,761 140,368,172 179,392,464 120,251,160
----------- ------------ ------------ ------------
LIABILITIES:
Payable for Trust shares purchased......................... 680,223 -- 2,139,886 182,458
Due to Equitable Life's General Account
(Note 3)................................................. -- 1,051,042 -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 128,730 410,448 49,828 205,350
----------- ------------ ------------ ------------
Total liabilities................................... 808,953 1,461,490 2,189,714 387,808
----------- ------------ ------------ ------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $90,202,808 $138,906,682 $177,202,750 $119,863,352
<CAPTION>
ASSET ALLOCATION SERIES (CONTINUED):
---------------------------------------------------------------
MERRILL
EQ/ ALLIANCE LYNCH
PUTNAM GROWTH ALLIANCE WORLD
BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND
----------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 97,621,394............................
128,288,230............................
141,554,053............................
111,402,771............................
32,776,608............................ $34,787,837
739,431,816............................ $842,909,418
1,207,545,862............................ $1,322,780,470
10,547,792............................ $11,042,248
Receivable for Trust shares sold........................... -- -- 869,867 --
Due from Equitable Life's General Account
(Note 3)................................................. 344,836 1,901,167 -- 83,668
----------- ------------ -------------- -----------
Total assets........................................ 35,132,673 844,810,585 1,323,650,337 11,125,916
----------- ------------ -------------- -----------
LIABILITIES:
Payable for Trust shares purchased......................... 344,836 1,905,292 -- 83,668
Due to Equitable Life's General Account
(Note 3)................................................. -- -- 728,517 --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 147,171 687,262 186,147 1,772,681
----------- ------------ -------------- -----------
Total liabilities................................... 492,007 2,592,554 914,664 1,856,349
----------- ------------ -------------- -----------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $34,640,666 $842,218,031 $1,322,735,673 $ 9,269,567
=========== ============ ============== ===========
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
-----------------------------------------------------------------
ALLIANCE
INTER-
ALLIANCE MEDIATE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH
MARKET SECURITIES BOND YIELD
FUND FUND FUND FUND
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $5,255,399 $2,342,433 $3,395,859 $ 20,512,530
---------- ---------- ---------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,481,147 587,870 794,815 2,600,402
Less: Reduction for expense limitation...................... 48,970 7,750 -- --
---------- ---------- ---------- ------------
Net expenses.......................................... 1,432,177 580,120 794,815 2,600,402
---------- ---------- ---------- ------------
NET INVESTMENT INCOME (LOSS)................................ 3,823,222 1,762,313 2,601,044 17,912,128
---------- ---------- ---------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... 234,429 470,342 372,734 4,677
Realized gain distribution from
The Trusts.......................................... 3,630 -- 1,620,732 3,909,878
---------- ---------- ---------- ------------
Net realized gain (loss)................................. 238,059 470,342 1,993,466 3,914,555
Change in unrealized appreciation
(depreciation) of investments......................... 121,024 512,287 (486,113) (36,813,923)
---------- ---------- ---------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 359,083 982,629 1,507,353 (32,899,368)
========== ========== ========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $4,182,305 $2,744,942 $4,108,397 $(14,987,240)
========== ========== ========== ============
<CAPTION>
EQUITY SERIES:
---------------------------------------------------------------
EQ/
T. ROWE PUTNAM
PRICE GROWTH & ALLIANCE ALLIANCE
EQUITY INCOME GROWTH & EQUITY
INCOME VALUE INCOME INDEX
FUND FUND FUND FUND
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $2,277,162 $ 643,088 $ 1,653,807 $ 10,632,473
---------- ---------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,304,543 670,969 6,396,117 11,997,835
Less: Reduction for expense limitation...................... -- -- -- --
---------- ---------- ----------- ------------
Net expenses.......................................... 1,304,543 670,969 6,396,117 11,997,835
---------- ---------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 972,619 (27,881) (4,742,310) (1,365,362)
---------- ---------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (974,087) (339,484) 3,660,147 40,077,379
Realized gain distribution from
The Trusts.......................................... 2,932,028 580,684 48,006,831 339,719
---------- ---------- ----------- ------------
Net realized gain (loss)................................. 1,957,941 241,200 51,666,978 40,417,098
Change in unrealized appreciation
(depreciation) of investments......................... 4,171,888 5,418,025 39,346,894 170,263,193
---------- ---------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 6,129,829 5,659,225 91,013,872 210,680,291
---------- ---------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $7,102,448 $5,631,344 $86,271,562 $209,314,929
========== ========== =========== ============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-6
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
MERRILL
LYNCH
BASIC ALLIANCE
VALUE COMMON MFS ALLIANCE
EQUITY STOCK RESEARCH GLOBAL
FUND FUND FUND FUND
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 550,754 $ 42,754,627 $ 249,000 $ 7,924,674
----------- -------------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 494,290 95,988,818 735,308 8,877,655
Less: Reduction for expense limitation...................... -- 6,717,477 -- --
----------- -------------- ----------- ------------
Net expenses.......................................... 494,290 89,271,341 735,308 8,877,655
----------- -------------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 56,464 (46,516,714) (486,308) (952,981)
----------- -------------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (1,204,767) 190,070,720 (916,443) 13,674,946
Realized gain distribution from
The Trusts.......................................... 1,908,414 932,028,578 -- 46,107,203
----------- -------------- ----------- ------------
Net realized gain (loss)................................. 703,647 1,122,099,298 (916,443) 59,782,149
Change in unrealized appreciation
(depreciation) of investments......................... 1,021,838 573,857,850 13,393,079 60,932,110
----------- -------------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 1,725,485 1,695,957,148 12,476,636 120,714,259
=========== ============== =========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $ 1,781,949 $1,649,440,434 $11,990,328 $119,761,278
=========== ============== =========== ============
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------
MORGAN
T. ROWE STANLEY
ALLIANCE PRICE INTER- EMERGING ALLIANCE
INTER- NATIONAL- MARKETS AGGRESSIVE
NATIONAL STOCK EQUITY STOCK
FUND FUND FUND FUND
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 2,332,648 $ 628,616 $ 61,144 $ 14,559,406
----------- ----------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,702,585 717,829 139,058 43,880,560
Less: Reduction for expense limitation...................... -- -- -- 3,621,990
----------- ----------- ----------- ------------
Net expenses.......................................... 1,702,585 717,829 139,058 40,258,570
----------- ----------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 630,063 (89,213) (77,914) (25,699,164)
----------- ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (6,316,417) (2,187,587) (4,762,302) 76,319,984
Realized gain distribution from
The Trusts.......................................... 24,639 677 -- 153,501,697
----------- ----------- ----------- ------------
Net realized gain (loss)................................. (6,291,778) (2,186,910) (4,762,302) 229,821,681
Change in unrealized appreciation
(depreciation) of investments......................... 17,134,710 8,173,937 34,335 (233,439,908)
----------- ----------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 10,842,932 5,987,027 (4,727,967) (3,618,227)
=========== =========== =========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $11,472,995 $ 5,897,814 $(4,805,881) $ (29,317,391)
=========== =========== =========== =============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-7
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED):
----------------------------------------------------------------
MFS
WARBURG PINCUS ALLIANCE EMERGING ALLIANCE
SMALL COMPANY SMALL CAP GROWTH CONSERVATIVE
VALUE GROWTH COMPANIES INVESTORS
FUND FUND FUND FUND
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 420,391 $ 11,795 $ 2,970 $ 4,213,562
------------ ------------ ----------- -----------
Expenses (Note 3):
Asset-based charges................................... 1,049,204 1,437,474 1,125,210 1,406,739
Less: Reduction for expense limitation...................... -- -- -- --
------------ ------------ ----------- -----------
Net expenses.......................................... 1,049,204 1,437,474 1,125,210 1,406,739
------------ ------------ ----------- -----------
NET INVESTMENT INCOME (LOSS)................................ (628,813) (1,425,679) (1,122,240) 2,806,823
------------ ------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (3,319,964) (18,408,722) (4,911,369) 1,336,530
Realized gain distribution from
The Trusts.......................................... -- -- -- 6,357,062
------------ ------------ ----------- -----------
Net realized gain (loss)................................. (3,319,964) (18,408,722) (4,911,369) 7,693,592
Change in unrealized appreciation
(depreciation) of investments......................... (7,312,118) 12,576,541 35,293,322 2,040,567
------------ ------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... (10,632,082) (5,832,181) 30,381,953 9,734,159
============ ============ =========== ===========
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $(11,260,895) $ (7,257,860) $29,259,713 $12,540,982
============ ============ =========== ===========
<CAPTION>
ASSET ALLOCATION SERIES:
-------------------------------------------------------------
MERRILL
EQ/ ALLIANCE LYNCH
PUTNAM GROWTH ALLIANCE WORLD
BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND
----------- ------------ -------------- ----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 634,198 $ 15,542,047 $ 33,629,387 $ 83,000
---------- ------------ ------------ ---------
Expenses (Note 3):
Asset-based charges................................... 287,370 10,042,667 18,391,448 94,329
Less: Reduction for expense limitation...................... -- -- 2,004,680 --
---------- ------------ ------------ ---------
Net expenses.......................................... 287,370 10,042,667 16,386,768 94,329
---------- ------------ ------------ ---------
NET INVESTMENT INCOME (LOSS)................................ 346,828 5,499,380 17,242,619 (11,329)
---------- ------------ ------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... 307,112 8,822,060 23,244,711 (103,174)
Realized gain distribution from
The Trusts.......................................... 395,016 67,065,259 110,287,707 --
---------- ------------ ------------ ---------
Net realized gain (loss)................................. 702,128 75,887,319 133,532,418 (103,174)
Change in unrealized appreciation
(depreciation) of investments......................... 1,408,394 40,944,576 42,665,225 648,068
---------- ------------ ------------ ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 2,110,522 116,831,895 176,197,643 544,894
---------- ------------ ------------ ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $2,457,350 $122,331,275 $193,440,262 $ 533,565
========== ============ ============ =========
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-8
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
-----------------------------------------------------------------
ALLIANCE
MONEY MARKET ALLIANCE INTERMEDIATE
FUND GOVERNMENT SECURITIES FUND
------------------------------ -----------------------------
1998 1997 1998 1997
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 3,823,222 $ 3,606,969 $ 1,762,313 $ 1,421,306
Net realized gain (loss) on investments.................. 238,059 236,951 470,342 63,438
Change in unrealized appreciation
(depreciation) of investments......................... 121,024 (78,466) 512,287 431,540
------------ ------------ ----------- -----------
Net increase in net assets from operations............... 4,182,305 3,765,454 2,744,942 1,916,284
------------ ------------ ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 59,238,443 86,657,302 10,106,543 7,536,973
Transfers from other Funds and
Guaranteed Interest Account......................... 99,124,881 47,922,157 23,196,411 8,017,226
------------ ------------ ----------- -----------
Total............................................ 158,363,324 134,579,459 33,302,954 15,554,199
------------ ------------ ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 25,401,484 16,145,603 5,018,282 3,204,151
Transfers to other Funds and
Guaranteed Interest Account......................... 108,901,266 117,776,744 14,425,062 6,576,233
Withdrawal and administrative charges................. 307,072 297,412 75,927 54,007
------------ ------------ ----------- -----------
Total............................................ 134,609,822 134,219,759 19,519,271 9,834,391
------------ ------------ ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 23,753,502 359,700 13,783,683 5,719,808
------------ ------------ ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 99,791 (68,437) (40,620) (50,296)
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 28,035,598 4,056,717 16,488,005 7,585,796
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 97,871,518 93,814,801 37,013,989 29,428,193
------------ ------------ ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $125,907,116 $ 97,871,518 $53,501,994 $37,013,989
============ ============ =========== ===========
<CAPTION>
FIXED INCOME SERIES:
----------------------------------------------------------------
ALLIANCE ALLIANCE
QUALITY BOND HIGH YIELD
FUND FUND
---------------------------- -----------------------------
1998 1997 1998 1997
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 2,601,044 $ 1,622,820 $ 17,912,128 $ 10,021,713
Net realized gain (loss) on investments.................. 1,993,466 249,479 3,914,555 8,751,281
Change in unrealized appreciation
(depreciation) of investments......................... (486,113) 547,099 (36,813,923) (187,263)
----------- ----------- ------------ ------------
Net increase in net assets from operations............... 4,108,397 2,419,398 (14,987,240) 18,585,731
----------- ----------- ------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 20,999,014 8,725,632 52,878,815 39,249,294
Transfers from other Funds and
Guaranteed Interest Account......................... 46,264,543 14,735,972 114,552,746 81,831,743
----------- ----------- ------------ ------------
Total............................................ 67,263,557 23,461,604 167,431,561 121,081,037
----------- ----------- ------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 4,294,846 2,471,399 15,414,754 9,034,492
Transfers to other Funds and
Guaranteed Interest Account......................... 26,129,927 9,009,004 96,757,242 50,004,724
Withdrawal and administrative charges................. 64,190 49,238 269,447 180,111
----------- ----------- ------------ ------------
Total............................................ 30,488,963 11,529,641 112,441,443 59,219,327
----------- ----------- ------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 36,774,594 11,931,963 54,990,118 61,861,710
----------- ----------- ------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (65,774) (51,466) (32,954) (195,148)
----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,817,217 14,299,895 39,969,924 80,252,293
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,649,160 26,349,265 158,213,532 77,961,239
----------- ----------- ------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $81,466,377 $40,649,160 $198,183,456 $158,213,532
=========== =========== ============ ============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-9
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES:
--------------------------------------------------------------
T. ROWE PRICE EQ/PUTNAM
EQUITY INCOME GROWTH & INCOME VALUE
FUND(a) FUND(a)
----------------------------- ----------------------------
1998 1997 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 972,619 $ 213,607 $ (27,881) $ 27,593
Net realized gain (loss) on investments.................. 1,957,941 84,219 241,200 48,562
Change in unrealized appreciation
(depreciation) of investments......................... 4,171,888 3,419,591 5,418,025 743,804
------------ ----------- ----------- -----------
Net increase in net assets from operations............... 7,102,448 3,717,417 5,631,344 819,959
------------ ----------- ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 34,984,402 14,253,368 21,041,270 9,287,300
Transfers from other Funds and
Guaranteed Interest Account......................... 70,500,028 49,127,513 31,492,288 21,624,425
------------ ----------- ----------- -----------
Total............................................ 105,484,430 63,380,881 52,533,558 30,911,725
------------ ----------- ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 4,063,205 461,902 2,208,567 221,732
Transfers to other Funds and
Guaranteed Interest Account......................... 26,010,302 8,775,894 9,702,715 2,466,969
Withdrawal and administrative charges................. 88,752 7,224 53,830 5,138
------------ ----------- ----------- -----------
Total............................................ 30,162,259 9,245,020 11,965,112 2,693,839
------------ ----------- ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 75,322,171 54,135,861 40,568,446 28,217,886
------------ ----------- ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (94,421) (368,386) (127,918) (283,117)
------------ ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 82,330,198 57,484,892 46,071,872 28,754,728
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 57,484,892 -- 28,754,728 --
------------ ----------- ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $139,815,090 $57,484,892 $74,826,600 $28,754,728
============ =========== =========== ===========
<CAPTION>
EQUITY SERIES:
--------------------------------------------------------------
ALLIANCE ALLIANCE
GROWTH & INCOME EQUITY INDEX
FUND FUND
------------------------------- ----------------------------
1998 1997 1998 1997
------------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (4,742,310) $ (881,670) $ (1,365,362) $ 785,831
Net realized gain (loss) on investments.................. 51,666,978 22,637,435 40,417,098 15,251,160
Change in unrealized appreciation
(depreciation) of investments......................... 39,346,894 34,617,976 170,263,193 98,430,290
------------- ------------ -------------- -----------
Net increase in net assets from operations............... 86,271,562 56,373,741 209,314,929 114,467,281
------------- ------------ -------------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 101,906,524 77,902,559 169,623,980 123,805,230
Transfers from other Funds and
Guaranteed Interest Account......................... 162,800,542 159,040,741 637,861,607 497,060,564
------------- ------------ -------------- -----------
Total............................................ 264,707,066 236,943,300 807,485,587 620,865,794
------------- ------------ -------------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 30,427,264 15,991,738 55,265,209 26,845,795
Transfers to other Funds and
Guaranteed Interest Account......................... 89,917,684 70,222,768 455,238,354 332,805,482
Withdrawal and administrative charges................. 678,233 387,138 1,207,740 650,256
------------- ------------ -------------- -----------
Total............................................ 121,023,181 86,601,644 511,711,303 360,301,533
------------- ------------ -------------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 143,683,885 150,341,656 295,774,284 260,564,261
------------- ------------ -------------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (817,183) (337,427) (1,687,941) (491,351)
------------- ------------ -------------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 229,138,264 206,377,970 503,401,272 374,540,191
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 369,884,267 163,506,297 648,886,895 274,346,704
------------- ------------ -------------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $599,022,531 $369,884,267 $1,152,288,167 $648,886,895
============= ============ ============== ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-10
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
--------------------------------------------------------------------
ALLIANCE
MERRILL LYNCH BASIC VALUE COMMON STOCK
EQUITY FUND(a) FUND
------------------------------ -------------------------------------
1998 1997 1998 1997
----------- ----------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 56,464 $ 28,039 $ (46,516,714) $ (40,194,434)
Net realized gain (loss) on investments.................. 703,647 32,936 1,122,099,298 520,414,631
Change in unrealized appreciation
(depreciation) of investments......................... 1,021,838 226,896 573,857,850 776,898,715
----------- ----------- -------------- --------------
Net increase in net assets from
operations............................................ 1,781,949 287,871 1,649,440,434 1,257,118,912
----------- ----------- -------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 18,099,811 5,085,307 526,598,693 485,617,488
Transfers from other Funds and
Guaranteed Interest Account......................... 54,374,032 15,531,026 1,219,987,398 981,404,674
----------- ----------- -------------- --------------
Total............................................ 72,473,843 20,616,333 1,746,586,091 1,467,022,162
----------- ----------- -------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 1,998,824 146,225 439,741,977 326,957,672
Transfers to other Funds and
Guaranteed Interest Account......................... 31,529,622 3,680,513 1,134,646,060 793,882,977
Withdrawal and administrative
charges............................................. 37,806 3,018 7,821,832 6,730,878
----------- ----------- -------------- --------------
Total............................................ 33,566,252 3,829,756 1,582,209,869 1,127,571,527
----------- ----------- -------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 38,907,591 16,786,577 164,376,222 339,450,635
----------- ----------- -------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (112,369) (298,904) (12,019,228) (5,291,673)
----------- ----------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,577,171 16,775,544 1,801,797,428 1,591,277,874
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 16,775,544 -- 5,923,975,974 4,332,698,100
----------- ----------- -------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $57,352,715 $16,775,544 $7,725,773,402 $5,923,975,974
=========== =========== ============== ==============
<CAPTION>
EQUITY SERIES (CONTINUED):
------------------------------------------------------------------
MFS RESEARCH ALLIANCE GLOBAL
FUND(a) FUND
------------------------------- ---------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (486,308) $ (44,322) $ (952,981) $ 4,053,343
Net realized gain (loss) on investments.................. (916,443) 156,450 59,782,149 44,106,582
Change in unrealized appreciation
(depreciation) of investments......................... 13,393,079 477,876 60,932,110 7,345,361
------------ ------------ ------------ ------------
Net increase in net assets from
operations............................................ 11,990,328 590,004 119,761,278 55,505,286
------------ ------------ ------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 26,220,920 9,395,788 73,052,084 89,835,392
Transfers from other Funds and
Guaranteed Interest Account......................... 79,372,885 21,884,490 97,000,214 100,167,043
------------ ------------ ------------ ------------
Total............................................ 105,593,805 31,280,278 170,052,298 190,002,435
------------ ------------ ------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 2,234,932 315,298 45,379,156 38,003,491
Transfers to other Funds and
Guaranteed Interest Account......................... 39,937,639 3,913,603 124,416,716 93,151,966
Withdrawal and administrative
charges............................................. 56,352 4,474 1,061,880 1,013,918
------------ ------------ ------------ ------------
Total............................................ 42,228,923 4,233,375 170,857,752 132,169,375
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 63,364,882 27,046,903 (805,454) 57,833,060
------------ ------------ ------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (280,049) (462,377) (667,287) (280,980)
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 75,075,161 27,174,530 118,288,537 113,057,366
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 27,174,530 -- 608,511,631 495,454,265
------------ ------------ ------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $102,249,691 $27,174,530 $726,800,168 $608,511,631
============ =========== ============ ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
ALLIANCE T. ROWE PRICE
INTERNATIONAL INTERNATIONAL STOCK
FUND FUND(a)
------------------------------ -----------------------------
1998 1997 1998 1997
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 630,063 $ 1,841,231 $ (89,213) $ (167,342)
Net realized gain (loss) on investments.................. (6,291,778) 8,984,846 (2,186,910) (1,454,589)
Change in unrealized appreciation
(depreciation) of investments......................... 17,134,710 (15,797,804) 8,173,937 (917,513)
------------ ------------ ----------- -----------
Net increase in net assets from
operations............................................ 11,472,995 (4,971,727) 5,897,814 (2,539,444)
------------ ------------ ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 18,021,919 27,672,360 17,268,615 11,943,016
Transfers from other Funds and
Guaranteed Interest Account......................... 252,313,930 151,532,780 79,807,973 48,742,022
------------ ------------ ----------- -----------
Total............................................ 270,335,849 179,205,140 97,076,588 60,685,038
------------ ------------ ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 9,618,434 9,154,376 2,262,558 551,644
Transfers to other Funds and
Guaranteed Interest Account......................... 259,822,531 143,958,994 64,643,746 19,727,736
Withdrawal and administrative
charges............................................. 226,908 226,612 65,025 12,207
------------ ------------ ----------- -----------
Total............................................ 269,667,873 153,339,982 66,971,329 20,291,587
------------ ------------ ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 667,976 25,865,158 30,105,259 40,393,451
------------ ------------ ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (208,473) 8,298 (140,255) 74,460
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 11,932,498 20,901,729 35,862,818 37,928,467
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 118,089,289 97,187,560 37,928,467 --
------------ ------------ ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $130,021,787 $118,089,289 $73,791,285 $37,928,467
============ ============ =========== ===========
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
MORGAN STANLEY ALLIANCE
EMERGING MARKETS EQUITY AGGRESSIVE STOCK
FUND(b) FUND
---------------------------- ---------------------------------
1998 1997 1998 1997
----------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (77,914) $ 15,148 $ (25,699,164) $ (36,023,732)
Net realized gain (loss) on investments.................. (4,762,302) (875,317) 229,821,681 414,890,550
Change in unrealized appreciation
(depreciation) of investments......................... 34,335 (1,097,984) (233,439,908) (79,262,405)
----------- ------------ --------------- --------------
Net increase in net assets from
operations............................................ (4,805,881) (1,958,153) (29,317,391) 299,604,413
----------- ------------ -------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 4,268,805 2,087,150 292,963,500 378,453,001
Transfers from other Funds and
Guaranteed Interest Account......................... 58,497,186 17,543,713 837,060,745 1,226,614,217
----------- ------------ -------------- --------------
Total............................................ 62,765,991 19,630,863 1,130,024,245 1,605,067,218
----------- ------------ -------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 371,931 38,081 246,890,973 223,777,455
Transfers to other Funds and
Guaranteed Interest Account......................... 55,007,653 10,197,807 1,105,075,546 1,226,219,275
Withdrawal and administrative
charges............................................. 12,342 1,449 5,526,894 5,581,896
----------- ------------ -------------- --------------
Total............................................ 55,391,926 10,237,337 1,357,493,413 1,455,578,626
----------- ------------ -------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 7,374,065 9,393,526 (227,469,168) 149,488,592
----------- ------------ -------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 1,295,969 1,210,394 63,901 (445,491)
----------- ------------ -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 3,864,153 8,645,767 (256,722,658) 448,647,514
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 8,645,767 -- 3,425,221,244 2,976,573,730
----------- ------------ -------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $12,509,920 $ 8,645,767 $3,168,498,586 $3,425,221,244
============ ============ ============== ===============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
(b) Commenced operations on August 20, 1997.
See Notes to Financial Statements.
FSA-12
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED):
-----------------------------------------------------------------
WARBURG PINCUS ALLIANCE
SMALL COMPANY VALUE SMALL CAP GROWTH
FUND(a) FUND(a)
------------------------------- -------------------------------
1998 1997 1998 1997
------------ ----------- ------------- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (628,813) $ (233,472) $ (1,425,679) $ (226,153)
Net realized gain (loss) on investments.................. (3,319,964) (398,282) (18,408,722) 2,928,197
Change in unrealized appreciation
(depreciation) of investments......................... (7,312,118) 22,263 12,576,541 (1,564,649)
------------ ------------ ------------- ------------
Net increase in net assets from operations............... (11,260,895) (609,491) (7,257,860) 1,137,395
------------ ------------ ------------- ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 25,746,572 17,932,084 43,309,112 15,686,202
Transfers from other Funds and
Guaranteed Interest Account......................... 45,701,935 95,994,086 363,094,583 134,506,874
------------ ------------ ------------- ------------
Total............................................ 71,448,507 113,926,170 406,403,695 150,193,076
------------ ------------ ------------- ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 3,085,017 710,649 3,905,019 644,310
Transfers to other Funds and
Guaranteed Interest Account......................... 34,873,684 44,374,048 319,261,827 87,128,302
Withdrawal and administrative charges................. 105,234 13,343 112,019 7,383
------------ ------------ ------------- ------------
Total............................................ 38,063,935 45,098,040 323,278,865 87,779,995
------------ ------------ ------------- ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 33,384,572 68,828,130 83,124,830 62,413,081
------------ ------------ ------------- ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 13,573 (153,081) (23,520) (487,244)
------------ ------------ ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 22,137,250 68,065,558 75,843,450 63,063,232
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 68,065,558 -- 63,063,232 --
------------ ------------ ------------- ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $ 90,202,808 $ 68,065,558 $138,906,682 $ 63,063,232
============ ============ ============ ============
<CAPTION>
EQUITY SERIES (CONCLUDED):
---------------------------------
MFS EMERGING
GROWTH COMPANIES
FUND(a)
---------------------------------
1998 1997
------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (1,122,240) $ (59,318)
Net realized gain (loss) on investments.................. (4,911,369) 410,582
Change in unrealized appreciation
(depreciation) of investments......................... 35,293,322 405,203
------------- -----------
Net increase in net assets from operations............... 29,259,713 756,467
------------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 45,965,336 10,348,726
Transfers from other Funds and
Guaranteed Interest Account......................... 245,232,174 41,158,325
------------- -----------
Total............................................ 291,197,510 51,507,051
------------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 3,422,691 272,079
Transfers to other Funds and
Guaranteed Interest Account......................... 170,609,391 20,257,025
Withdrawal and administrative charges................. 94,296 3,323
------------- -----------
Total............................................ 174,126,378 20,532,427
------------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 117,071,132 30,974,624
------------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (199,446) (659,740)
------------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 146,131,399 31,071,351
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 31,071,351 --
------------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $177,202,750 $31,071,351
============ ===========
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-13
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES:
-------------------------------------------------------------
ALLIANCE EQ/PUTNAM
CONSERVATIVE INVESTORS BALANCED
FUND FUND(a)
--------------------------- -----------------------------
1998 1997 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 2,806,823 $ 2,448,726 $ 346,828 $ 129,710
Net realized gain (loss) on investments.................. 7,693,592 3,730,623 702,128 115,430
Change in unrealized appreciation
(depreciation) of investments......................... 2,040,567 3,477,016 1,408,394 602,835
------------ ----------- ----------- -----------
Net increase in net assets from operations............... 12,540,982 9,656,365 2,457,350 847,975
------------ ----------- ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 19,140,568 11,365,584 10,044,027 3,699,337
Transfers from other Funds and
Guaranteed Interest Account......................... 16,914,697 8,530,415 24,576,797 15,752,330
------------ ----------- ----------- -----------
Total............................................ 36,055,265 19,895,999 34,620,824 19,451,667
------------ ----------- ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 8,188,450 7,295,059 975,331 192,650
Transfers to other Funds and
Guaranteed Interest Account......................... 12,810,163 14,511,104 13,658,260 7,250,221
Withdrawal and administrative charges................. 167,275 162,391 20,744 1,654
------------ ----------- ----------- -----------
Total............................................ 21,165,888 21,968,554 14,654,335 7,444,525
------------ ----------- ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 14,889,377 (2,072,555) 19,966,489 12,007,142
------------ ----------- ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (230,218) (172,151) (204,197) (434,093)
------------ ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 27,200,141 7,411,659 22,219,642 12,421,024
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 92,663,211 85,251,552 12,421,024 --
------------ ----------- ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $119,863,352 $92,663,211 $34,640,666 $12,421,024
============ =========== =========== ===========
<CAPTION>
ASSET ALLOCATION SERIES:
----------------------------------
ALLIANCE
GROWTH INVESTORS
FUND
----------------------------------
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 5,499,380 $ 7,374,359
Net realized gain (loss) on investments.................. 75,887,319 38,624,261
Change in unrealized appreciation
(depreciation) of investments......................... 40,944,576 40,925,116
------------ ------------
Net increase in net assets from operations............... 122,331,275 86,923,736
------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 90,895,614 96,835,654
Transfers from other Funds and
Guaranteed Interest Account......................... 81,033,459 86,565,969
------------ ------------
Total............................................ 171,929,073 183,401,623
------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 50,079,041 39,593,409
Transfers to other Funds and
Guaranteed Interest Account......................... 81,495,051 76,718,000
Withdrawal and administrative charges................. 1,338,300 1,162,210
------------ ------------
Total............................................ 132,912,392 117,473,619
------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 39,016,681 65,928,004
------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (840,403) (551,891)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 160,507,553 152,299,849
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 681,710,478 529,410,629
------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $842,218,031 $681,710,478
============ ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-14
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES (CONCLUDED):
--------------------------------------
ALLIANCE
BALANCED
FUND
--------------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)...................................... $ 17,242,619 $ 23,301,713
Net realized gain (loss) on investments........................... 133,532,418 79,099,392
Change in unrealized appreciation
(depreciation) of investments.................................. 42,665,225 45,961,244
-------------- --------------
Net increase in net assets from operations........................ 193,440,262 148,362,349
-------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions.................................................. 76,987,846 84,629,925
Transfers from other Funds and
Guaranteed Interest Account.................................. 168,586,346 112,630,041
-------------- --------------
Total..................................................... 245,574,192 197,259,966
-------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits........................................... 107,639,830 96,288,584
Transfers to other Funds and
Guaranteed Interest Account.................................. 202,971,507 170,604,239
Withdrawal and administrative charges.......................... 1,699,980 1,889,094
-------------- --------------
Total..................................................... 312,311,317 268,781,917
-------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions.................................... (66,737,125) (71,521,951)
-------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3).................. (1,923,481) (620,223)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 124,779,656 76,220,175
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 1,197,956,017 1,121,735,842
-------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS.................................... $1,322,735,673 $1,197,956,017
============== ==============
<CAPTION>
ASSET ALLOCATION SERIES (CONCLUDED):
----------------------------------
MERRILL LYNCH WORLD
STRATEGY FUND(a)
------------------------------
1998 1997
---------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)...................................... $ (11,329) $ 16,034
Net realized gain (loss) on investments........................... (103,174) 33,737
Change in unrealized appreciation
(depreciation) of investments.................................. 648,068 (153,612)
---------- -----------
Net increase in net assets from operations........................ 533,565 (103,841)
---------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions.................................................. 1,929,793 1,913,915
Transfers from other Funds and
Guaranteed Interest Account.................................. 7,365,231 8,826,145
---------- -----------
Total..................................................... 9,295,024 10,740,060
---------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits........................................... 340,072 156,911
Transfers to other Funds and
Guaranteed Interest Account.................................. 5,454,326 4,913,746
Withdrawal and administrative charges.......................... 10,176 622
---------- -----------
Total..................................................... 5,804,574 5,071,279
---------- -----------
Net increase (decrease) in net assets from
Contractowners transactions.................................... 3,490,450 5,668,781
---------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3).................. (179,747) (139,641)
---------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 3,844,268 5,425,299
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 5,425,299 --
---------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS.................................... $9,269,567 $ 5,425,299
========== ===========
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-15
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. General
The Equitable Life Assurance Society of the United States (Equitable Life)
Separate Account A (The Account) is organized as a unit investment trust, a
type of investment company, and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940. Alliance
Capital Management L.P., an indirect, majority-owned subsidiary of
Equitable Life, manages The Hudson River Trust (HR Trust) and is investment
adviser for all of the investment funds of HR Trust. EQ Financial
Consultants, Inc., an indirect, wholly owned subsidiary of Equitable Life,
manages the EQ Advisors Trust (EQ Trust) and has overall responsibility for
general management and administration of EQ Trust. The Account consists of
twenty-four investment funds (Funds): Alliance Money Market Fund, Alliance
Intermediate Government Securities Fund, Alliance Quality Bond Fund,
Alliance High Yield Fund, T. Rowe Price Equity Income Fund, EQ/Putnam
Growth & Income Value Fund, Alliance Growth & Income Fund, Alliance Equity
Index Fund, Merrill Lynch Basic Value Equity Fund, Alliance Common Stock
Fund, MFS Research Fund, Alliance Global Fund, Alliance International Fund,
T. Rowe Price International Stock Fund, Morgan Stanley Emerging Markets
Equity Fund, Alliance Aggressive Stock Fund, Warburg Pincus Small Company
Value Fund, Alliance Small Cap Growth Fund, MFS Emerging Growth Companies
Fund, Alliance Conservative Investors Fund, EQ/Putnam Balanced Fund,
Alliance Growth Investors Fund, Alliance Balanced Fund and Merrill Lynch
World Strategy Fund. The assets in each fund are invested in shares of a
corresponding portfolio (Portfolio) of a mutual fund, Class 1A or Class 1B
shares of HR Trust or Class 1B shares of EQ Trust (Collectively, the
"Trusts"). Class 1A and 1B shares are offered by the Trust at net asset
value. Both classes of shares are subject to fees for investment management
and advisory services and other Trust expenses. Class 1A shares are not
subject to distribution fees imposed pursuant to a distribution plan. Class
1B shares are subject to distribution fees imposed under a distribution
plan (herein, the "Rule 12b-1 Plans") adopted pursuant to Rule 12b-1 under
the 1940 Act, as amended. The Rule 12b-1 Plans provide that the Trusts, on
behalf of each Fund, may charge annually up to 0.25% of the average daily
net assets of a Fund attributable to its Class 1B shares in respect of
activities primarily intended to result in the sale of the Class 1B shares.
These fees are reflected in the net asset value of the shares. The Trusts
are open-end, diversified investment management companies that invest
separate account assets of insurance companies.
EQFC earns fees from both Trusts under distribution agreements held with
the Trusts. EQFC also earns fees under an investment management agreement
with the EQ Trust. Alliance earns fees under an investment advisory
agreement with the HR Trust.
The Account is used to fund benefits under certain individual tax-favored
variable annuity contracts (Old Contracts), individual non-qualified
variable annuity contracts (EQUIPLAN Contracts), tax-favored and
non-qualified certificates issued under group deferred variable annuity
contracts and certain related individual contracts (EQUI-VEST Contracts),
group deferred variable annuity contracts used to fund tax-qualified
defined contribution plans (Momentum Contracts) and group variable annuity
contracts used as a funding vehicle for employers who sponsor qualified
defined contribution plans (Momentum Plus). All of these contracts and
certificates are collectively referred to as the Contracts.
The net assets of the Account are not chargeable with liabilities arising
out of any other business Equitable Life may conduct. The excess of assets
over reserves and other contract liabilities, if any, in the Account may be
transferred to Equitable Life's General Account. Equitable Life's General
Account is subject to creditor rights. Due to/from Equitable Life's General
Account represents amounts receivable/payable to the General Account is
predominately related to policy-related transactions, premiums, surrenders
and death benefits.
FSA-16
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Investments are made in shares of the Trust and are valued at the net asset
values per share of the respective Portfolios. The net asset value is
determined by the Trust using the market or fair value of the underlying
assets of the Portfolio less liabilities.
Investment transactions are recorded by the Account on the trade date.
Dividends are declared by HR Trust at the end of each quarter and by EQ
Trust in the fourth quarter on the ex-dividend date. Dividends and capital
gain distributions are automatically reinvested on the ex-dividend date.
Realized gains and losses include gains and losses on redemptions of the
Trust's shares (determined on the identified cost basis) and Trust
distributions representing the net realized gains on Trust investment
transactions are distributed by the Trusts at the end of each year.
No federal income tax based on net income or realized and unrealized
capital gains is currently applicable to Contracts participating in the
Account by reason of applicable provisions of the Internal Revenue Code and
no federal income tax payable by Equitable Life is expected to affect the
unit value of Contracts participating in the Account. Accordingly, no
provision for income taxes is required. Equitable Life retains the right to
charge for any federal income tax incurred which is attributable to the
Account if the law is changed.
3. Asset Charges
The following charges are made directly against the daily net assets of the
Account and are reflected daily in the computation of the accumulation unit
values of the Contracts:
<TABLE>
<CAPTION>
DEATH MORTALITY EXPENSE FINANCIAL
BENEFITS RISKS EXPENSES RISKS ACCOUNTING TOTAL
------------- ------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQUI-VEST/
MOMENTUM
CONTRACTS
Alliance Money Market Fund,
Alliance Balanced Fund
Alliance Common Stock Fund 0.05% 0.30% 0.60% 0.30% 0.24% 1.49%
All Other Funds 0.05% 0.30% 0.60% 0.15% 0.24% 1.34%
MOMENTUM PLUS CONTRACTS--ALL
FUNDS -- 0.50% 0.25% 0.60% -- 1.35%
OLD CONTRACTS
Common Stock and Money Market
Funds 0.05% 0.45% 0.16% 0.08% -- .74%
EQUIPLAN CONTRACTS
Common Stock and
Intermediate Government
Securities Funds 0.05% 0.45% 0.16% 0.08% -- .74%
EQUI-VEST SERIES 300 & SERIES 400
CONTRACTS
Alliance Money Market Fund
Alliance Common Stock Fund
Alliance Aggressive Stock Fund
Alliance Balanced Fund -- 0.60% 0.25% 0.50% -- 1.35%
All Other Funds -- 0.60% 0.24%* 0.50% -- 1.34%
</TABLE>
FSA-17
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
3. Asset Charges (Continued)
<TABLE>
<CAPTION>
DEATH MORTALITY EXPENSE FINANCIAL
BENEFITS RISKS EXPENSES RISKS ACCOUNTING TOTAL
------------- ------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQUI-VEST SERIES 500 CONTRACTS
All Funds -- 0.70% 0.25% 0.50% -- 1.45%
EQUI-VEST SERIES 600 CONTRACTS
All Funds -- 0.45% 0.25% 0.50% -- 1.20%
</TABLE>
----------
* During 1998, Equitable Life charged EQUI-VEST Series 300 and 400
Contracts 0.24% against the assets of the HR Trust and EQ Trust Funds
for expenses, except as noted. This voluntary expense limitation
discounted from 0.25% to 0.24% may be discontinued by Equitable Life
at its discretion.
The above charges may be retained in the Account by Equitable Life and, to
the extent retained, participate in the net investment results of the Trust
ratably with assets attributable to the Contracts.
Since the Trust shares are valued at their net asset value, investment
advisory fees and direct operating expenses of the Trust are, in effect,
passed on to the Account and are reflected in the computation of the
accumulation unit values of the Contracts.
Under the terms of the Contracts, the aggregate of these asset charges and
the charges of the Trust for advisory fees and for direct operating
expenses may not exceed a total effective annual rate of 1.75% for
EQUI-VEST and Momentum Contracts for the Alliance Money Market Fund, the
Alliance Common Stock Fund, the Alliance Aggressive Stock Fund, the
Alliance Balanced Funds and 1% for the Old Contracts and EQUIPLAN
Contracts.
Under the Contracts, the total charges may be reallocated among the various
expense categories. Equitable Life, however, intends to limit any possible
reallocation to include only the expense risks, mortality risks and death
benefit charges.
4. Contributions, Payments, Transfers and Charges
Contributions represent participant contributions under EQUI-VEST,
Momentum, Momentum Plus and EQUI-VEST Series 300 through 600 Contracts (but
excludes amounts allocated to the Guaranteed Interest Account, which are
reflected in the General Account) and participant contributions under other
Contracts (Old Contracts, EQUIPLAN) reduced by applicable deductions,
charges and state premium taxes. Contributions also include amounts applied
to purchase variable annuities. Transfers are amounts that participants
have directed to be moved among the Funds, including permitted transfers to
and from the Guaranteed Interest Account, which is part of Equitable Life's
General Account.
Variable annuity payments and death benefits are payments to participants
and beneficiaries made under the terms of the Contracts. Withdrawals are
amounts that participants have requested to be withdrawn and paid to them
or applied to purchase annuities. Withdrawal charges, if applicable, are
the deferred contingent withdrawal charges that apply to certain
withdrawals under EQUI-VEST, Momentum, Momentum Plus and EQUI-VEST Series
300 through 600 Contracts. Administrative charges, if applicable, are
deducted annually under EQUI-VEST, EQUIPLAN and Old Contracts and quarterly
under Momentum, Momentum Plus and EQUI-VEST Series 300 through 600
Contracts.
FSA-18
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
Accumulation units issued and redeemed during the periods indicated were:
(Acronym BP refers to total Basis Points charged for that product as
described in Footnote 3)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Fixed Income Series:
ALLIANCE MONEY MARKET FUND
- --------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... 1,229,299 837,383
Momentum Contracts.......................................... 386,247 483,055
Momentum Plus Contracts 135 BP.............................. 503,516 588,908
Momentum Plus Contracts 100 BP.............................. 7,375 10,050
Old Contracts............................................... 42 120,867
EQUI-VEST Contracts Series 300 & 400 135 BP................. 458,194 258,260
EQUI-VEST Contracts Series 500 145 BP....................... 547 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 941,797 877,393
Momentum Contracts.......................................... 326,686 415,858
Momentum Plus Contracts 135 BP.............................. 506,664 564,110
Momentum Plus Contracts 100 BP.............................. 10,102 10,333
Old Contracts............................................... 2,025 1,572
EQUI-VEST Contracts Series 300 & 400 135 BP................. 341,437 277,148
EQUI-VEST Contracts Series 500 145 BP....................... 156 --
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND
- ------------------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,893 5,215
Momentum Plus Contracts 135 BP.............................. 50,402 29,724
Momentum Plus Contracts 100 BP.............................. 1,592 804
EQUIPLAN CONTRACTS.......................................... 4 49,549
EQUI-VEST Contracts Series 300 & 400 134 BP................. 216,535 105,144
EQUI-VEST Contracts Series 500 145 BP....................... 78 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 4,863 4,851
Momentum Plus Contracts 135 BP.............................. 51,462 31,521
Momentum Plus Contracts 100 BP.............................. 471 813
EQUIPLAN CONTRACTS.......................................... 4,747 2
EQUI-VEST Contracts Series 300 & 400 134 BP................. 103,688 50,075
EQUI-VEST Contracts Series 500 145 BP....................... 45 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-19
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Fixed Income Series (Continued):
ALLIANCE QUALITY BOND FUND
- --------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 10,469 7,848
Momentum Plus Contracts 135 BP.............................. 36,968 22,668
Momentum Plus Contracts 100 BP.............................. 444 449
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 483,053 167,788
EQUI-VEST Contracts Series 500 145 BP....................... 146 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,361 5,005
Momentum Plus Contracts 135 BP.............................. 27,523 12,495
Momentum Plus Contracts 100 BP.............................. 182 636
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 209,302 80,367
EQUI-VEST Contracts Series 500 145 BP....................... 19 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE HIGH YIELD FUND
- -----------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 19,540 17,805
Momentum Plus Contracts 135 BP.............................. 45,063 62,992
Momentum Plus Contracts 100 BP.............................. 1,531 1,622
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 976,709 726,147
EQUI-VEST Contracts Series 500 145 BP....................... 387 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 11,692 6,772
Momentum Plus Contracts 135 BP.............................. 55,069 42,608
Momentum Plus Contracts 100 BP.............................. 1,524 1,327
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 643,692 338,338
EQUI-VEST Contracts Series 500 145 BP....................... 8 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-20
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series:
T. ROWE PRICE EQUITY INCOME FUND
- -------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 1,360 --
Momentum Plus Contracts 135 BP.............................. 3,355 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 838,991 554,196
EQUI-VEST Contracts Series 500 145 BP....................... 418 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 214 --
Momentum Plus Contracts 135 BP.............................. 628 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 244,081 79,255
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
EQ/PUTNAM GROWTH & INCOME VALUE FUND
- ------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 523 --
Momentum Plus Contracts 135 BP.............................. 2,572 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 431,414 273,498
EQUI-VEST Contracts Series 500 145 BP....................... 407 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 328 --
Momentum Plus Contracts 100 BP.............................. 507 --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 99,601 23,834
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-21
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
ALLIANCE GROWTH & INCOME FUND
- -----------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 52,613 45,474
Momentum Plus Contracts 135 BP.............................. 113,506 116,065
Momentum Plus Contracts 100 BP.............................. 4,425 3,889
Momentum Plus Contracts 90 BP............................... 642 1,441
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,224,228 1,286,205
EQUI-VEST Contracts Series 500 145 BP....................... 1,401 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 25,771 17,193
Momentum Plus Contracts 135 BP.............................. 87,335 46,155
Momentum Plus Contracts 100 BP.............................. 1,838 2,901
Momentum Plus Contracts 90 BP............................... 38 337
EQUI-VEST Contracts Series 300 & 400 134 BP................. 548,572 462,065
EQUI-VEST Contracts Series 500 145 BP....................... 9 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE EQUITY INDEX FUND
- --------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 79,518 --
Momentum Plus Contracts 135 BP.............................. 205,393 --
Momentum Plus Contracts 100 BP.............................. 6,938 --
Momentum Plus Contracts 90 BP............................... 1,097 --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 3,094,562 2,967,392
EQUI-VEST Contracts Series 500 145 BP....................... 2,295 --
EQUI-VEST Contracts Series 600 120 BP....................... 3 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 37,943 --
Momentum Plus Contracts 135 BP.............................. 153,058 --
Momentum Plus Contracts 100 BP.............................. 1,574 --
Momentum Plus Contracts 90 BP............................... 193 --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,974,951 1,768,139
EQUI-VEST Contracts Series 500 145 BP....................... 44 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-22
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MERRILL LYNCH BASIC VALUE EQUITY FUND
- -------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 3,082 --
Momentum Plus Contracts 135 BP.............................. 2,932 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 563,336 177,242
EQUI-VEST Contracts Series 500 145 BP....................... 352 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 991 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 263,606 32,592
EQUI-VEST Contracts Series 500 145 BP....................... 10 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE COMMON STOCK FUND
- --------------------------
Issued -- EQUI-VEST Contracts......................................... 4,199,955 4,383,156
Momentum Contracts.......................................... 171,967 204,382
Momentum Plus Contracts 135 BP.............................. 479,798 545,202
Momentum Plus Contracts 100 BP.............................. 10,617 41,653
Momentum Plus Contracts 90 BP............................... 2,467 6,431
Old Contracts............................................... 19 301,258
EQUIPLAN Contracts.......................................... 4 86,999
EQUI-VEST Contracts Series 300 & 400 135 BP................. 2,035,253 1,968,780
EQUI-VEST Contracts Series 500 145 BP....................... 4,784 --
EQUI-VEST Contracts Series 600 120 BP....................... 2 --
Redeemed -- EQUI-VEST Contracts......................................... 4,354,955 3,930,073
Momentum Contracts.......................................... 169,605 134,959
Momentum Plus Contracts 135 BP.............................. 539,175 354,590
Momentum Plus Contracts 100 BP.............................. 8,027 142,434
Momentum Plus Contracts 90 BP............................... 686 1,552
Old Contracts............................................... 42,795 3,085
EQUIPLAN Contracts.......................................... 14,746 1,986
EQUI-VEST Contracts Series 300 & 400 135 BP................. 992,260 660,995
EQUI-VEST Contracts Series 500 145 BP....................... 56 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-23
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MFS RESEARCH FUND
- -----------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 4,266 --
Momentum Plus Contracts 135 BP.............................. 3,956 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 811,244 273,002
EQUI-VEST Contracts Series 500 145 BP....................... 897 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 455 --
Momentum Plus Contracts 135 BP.............................. 1,331 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 327,759 36,730
EQUI-VEST Contracts Series 500 145 BP....................... 11 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE GLOBAL FUND
- --------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 49,409 67,282
Momentum Plus Contracts 135 BP.............................. 127,169 173,371
Momentum Plus Contracts 100 BP.............................. 2,960 3,421
Momentum Plus Contracts 90 BP............................... 1,062 2,872
EQUI-VEST Contracts Series 300 & 400 134 BP................. 885,709 1,087,193
EQUI-VEST Contracts Series 500 145 BP....................... 509 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 40,074 36,989
Momentum Plus Contracts 135 BP.............................. 182,741 151,688
Momentum Plus Contracts 100 BP.............................. 3,546 3,187
Momentum Plus Contracts 90 BP............................... 266 468
EQUI-VEST Contracts Series 300 & 400 134 BP................. 859,826 712,463
EQUI-VEST Contracts Series 500 145 BP....................... 12 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-24
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
ALLIANCE INTERNATIONAL FUND
- ---------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 19,308 23,465
Momentum Plus Contracts 135 BP.............................. 45,097 61,102
Momentum Plus Contracts 100 BP.............................. 1,430 8,513
Momentum Plus Contracts 90 BP............................... 368 1,175
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,265,890 1,473,483
EQUI-VEST Contracts Series 500 145 BP....................... 149 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 14,348 10,479
Momentum Plus Contracts 135 BP.............................. 43,776 25,904
Momentum Plus Contracts 100 BP.............................. 860 25,384
Momentum Plus Contracts 90 BP............................... 162 387
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,262,822 1,268,707
EQUI-VEST Contracts Series 500 145 BP....................... 4 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 1,408 --
Momentum Plus Contracts 135 BP.............................. 3,038 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 922,463 590,328
EQUI-VEST Contracts Series 500 145 BP....................... 245 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 904 --
Momentum Plus Contracts 135 BP.............................. 401 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 640,201 201,762
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-25
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND
- -------------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 453 --
Momentum Plus Contracts 135 BP.............................. 1,191 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 971,105 228,577
EQUI-VEST Contracts Series 500 145 BP....................... 86 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 84 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 863,432 119,707
EQUI-VEST Contracts Series 500 145 BP....................... 2 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE AGGRESSIVE STOCK FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... 7,874,975 12,306,387
Momentum Contracts.......................................... 567,249 663,082
Momentum Plus Contracts 135 BP.............................. 444,735 574,827
Momentum Plus Contracts 100 BP.............................. 10,329 36,380
Momentum Plus Contracts 90 BP............................... 2,726 9,299
EQUI-VEST Contracts Series 300 & 400 135 BP................. 2,038,278 2,341,814
EQUI-VEST Contracts Series 500 145 BP....................... 1,374 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 10,271,285 12,221,170
Momentum Contracts.......................................... 604,014 506,394
Momentum Plus Contracts 135 BP.............................. 567,458 369,618
Momentum Plus Contracts 100 BP.............................. 8,422 107,896
Momentum Plus Contracts 90 BP............................... 1,959 2,386
EQUI-VEST Contracts Series 300 & 400 135 BP................. 1,922,386 1,583,469
EQUI-VEST Contracts Series 500 145 BP....................... 2 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-26
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
WARBURG PINCUS SMALL COMPANY VALUE FUND
- ---------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 423 --
Momentum Plus Contracts 135 BP.............................. 2,025 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 612,043 944,293
EQUI-VEST Contracts Series 500 145 BP....................... 327 --
EQUI-VEST Contracts Series 600 120 BP....................... 2 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 61 --
Momentum Plus Contracts 135 BP.............................. 482 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 329,886 367,754
EQUI-VEST Contracts Series 500 145 BP....................... 7 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE SMALL CAP GROWTH FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 28,706 6,275
Momentum Plus Contracts 135 BP.............................. 47,698 8,595
Momentum Plus Contracts 100 BP.............................. 305 --
Momentum Plus Contracts 90 BP............................... 977 466
EQUI-VEST Contracts Series 300 & 400 134 BP................. 3,265,688 1,187,782
EQUI-VEST Contracts Series 500 145 BP....................... 603 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 7,539 139
Momentum Plus Contracts 135 BP.............................. 14,989 743
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... 119 700,040
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,652,769 --
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-27
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Concluded):
MFS EMERGING GROWTH COMPANIES FUND
- ----------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,123 --
Momentum Plus Contracts 135 BP.............................. 8,576 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,078,356 424,497
EQUI-VEST Contracts Series 500 145 BP....................... 1,523 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 1,491 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,244,873 168,426
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Asset Allocation Series:
ALLIANCE CONSERVATIVE INVESTORS FUND
- ------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 8,324 8,745
Momentum Plus Contracts 135 BP.............................. 40,973 45,283
Momentum Plus Contracts 100 BP.............................. 1,546 1,777
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 213,369 114,868
EQUI-VEST Contracts Series 500 145 BP....................... 49 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 7,000 4,397
Momentum Plus Contracts 135 BP.............................. 45,023 52,105
Momentum Plus Contracts 100 BP.............................. 2,688 1,102
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 105,278 128,454
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-28
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Asset Allocation Series (Continued):
EQ/PUTNAM BALANCED FUND
- -----------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 442 --
Momentum Plus Contracts 135 BP.............................. 1,376 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 290,577 175,775
EQUI-VEST Contracts Series 500 145 BP....................... 174 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 116 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 124,887 66,296
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE GROWTH INVESTORS FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 50,095 70,069
Momentum Plus Contracts 135 BP.............................. 148,895 206,206
Momentum Plus Contracts 100 BP.............................. 4,888 3,369
Momentum Plus Contracts 90 BP............................... 685 2,935
EQUI-VEST Contracts Series 300 & 400 134 BP................. 882,636 1,019,421
EQUI-VEST Contracts Series 500 145 BP....................... 744 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 38,654 33,111
Momentum Plus Contracts 135 BP.............................. 192,540 138,201
Momentum Plus Contracts 100 BP.............................. 3,629 3,482
Momentum Plus Contracts 90 BP............................... 118 1,446
EQUI-VEST Contracts Series 300 & 400 134 BP................. 624,987 640,400
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-29
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Concluded):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Asset Allocation Series (Concluded):
ALLIANCE BALANCED FUND
- ----------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... 4,212,025 3,643,409
Momentum Contracts.......................................... 226,716 272,369
Momentum Plus Contracts 135 BP.............................. 155,854 168,722
Momentum Plus Contracts 100 BP.............................. 4,058 15,895
Momentum Plus Contracts 90 BP............................... 487 2,030
EQUI-VEST Contracts Series 300 & 400 135 BP................. 357,343 263,741
EQUI-VEST Contracts Series 500 145 BP....................... 493 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 5,887,319 5,926,775
Momentum Contracts.......................................... 292,550 277,292
Momentum Plus Contracts 135 BP.............................. 220,244 131,565
Momentum Plus Contracts 100 BP.............................. 3,530 52,839
Momentum Plus Contracts 90 BP............................... 61 1,298
EQUI-VEST Contracts Series 300 & 400 135 BP................. 260,878 156,561
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
MERRILL LYNCH WORLD STRATEGY FUND
- ---------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 112 --
Momentum Plus Contracts 135 BP.............................. 841 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 85,123 98,231
EQUI-VEST Contracts Series 500 145 BP....................... 25 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 50 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 53,481 45,952
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-30
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets
Net assets consist of net assets attributable to: (i) Contracts in the
accumulation period, which are represented by Contract accumulation units
outstanding multiplied by net unit values and (ii) actuarial reserves and
other liabilities attributable to Contracts in the payout period which are
not represented by accumulation units or unit values.
Listed below are components of net assets:
<TABLE>
<CAPTION>
FIXED INCOME SERIES: EQUITY SERIES:
------------------------------------------------------------ ----------------------------
ALLIANCE
INTER- EQ/PUTNAM
MEDIATE ALLIANCE ALLIANCE T. ROWE GROWTH &
ALLIANCE GOVERNMENT QUALITY HIGH PRICE EQUITY INCOME
MONEY SECURITIES BOND YIELD INCOME VALUE
MARKET FUND FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ............. 38,523,428 -- -- -- -- --
Net assets attributable
to Old Contracts in
accumulation period ............. 4,312,389 -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ............. -- 2,616,986 -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ............. 11,218,510 1,437,192 1,964,317 5,501,246 149,136 65,510
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ............. 38,847,043 9,240,280 6,425,658 16,040,479 276,389 175,260
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ............. 1,159,113 427,602 179,813 761,000 -- --
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ............. -- -- -- -- -- --
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ............. 31,535,332 39,758,609 72,429,089 175,147,544 139,347,246 74,544,834
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ............. 39,859 3,410 13,160 33,807 42,218 40,895
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ............. -- -- -- 89 101 101
Net assets attributable
to actuarial reserves,
financial reserves, and
other contract
liabilities
attributable to
Contracts in payout ............. 271,442 17,915 454,340 699,291 -- --
------------ ----------- ----------- ------------ ------------ -----------
$125,907,116 $53,501,994 $81,466,377 $198,183,456 $139,815,090 $74,826,600
============ =========== =========== ============ ============ ===========
</TABLE>
FSA-31
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Continued):
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------------------------------------------
MERRILL
ALLIANCE ALLIANCE LYNCH BASIC
GROWTH & EQUITY VALUE ALLIANCE MFS ALLIANCE
INCOME INDEX EQUITY COMMON STOCK RESEARCH GLOBAL
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- 5,578,588,050 -- --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- 107,448,483 -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- 30,994,430 -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 20,534,526 36,675,445 393,479 191,376,071 536,562 28,455,218
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 44,797,660 76,744,192 191,344 299,298,111 264,368 75,882,027
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... 1,128,819 2,312,294 -- 8,221,702 -- 1,769,643
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... 297,636 800,229 -- 1,267,407 -- 471,680
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 529,235,127 1,032,108,886 56,734,346 1,468,792,789 101,361,254 619,628,198
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 143,000 233,384 33,448 486,472 87,507 48,890
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... -- 311 98 206 -- 98
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... 2,885,763 3,413,426 -- 39,299,681 -- 544,414
------------ -------------- ----------- -------------- ------------ ------------
$599,022,531 $1,152,288,167 $57,352,715 $7,725,773,402 $102,249,691 $726,800,168
============ ============== =========== ============== ============ ============
</TABLE>
FSA-32
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Continued):
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------------------------------------------
T. ROWE MORGAN WARBURG
PRICE STANLEY PINCUS ALLIANCE
ALLIANCE INTER- EMERGING ALLIANCE SMALL SMALL
INTER- NATIONAL MARKETS AGGRESSIVE COMPANY CAP
NATIONAL STOCK EQUITY STOCK VALUE GROWTH
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- 2,304,985,451 -- --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 4,377,889 55,292 25,903 125,948,516 38,050 3,237,317
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 10,184,498 261,030 95,457 186,727,114 128,276 4,808,507
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... 450,353 -- -- 5,101,533 -- 36,371
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... 114,042 -- -- 911,462 -- 158,152
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 114,319,069 73,451,923 12,381,723 540,090,983 90,009,744 130,505,375
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 13,485 23,040 6,756 123,823 26,572 52,506
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... -- -- 81 -- 166 87
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... 562,451 -- -- 4,609,704 -- 108,367
------------ ----------- ----------- -------------- ----------- ------------
$130,021,787 $73,791,285 $12,509,920 $3,168,498,586 $90,202,808 $138,906,682
============ =========== =========== ============== =========== ============
</TABLE>
FSA-33
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Concluded):
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED): ASSET ALLOCATION SERIES:
------------------------------- ------------------------------------------------------------------
MFS ALLIANCE MERRILL
EMERGING CONSER- ALLIANCE LYNCH
GROWTH VATIVE EQ/PUTNAM GROWTH ALLIANCE WORLD
COMPANIES INVESTORS BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- -- 1,097,942,924 --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 825,008 3,489,106 55,321 28,639,790 44,449,206 12,249
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 763,267 17,445,149 128,104 92,985,008 59,417,722 76,157
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... -- 576,228 -- 2,373,243 1,662,704 --
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... -- -- -- 307,598 166,289 --
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 175,456,981 97,305,713 34,439,759 715,666,898 118,465,723 9,178,694
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 157,390 5,034 17,482 75,836 50,581 2,372
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... 104 103 -- 102 -- 95
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... -- 1,042,019 -- 2,169,556 580,524 --
------------ ------------ ----------- ------------ -------------- ----------
$177,202,750 $119,863,352 $34,640,666 $842,218,031 $1,322,735,673 $9,269,567
============ ============ =========== ============ ============== ==========
</TABLE>
FSA-34
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values
Shown below is accumulation unit value information for units outstanding.
<TABLE>
<CAPTION>
ALLIANCE MONEY MARKET FUND -- OLD CONTRACTS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $35.12 $33.52 $32.00 $30.44 $29.43 $28.75 $27.92 $26.47 $24.59 $22.66
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Unit value, end of period....... $36.76 $35.12 $33.52 $32.00 $30.44 $29.43 $28.75 $27.92 $26.47 $24.59
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of units outstanding,
end of period (000's)........ 117 119 129 140 147 168 204 246 289 310
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
<CAPTION>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 100 AND 200/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $29.41 $28.28 $27.22 $26.08 $25.41 $25.01 $24.48 $23.38 $21.89 $20.32
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Unit value, end of period....... $30.55 $29.41 $28.28 $27.22 $26.08 $25.41 $25.01 $24.48 $23.38 $21.89
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of EQUI-VEST units
outstanding, end of period
(000's)...................... 1,261 973 1,013 1,021 1,000 1,065 1,201 1,325 1,307 1,045
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of Momentum units
outstanding, end of
period (000's)............... 367 308 240 188 166 56
======= ======= ======= ======= ======= =======
<CAPTION>
ALLIANCE MONEY MARKET FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $116.21 $111.75 $107.55 $103.10 $100.47 $100.00
======== ======== ======== ======== ======== ========
Unit value, end of period........................ $120.76 $116.21 $111.75 $107.55 $103.10 $100.47
======== ======== ======== ======== ======== ========
Number of units outstanding, end of period (000's) 322 325 307 299 474 62
======== ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE MONEY MARKET FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $110.26 $105.65 $100.00
======== ======== ========
Unit value, end of period........................ $114.98 $110.26 $105.65
======== ======== ========
Number of units outstanding, end of period (000's) 10 13 13
======== ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-35
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $115.66 $111.21 $107.04 $102.61 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $120.19 $115.66 $111.21 $107.04 $102.61
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 262 146 165 81 63
======== ========= ========= ======== ========
</TABLE>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.68
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.68
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- EQUIPLAN CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- ------- -------- -------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $54.83 $51.34 $49.69 $44.04 $46.25 $42.04 $40.00 $35.17 $33.12 $28.89
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Unit value, end of period....... $58.81 $54.83 $51.34 $49.69 $44.04 $46.25 $42.04 $40.00 $35.17 $33.12
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Number of units outstanding,
end of period (000's)........ 45 50 55 50 54 58 66 74 82 91
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $118.98 $112.40 $109.80 $ 98.19 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $126.48 $118.98 $112.40 $109.80 $ 98.19
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 11 10 10 7 1
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-36
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $114.78 $108.45 $105.94 $ 94.76 $100.44 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $122.00 $114.78 $108.45 $105.94 $ 94.76 $100.44
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 76 77 81 88 64 1
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $112.32 $105.75 $100.00
======== ======== =========
Unit value, end of period........................ $119.81 $112.32 $105.75
======== ======== =========
Number of units outstanding, end of period (000's) 4 2 2
======== ======== =========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- EQUI-VEST
SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $118.98 $112.40 $109.80 $ 98.19 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $126.48 $118.98 $112.40 $109.80 $ 98.19
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 314 202 146 89 32
======== ========= ========= ======== ========
</TABLE>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.32
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-37
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.32
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $121.30 $112.65 $108.38 $ 93.87 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $130.07 $121.30 $112.65 $108.38 $ 93.87
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 15 10 7 4 1
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $127.99 $118.87 $114.38 $ 99.07 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $137.23 $127.99 $118.87 $114.38 $ 99.07
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 47 37 28 17 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-38
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $117.60 $108.84 $100.00
======== ======== =========
Unit value, end of period........................ $126.54 $117.60 $108.84
======== ======== =========
Number of units outstanding, end of period (000's) 1 1 1
======== ======== =========
<CAPTION>
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $121.30 $112.65 $108.38 $ 93.87 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $130.07 $121.30 $112.65 $108.38 $ 93.87
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 557 283 196 135 53
======== ========= ========= ======== ========
</TABLE>
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.62
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.62
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994* TO
1998 1997 1996 1995 DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $160.74 $137.53 $113.44 $ 95.88 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $150.42 $160.74 $137.53 $113.44 $ 95.88
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 37 29 18 7 1
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-39
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $171.56 $146.80 $121.10 $102.37 $106.74 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $160.53 $171.56 $146.80 $121.10 $102.37 $106.74
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 100 110 94 70 38 1
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996
1998 1997 TO DECEMBER 31, 1996*
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $149.49 $127.46 $100.00
======== ======== =========
Unit value, end of period........................ $140.38 $149.49 $127.46
======== ======== =========
Number of units outstanding, end of period (000's) 5 5 5
======== ======== =========
<CAPTION>
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $160.74 $137.53 $113.44 $ 95.88 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $150.42 $160.74 $137.53 $113.44 $ 95.88
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 1,164 831 444 209 99
======== ========= ========= ======== ========
</TABLE>
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 89.20
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-40
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 89.20
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $130.25
=========
Number of units outstanding, end of period (000's) 1
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.39
=========
Number of units outstanding, end of period (000's) 3
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.56
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-41
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.61
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------
<S> <C> <C>
Unit value, beginning of period.................. $121.04 $100.00
========= =========
Unit value, end of period........................ $130.25 $121.04
========= =========
Number of units outstanding, end of period (000's) 1,070 475
========= =========
</TABLE>
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.00
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.12
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-42
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $128.20
=========
Number of units outstanding, end of period (000's) 1
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.60
=========
Number of units outstanding, end of period (000's) 2
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.77
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.82
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-43
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.17 $100.00
========= ========
Unit value, end of period........................ $128.20 $115.17
========= ========
Number of units outstanding, end of period (000's) 581 250
========= ========
</TABLE>
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.48
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.60
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.30 $143.37 $121.02 $ 98.86 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $213.81 $179.30 $143.37 $121.02 $ 98.86
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 96 69 41 17 4
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-44
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- -------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.60 $143.63 $121.25 $ 99.06 $100.00
======== ======== ========= ======== ========
Unit value, end of period........................ $214.14 $179.60 $143.63 $121.25 $ 99.06
======== ======== ========= ======== ========
Number of units outstanding, end of period (000's) 209 183 121 67 9
======== ======== ========= ======== ========
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $155.11 $123.61 $100.00
======== ======== =========
Unit value, end of period........................ $185.60 $155.11 $123.61
======== ======== =========
Number of units outstanding, end of period (000's) 6 3 3
======== ======== =========
</TABLE>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $145.48 $115.81
======== ========
Unit value, end of period........................ $174.26 $145.48
======== ========
Number of units outstanding, end of period (000's) 2 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.30 $143.37 $121.02 $ 98.86 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $213.81 $179.30 $143.37 $121.02 $ 98.86
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 2,475 1,800 975 498 210
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-45
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.73
=========
Number of units outstanding, end of period (000's) 1
=========
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.73
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.66 $164.12 $135.94 $100.95 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.24 $214.66 $164.12 $135.94 $100.95
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 135 94 51 12 1
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.58 $164.08 $135.92 $100.94 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.11 $214.58 $164.08 $135.92 $100.94
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 283 231 128 44 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-46
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $170.23 $139.70 $100.00
======== ======== =========
Unit value, end of period........................ $215.84 $170.23 $139.70
======== ======== =========
Number of units outstanding, end of period (000's) 11 5 4
======== ======== =========
</TABLE>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $150.05 $114.21
======== ========
Unit value, end of period........................ $190.44 $150.05
======== ========
Number of units outstanding, end of period (000's) 4 3
======== ========
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.66 $164.12 $135.94 $100.95 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.24 $214.66 $164.12 $135.94 $100.95
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,805 2,686 1,486 592 47
======== ========= ========= ======== ========
</TABLE>
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.68
=========
Number of units outstanding, end of period (000's) 2
=========
- ------------------
*Date on which units were made available for sale.
FSA-47
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.69
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $127.67
=========
Number of units outstanding, end of period (000's) 3
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.58
=========
Number of units outstanding, end of period (000's) 2
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.75
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-48
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.80
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MERRILL LYNCH BASIC VALUE EQUITY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.97 $100.00
========= ========
Unit value, end of period........................ $127.67 $115.97
========= ========
Number of units outstanding, end of period (000's) 444 145
========= ========
</TABLE>
MERRILL LYNCH BASIC VALUE EQUITY FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 97.80
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 97.91
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-49
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- OLD CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $316.64 $246.57 $199.66 $151.67 $155.96 $125.72 $122.56 $ 89.56 $97.97 $78.37
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Unit value, end of period....... $407.19 $316.64 $246.57 $199.66 $151.67 $155.96 $125.72 $122.56 $89.56 $97.97
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of units outstanding,
end of period (000's)........ 264 307 345 387 438 467 525 598 694 780
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 100 AND 200/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $253.68 $199.05 $162.42 $124.32 $128.81 $104.63 $102.76 $ 75.67 $83.40 $67.22
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Unit value, end of period....... $323.75 $253.68 $199.05 $162.42 $124.32 $128.81 $104.63 $102.76 $75.67 $83.40
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 17,231 17,386 16,933 16,292 15,749 13,917 11,841 10,292 9,670 8,645
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of Momentum units
outstanding, end of
period (000's)............... 591 519 403 270 120
======== ======== ========= ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUIPLAN CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $342.99 $267.08 $216.27 $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05 $ 84.83
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
Unit value, end of period....... $441.07 $342.99 $267.08 $216.27 $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
Number of units outstanding,
end of period (000's)........ 70 85 96 108 119 124 135 144 157 177
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-50
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $207.00 $162.39 $132.47 $101.38 $105.01 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $264.22 $207.00 $162.39 $132.47 $101.38 $105.01
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 1,133 1,192 1,039 706 330 12
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $161.04 $125.89 $100.00
======== ======== =========
Unit value, end of period........................ $206.28 $161.04 $125.89
======== ======== =========
Number of units outstanding, end of period (000's) 40 37 140
======== ======== =========
</TABLE>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $148.44 $115.92
======== ========
Unit value, end of period........................ $190.33 $148.44
======== ========
Number of units outstanding, end of period (000's) 7 5
======== ========
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $198.12 $155.42 $126.78 $ 97.03 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $252.88 $198.12 $155.42 $126.78 $ 97.03
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 5,808 4,765 3,457 1,989 948
======== ========= ========= ======== ========
</TABLE>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.87
=========
Number of units outstanding, end of period (000's) 5
=========
- ------------------
*Date on which units were made available for sale.
FSA-51
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.87
=========
Number of units outstanding, end of period (000's) --
=========
MFS RESEARCH FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $140.83
=========
Number of units outstanding, end of period (000's) 4
=========
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.75
=========
Number of units outstanding, end of period (000's) 3
=========
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.92
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-52
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.97
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MFS RESEARCH FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.01 $100.00
========= ========
Unit value, end of period........................ $140.83 $115.01
========= ========
Number of units outstanding, end of period (000's) 720 236
========= ========
</TABLE>
MFS RESEARCH FUND -- EQUI-VEST SERIES 500 CONTRACTS: 134 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.99
=========
Number of units outstanding, end of period (000's) 1
=========
MFS RESEARCH FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.10
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-53
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $151.87 $138.00 $122.06 $104.12 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $182.50 $151.87 $138.00 $122.06 $104.12
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 156 147 116 62 16
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $154.12 $140.51 $124.30 $106.04 $102.14 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $185.78 $154.12 $140.51 $124.30 $106.04 $102.14
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 408 464 459 391 223 8
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $128.51 $116.37 $100.00
======== ======== =========
Unit value, end of period........................ $154.96 $128.51 $116.37
======== ======== =========
Number of units outstanding, end of period (000's) 11 12 13
======== ======== =========
</TABLE>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $122.12 $110.47
======== ========
Unit value, end of period........................ $147.40 $122.12
======== ========
Number of units outstanding, end of period (000's) 3 2
======== ========
<TABLE>
<CAPTION>
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $151.87 $138.00 $122.06 $104.12 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $182.50 $151.87 $138.00 $122.06 $104.12
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,395 3,369 2,995 2,121 1,305
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-54
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.37
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.37
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.92 $112.82 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.72 $107.92 $112.82 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 37 32 19 0
======== ========= ========= ========
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.89 $112.81 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.68 $107.89 $112.81 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 87 85 54 3
======== ========= ========= ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-55
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $108.42 $112.96 $100.00
======== ======== =========
Unit value, end of period........................ $118.67 $108.42 $112.96
======== ======== =========
Number of units outstanding, end of period (000's) 4 3 21
======== ======== =========
</TABLE>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $104.70 $108.98
======== ========
Unit value, end of period........................ $114.73 $104.70
======== ========
Number of units outstanding, end of period (000's) 1 788
======== ========
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.92 $112.83 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.72 $107.92 $112.83 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 971 968 763 141
======== ========= ========= ========
</TABLE>
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 93.00
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 93.00
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-56
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $109.49
=========
Number of units outstanding, end of period (000's) 1
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.95
=========
Number of units outstanding, end of period (000's) 3
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.11
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.16
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-57
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
T. ROWE PRICE INTERNATIONAL STOCK FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $ 97.61 $100.00
========= ========
Unit value, end of period........................ $109.49 $ 97.61
========= ========
Number of units outstanding, end of period (000's) 671 387
========= ========
</TABLE>
T. ROWE PRICE INTERNATIONAL STOCK FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.04
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.15
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 57.18
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.23
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-58
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.38
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.42
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED AUGUST 20, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $ 79.41 $100.00
========= ========
Unit value, end of period........................ $ 57.18 $ 79.41
========= ========
Number of units outstanding, end of period (000's) 217 109
========= ========
</TABLE>
MORGAN STANLEY EMERGING MARKETS EQUITY FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 81.40
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-59
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 81.49
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $90.75 $82.91 $68.73 $52.88 $55.68 $48.30 $50.51 $27.36 $25.86 $18.09
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Unit value, end of period....... $89.92 $90.75 $82.91 $68.73 $52.88 $55.68 $48.30 $50.51 $27.36 $25.86
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 25,634 28,030 27,945 25,821 24,787 21,496 17,986 12,962 9,545 8,134
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Number of Momentum units
outstanding, end of
period (000's)............... 1,401 1,437 1,281 969 620 258
======== ======== ========= ======== ======== =========
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $171.96 $157.31 $130.50 $100.49 $105.90 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $170.12 $171.96 $157.31 $130.50 $100.49 $105.90
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 1,098 1,220 1,070 718 350 12
======== ========= ========= ======== ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-60
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $137.72 $125.54 $100.00
======== ======== =========
Unit value, end of period........................ $136.73 $137.72 $125.54
======== ======== =========
Number of units outstanding, end of period (000's) 37 35 109
======== ======== =========
</TABLE>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $119.41 $108.74
======== ========
Unit value, end of period........................ $118.68 $119.41
======== ========
Number of units outstanding, end of period (000's) 8 7
======== ========
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $163.33 $149.41 $123.95 $ 95.45 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $161.59 $163.33 $149.41 $123.95 $ 95.45
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,342 3,226 2,468 1,310 664
======== ========= ========= ======== ========
</TABLE>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 90.25
=========
Number of units outstanding, end of period (000's) 1
=========
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 90.25
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-61
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $104.82
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.08
=========
Number of units outstanding, end of period (000's) 2
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.22
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.26
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-62
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
WARBURG PINCUS SMALL COMPANY VALUE FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $118.06 $100.00
========= ========
Unit value, end of period........................ $104.82 $118.06
========= ========
Number of units outstanding, end of period (000's) 859 577
========= ========
</TABLE>
WARBURG PINCUS SMALL COMPANY VALUE FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 82.78
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 82.88
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.55 $100.00
========= ========
Unit value, end of period........................ $118.57 $125.55
========= ========
Number of units outstanding, end of period (000's) 27 6
========= ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-63
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.54 $100.00
========= ========
Unit value, end of period........................ $118.55 $125.54
========= ========
Number of units outstanding, end of period (000's) 41 8
========= ========
</TABLE>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $119.25
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $119.45
=========
Number of units outstanding, end of period (000's) 1
=========
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.55 $100.00
========= ========
Unit value, end of period........................ $118.57 $125.55
========= ========
Number of units outstanding, end of period (000's) 1,101 488
========= ========
</TABLE>
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.93
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-64
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.94
=========
Number of units outstanding, end of period (000's) --
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $161.04
=========
Number of units outstanding, end of period (000's) 5
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.73
=========
Number of units outstanding, end of period (000's) 7
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.91
=========
Number of units outstanding, end of period (000's) --
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.96
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-65
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $121.34 $100.00
========= ========
Unit value, end of period........................ $161.04 $121.34
========= ========
Number of units outstanding, end of period (000's) 1,090 256
========= ========
</TABLE>
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.41
=========
Number of units outstanding, end of period (000's) 1
=========
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.53
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $130.98 $117.25 $112.97 $ 95.10 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $147.17 $130.98 $117.25 $112.97 $ 95.10
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 24 22 18 11 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-66
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $128.45 $114.99 $110.81 $ 93.29 $ 98.60 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $144.30 $128.45 $114.99 $110.81 $ 93.29 $ 98.60
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 121 125 136 129 92 10
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $122.71 $109.47 $100.00
======== ======== =========
Unit value, end of period........................ $138.35 $122.71 $109.47
======== ======== =========
Number of units outstanding, end of period (000's) 4 5 5
======== ======== =========
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------------------
1998 1997 1996 1995 1994
-------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $130.98 $117.25 $112.97 $ 95.10 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $147.17 $130.98 $117.25 $112.97 $ 95.10
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 661 553 567 491 325
======== ========= ========= ======== ========
</TABLE>
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.74
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.74
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-67
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
EQ/PUTNAM BALANCED FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $125.16
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.67
=========
Number of units outstanding, end of period (000's) 1
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.84
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.89
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-68
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $113.46 $100.00
========= ========
Unit value, end of period........................ $125.16 $113.46
========= ========
Number of units outstanding, end of period (000's) 275 109
========= ========
</TABLE>
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.05
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.17
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $153.69 $133.40 $120.08 $ 96.31 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $180.63 $153.69 $133.40 $120.08 $ 96.31
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 159 147 110 57 10
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-69
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $155.46 $134.95 $121.49 $ 97.45 $101.99 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $182.69 155.46 $134.95 $121.49 $ 97.45 $101.99
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 509 553 508 375 188 13
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $135.20 $116.95 $100.00
======== ======== =========
Unit value, end of period........................ $159.46 $135.20 $116.95
======== ======== =========
Number of units outstanding, end of period (000's) 15 14 15
======== ======== =========
</TABLE>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $126.72 $109.51
======== ========
Unit value, end of period........................ $149.61 $126.72
======== ========
Number of units outstanding, end of period (000's) 2 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $153.69 $133.40 $120.08 $ 96.31 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $180.63 $153.69 $133.40 $120.08 $ 96.31
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,962 3,704 3,325 2,113 1,023
======== ========= ========= ======== ========
</TABLE>
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.93
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-70
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.93
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE BALANCED FUND -- EQUI-VEST/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
------- -------- -------- -------- -------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $38.66 $34.06 $30.92 $26.18 $28.85 $26.04 $27.17 $19.40 $19.69 $15.80
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Unit value, end of period....... $45.07 $38.66 $34.06 $30.92 $26.18 $28.85 $26.04 $27.17 $19.40 $19.69
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 24,361 26,036 28,319 30,212 32,664 31,259 25,975 21,100 19,423 16,810
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Number of Momentum units
outstanding, end of
period (000's)............... 986 1,052 1,057 957 776 348
======= ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $136.14 $120.01 $108.95 $ 92.22 $101.63 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $158.63 $136.14 $120.01 $108.95 $ 92.22 $101.63
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 375 439 417 336 188 9
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $129.97 $114.16 $100.00
======== ======== =========
Unit value, end of period........................ $151.97 $129.97 $114.16
======== ======== =========
Number of units outstanding, end of period (000's) 11 10 48
======== ======== =========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-71
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $122.68 $100.00
======== ========
Unit value, end of period........................ $143.60 $122.68
======== ========
Number of units outstanding, end of period (000's) 1 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $135.29 $119.26 $108.26 $ 91.64 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $157.63 $135.29 $119.26 $108.26 $ 91.64
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 752 655 548 386 289
======== ========= ========= ======== ========
</TABLE>
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.39
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.39
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-72
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $109.37
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.28
=========
Number of units outstanding, end of period (000's) 1
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.44
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.49
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-73
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Concluded):
<TABLE>
<CAPTION>
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $103.77 $100.00
========= ========
Unit value, end of period........................ $109.37 $103.77
========= ========
Number of units outstanding, end of period (000's) 84 52
========= ========
</TABLE>
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.86
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.96
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-74
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and comprehensive
income and of cash flows present fairly, in all material respects, the financial
position of The Equitable Life Assurance Society of the United States and its
subsidiaries ("Equitable Life") at December 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of Equitable
Life's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, Equitable Life
changed its method of accounting for long-lived assets in 1996.
/s/PricewaterhouseCoopers LLP
- -----------------------------
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 18,993.7 $ 19,630.9
Held to maturity, at amortized cost..................................... 125.0 -
Mortgage loans on real estate............................................. 2,809.9 2,611.4
Equity real estate........................................................ 1,676.9 2,495.1
Policy loans.............................................................. 2,086.7 2,422.9
Other equity investments.................................................. 713.3 951.5
Investment in and loans to affiliates..................................... 928.5 731.1
Other invested assets..................................................... 808.2 612.2
----------------- -----------------
Total investments..................................................... 28,142.2 29,455.1
Cash and cash equivalents................................................... 1,245.5 300.5
Deferred policy acquisition costs........................................... 3,563.8 3,236.6
Amounts due from discontinued operations.................................... 2.7 572.8
Other assets................................................................ 3,051.9 2,687.4
Closed Block assets......................................................... 8,632.4 8,566.6
Separate Accounts assets.................................................... 43,302.3 36,538.7
----------------- -----------------
Total Assets................................................................ $ 87,940.8 $ 81,357.7
================= =================
LIABILITIES
Policyholders' account balances............................................. $ 20,889.7 $ 21,579.5
Future policy benefits and other policyholders' liabilities................. 4,694.2 4,553.8
Short-term and long-term debt............................................... 1,181.7 1,716.7
Other liabilities........................................................... 3,474.3 3,267.2
Closed Block liabilities.................................................... 9,077.0 9,073.7
Separate Accounts liabilities............................................... 43,211.3 36,306.3
----------------- -----------------
Total liabilities..................................................... 82,528.2 76,497.2
----------------- -----------------
Commitments and contingencies (Notes 11, 13, 14, 15 and 16)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 3,110.2 3,105.8
Retained earnings........................................................... 1,944.1 1,235.9
Accumulated other comprehensive income...................................... 355.8 516.3
----------------- -----------------
Total shareholder's equity............................................ 5,412.6 4,860.5
----------------- -----------------
Total Liabilities and Shareholder's Equity.................................. $ 87,940.8 $ 81,357.7
================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 1,056.2 $ 950.6 $ 874.0
Premiums...................................................... 588.1 601.5 597.6
Net investment income......................................... 2,228.1 2,282.8 2,203.6
Investment gains (losses), net................................ 100.2 (45.2) (9.8)
Commissions, fees and other income............................ 1,503.0 1,227.2 1,081.8
Contribution from the Closed Block............................ 87.1 102.5 125.0
----------------- ----------------- -----------------
Total revenues.......................................... 5,562.7 5,119.4 4,872.2
----------------- ----------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,153.0 1,266.2 1,270.2
Policyholders' benefits....................................... 1,024.7 978.6 1,317.7
Other operating costs and expenses............................ 2,201.2 2,203.9 2,075.7
----------------- ----------------- -----------------
Total benefits and other deductions..................... 4,378.9 4,448.7 4,663.6
----------------- ----------------- -----------------
Earnings from continuing operations before Federal
income taxes, minority interest and cumulative
effect of accounting change................................. 1,183.8 670.7 208.6
Federal income taxes.......................................... 353.1 91.5 9.7
Minority interest in net income of consolidated subsidiaries.. 125.2 54.8 81.7
----------------- ----------------- -----------------
Earnings from continuing operations before cumulative
effect of accounting change................................. 705.5 524.4 117.2
Discontinued operations, net of Federal income taxes.......... 2.7 (87.2) (83.8)
Cumulative effect of accounting change, net of Federal
income taxes................................................ - - (23.1)
----------------- ----------------- -----------------
Net Earnings.................................................. $ 708.2 $ 437.2 $ 10.3
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
Common stock, at par value, beginning and end of year......... $ 2.5 $ 2.5 $ 2.5
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year............. 3,105.8 3,105.8 3,105.8
Additional capital in excess of par value..................... 4.4 - -
----------------- ----------------- -----------------
Capital in excess of par value, end of year................... 3,110.2 3,105.8 3,105.8
Retained earnings, beginning of year.......................... 1,235.9 798.7 788.4
Net earnings.................................................. 708.2 437.2 10.3
----------------- ----------------- -----------------
Retained earnings, end of year................................ 1,944.1 1,235.9 798.7
----------------- ----------------- -----------------
Accumulated other comprehensive income,
beginning of year........................................... 516.3 177.0 361.4
Other comprehensive income.................................... (160.5) 339.3 (184.4)
----------------- ----------------- -----------------
Accumulated other comprehensive income, end of year........... 355.8 516.3 177.0
----------------- ----------------- -----------------
Total Shareholder's Equity, End of Year....................... $ 5,412.6 $ 4,860.5 $ 4,084.0
================= ================= =================
COMPREHENSIVE INCOME
Net earnings.................................................. $ 708.2 $ 437.2 $ 10.3
----------------- ----------------- -----------------
Change in unrealized gains (losses), net of reclassification
adjustment.................................................. (149.5) 343.7 (206.6)
Minimum pension liability adjustment.......................... (11.0) (4.4) 22.2
----------------- ----------------- -----------------
Other comprehensive income.................................... (160.5) 339.3 (184.4)
----------------- ----------------- -----------------
Comprehensive Income.......................................... $ 547.7 $ 776.5 $ (174.1)
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
Net earnings.................................................. $ 708.2 $ 437.2 $ 10.3
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Interest credited to policyholders' account balances........ 1,153.0 1,266.2 1,270.2
Universal life and investment-type product
policy fee income......................................... (1,056.2) (950.6) (874.0)
Investment (gains) losses................................... (100.2) 45.2 9.8
Change in Federal income tax payable........................ 123.1 (74.4) (197.1)
Other, net.................................................. (324.9) 169.4 330.2
----------------- ----------------- -----------------
Net cash provided by operating activities..................... 503.0 893.0 549.4
----------------- ----------------- -----------------
Cash flows from investing activities:
Maturities and repayments................................... 2,289.0 2,702.9 2,275.1
Sales....................................................... 16,972.1 10,385.9 8,964.3
Purchases................................................... (18,578.5) (13,205.4) (12,559.6)
Decrease (increase) in short-term investments............... 102.4 (555.0) 450.3
Decrease in loans to discontinued operations................ 660.0 420.1 1,017.0
Sale of subsidiaries........................................ - 261.0 -
Other, net.................................................. (341.8) (612.6) (281.0)
----------------- ----------------- -----------------
Net cash provided (used) by investing activities.............. 1,103.2 (603.1) (133.9)
----------------- ----------------- -----------------
Cash flows from financing activities:
Policyholders' account balances:
Deposits.................................................. 1,508.1 1,281.7 1,925.4
Withdrawals............................................... (1,724.6) (1,886.8) (2,385.2)
Net (decrease) increase in short-term financings............ (243.5) 419.9 (.3)
Repayments of long-term debt................................ (24.5) (196.4) (124.8)
Payment of obligation to fund accumulated deficit of
discontinued operations................................... (87.2) (83.9) -
Other, net.................................................. (89.5) (62.7) (66.5)
----------------- ----------------- -----------------
Net cash used by financing activities......................... (661.2) (528.2) (651.4)
----------------- ----------------- -----------------
Change in cash and cash equivalents........................... 945.0 (238.3) (235.9)
Cash and cash equivalents, beginning of year.................. 300.5 538.8 774.7
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Year........................ $ 1,245.5 $ 300.5 $ 538.8
================= ================= =================
Supplemental cash flow information
Interest Paid............................................... $ 130.7 $ 217.1 $ 109.9
================= ================= =================
Income Taxes Paid (Refunded)................................ $ 254.3 $ 170.0 $ (10.0)
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") is a wholly owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). Equitable Life's insurance
business is conducted principally by Equitable Life and its wholly owned
life insurance subsidiaries, Equitable of Colorado ("EOC"), and, prior
to December 31, 1996, Equitable Variable Life Insurance Company
("EVLICO"). Effective January 1, 1997, EVLICO was merged into Equitable
Life, which continues to conduct the Company's insurance business.
Equitable Life's investment management business, which comprises the
Investment Services segment, is conducted principally by Alliance
Capital Management L.P. ("Alliance"), in which Equitable Life has a
57.7% ownership interest, and Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), an investment banking and brokerage affiliate in which
Equitable Life has a 32.5% ownership interest. AXA ("AXA"), a French
holding company for an international group of insurance and related
financial services companies, is the Holding Company's largest
shareholder, owning approximately 58.5% at December 31, 1998 (53.4% if
all securities convertible into, and options on, common stock were to be
converted or exercised).
The Insurance segment offers a variety of traditional, variable and
interest-sensitive life insurance products, disability income, annuity
products, mutual fund and other investment products to individuals and
small groups. It also administers traditional participating group
annuity contracts with conversion features, generally for corporate
qualified pension plans, and association plans which provide full
service retirement programs for individuals affiliated with professional
and trade associations. This segment includes Separate Accounts for
individual insurance and annuity products.
The Investment Services segment includes Alliance, the results of DLJ
which are accounted for on an equity basis, and, through June 10, 1997,
Equitable Real Estate Investment Management, Inc. ("EREIM"), a real
estate investment management subsidiary which was sold. Alliance
provides diversified investment fund management services to a variety of
institutional clients, including pension funds, endowments, and foreign
financial institutions, as well as to individual investors, principally
through a broad line of mutual funds. This segment includes
institutional Separate Accounts which provide various investment options
for large group pension clients, primarily deferred benefit contribution
plans, through pooled or single group accounts. DLJ's businesses include
securities underwriting, sales and trading, merchant banking, financial
advisory services, investment research, venture capital, correspondent
brokerage services, online interactive brokerage services and asset
management. DLJ serves institutional, corporate, governmental and
individual clients both domestically and internationally. EREIM provided
real estate investment management services, property management
services, mortgage servicing and loan asset management, and agricultural
investment management.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP") which
require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The accompanying consolidated financial statements include the accounts
of Equitable Life and its wholly owned life insurance subsidiary
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance and EREIM (see Note 5); and those partnerships and
joint ventures in which Equitable Life or its subsidiaries has control
F-6
<PAGE>
and a majority economic interest (collectively, including its
consolidated subsidiaries, the "Company"). The Company's investment in
DLJ is reported on the equity basis of accounting. Closed Block assets,
liabilities and results of operations are presented in the consolidated
financial statements as single line items (see Note 7). Unless
specifically stated, all other footnote disclosures contained herein
exclude the Closed Block related amounts.
All significant intercompany transactions and balances except those with
the Closed Block and discontinued operations (see Note 8) have been
eliminated in consolidation. The years "1998," "1997" and "1996" refer
to the years ended December 31, 1998, 1997 and 1996, respectively.
Certain reclassifications have been made in the amounts presented for
prior periods to conform these periods with the 1998 presentation.
Closed Block
On July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain individual participating policies which were in force
on that date. The assets allocated to the Closed Block, together with
anticipated revenues from policies included in the Closed Block, were
reasonably expected to be sufficient to support such business, including
provision for payment of claims, certain expenses and taxes, and for
continuation of dividend scales payable in 1991, assuming the experience
underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
Closed Block policyholders and will not revert to the benefit of the
Holding Company. No reallocation, transfer, borrowing or lending of
assets can be made between the Closed Block and other portions of
Equitable Life's General Account, any of its Separate Accounts or any
affiliate of Equitable Life without the approval of the New York
Superintendent of Insurance (the "Superintendent"). Closed Block assets
and liabilities are carried on the same basis as similar assets and
liabilities held in the General Account. The excess of Closed Block
liabilities over Closed Block assets represents the expected future
post-tax contribution from the Closed Block which would be recognized in
income over the period the policies and contracts in the Closed Block
remain in force.
Discontinued Operations
Discontinued operations include the Group Non-Participating Wind-Up
Annuities ("Wind-Up Annuities") and the Guaranteed Interest Contract
("GIC") lines of business. An allowance was established for the premium
deficiency reserve for Wind-Up Annuities and estimated future losses of
the GIC line of business. Management reviews the adequacy of the
allowance each quarter and believes the allowance for future losses at
December 31, 1998 is adequate to provide for all future losses; however,
the quarterly allowance review continues to involve numerous estimates
and subjective judgments regarding the expected performance of
Discontinued Operations Investment Assets. There can be no assurance the
losses provided for will not differ from the losses ultimately realized.
To the extent actual results or future projections of the discontinued
operations differ from management's current best estimates and
assumptions underlying the allowance for future losses, the difference
would be reflected in the consolidated statements of earnings in
discontinued operations. In particular, to the extent income, sales
proceeds and holding periods for equity real estate differ from
management's previous assumptions, periodic adjustments to the allowance
are likely to result (see Note 8).
Accounting Changes
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosures about Segments of an Enterprise and Related Information".
SFAS No. 131 establishes standards for public companies to report
information about operating segments in annual and interim financial
statements issued to shareholders. It also specifies related disclosure
requirements for products and services, geographic areas and major
customers. Generally, financial information must be reported using the
basis management uses to make operating decisions and to evaluate
business performance. The Company implemented SFAS No. 131 effective
December 31, 1998 and continues to identify two operating segments to
reflect its major businesses: Insurance and Investment Services. While
the segment descriptions are the same as those previously reported,
certain amounts have been reattributed between the two reportable
segments. Prior period comparative segment information has been
restated.
F-7
<PAGE>
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use,"
which requires capitalization of external and certain internal costs
incurred to obtain or develop internal-use computer software during the
application development stage. The Company applied the provisions of SOP
98-1 prospectively effective January 1, 1998. The adoption of SOP 98-1
did not have a material impact on the Company's consolidated financial
statements. Capitalized internal-use software is amortized on a
straight-line basis over the estimated useful life of the software.
The Company implemented SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," as of
January 1, 1996. SFAS No. 121 requires long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate the carrying value of such assets may
not be recoverable. Effective with SFAS No. 121's adoption, impaired
real estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Before implementing SFAS No.
121, valuation allowances on real estate held for the production of
income were computed using the forecasted cash flows of the respective
properties discounted at a rate equal to the Company's cost of funds.
Adoption of the statement resulted in the release of valuation
allowances of $152.4 million and recognition of impairment losses of
$144.0 million on real estate held for production of income. Real estate
which management intends to sell or abandon is classified as real estate
held for sale. Valuation allowances on real estate held for sale
continue to be computed using the lower of depreciated cost or estimated
fair value, net of disposition costs. Initial adoption of the impairment
requirements of SFAS No. 121 to other assets to be disposed of resulted
in a charge for the cumulative effect of an accounting change of $23.1
million, net of a Federal income tax benefit of $12.4 million, due to
the writedown to fair value of building improvements relating to
facilities vacated in 1996.
New Accounting Pronouncements
In October 1998, the FASB issued SFAS No. 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage
Loans Held for Sale by a Mortgage Banking Enterprise," which amends
existing accounting and reporting standards for certain activities of
mortgage banking enterprises and other enterprises that conduct
operations that are substantially similar to the primary operations of a
mortgage banking enterprise. This statement is effective for the first
fiscal quarter beginning after December 15, 1998. This statement is not
expected to have a material impact on the Company's consolidated
financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain
derivatives embedded in other contracts, and for hedging activities. It
requires all derivatives to be recognized on the balance sheet at fair
value. The accounting for changes in the fair value of a derivative
depends on its intended use. Derivatives not used in hedging activities
must be adjusted to fair value through earnings. Changes in the fair
value of derivatives used in hedging activities will, depending on the
nature of the hedge, either be offset in earnings against the change in
fair value of the hedged item attributable to the risk being hedged or
recognized in other comprehensive income until the hedged item affects
earnings. For all hedging activities, the ineffective portion of a
derivative's change in fair value will be immediately recognized in
earnings.
SFAS No. 133 requires adoption in fiscal years beginning after June 15,
1999 and permits early adoption as of the beginning of any fiscal
quarter following issuance of the statement. Retroactive application to
financial statements of prior periods is prohibited. The Company expects
to adopt SFAS No. 133 effective January 1, 2000. Adjustments resulting
from initial adoption of the new requirements will be reported in a
manner similar to the cumulative effect of a change in accounting
principle and will be reflected in net income or accumulated other
comprehensive income based upon existing hedging relationships, if any.
Management currently is assessing the impact of adoption. However,
Alliance's adoption is not expected to have a significant impact on the
Company's consolidated balance sheet or statement of earnings. Also,
since most of DLJ's derivatives are carried at fair values, the
Company's consolidated earnings and financial position are not expected
to be significantly affected by DLJ's adoption of the new requirements.
F-8
<PAGE>
In late 1998, the AICPA issued SOP 98-7, "Deposit Accounting: Accounting
for Insurance and Reinsurance Contracts that Do Not Transfer Insurance
Risk". This SOP, effective for fiscal years beginning after June 15,
1999, provides guidance to both the insured and insurer on how to apply
the deposit method of accounting when it is required for insurance and
reinsurance contracts that do not transfer insurance risk. The SOP does
not address or change the requirements as to when deposit accounting
should be applied. SOP 98-7 applies to all entities and all insurance
and reinsurance contracts that do not transfer insurance risk except for
long-duration life and health insurance contracts. This SOP is not
expected to have a material impact on the Company's consolidated
financial statements.
In December 1997, the AICPA issued SOP 97-3, "Accounting by Insurance
and Other Enterprises for Insurance-Related Assessments". SOP 97-3
provides guidance for assessments related to insurance activities and
requirements for disclosure of certain information. SOP 97-3 is
effective for financial statements issued for periods beginning after
December 31, 1998. Restatement of previously issued financial statements
is not required. SOP 97-3 is not expected to have a material impact on
the Company's consolidated financial statements.
Valuation of Investments
Fixed maturities identified as available for sale are reported at
estimated fair value. Fixed maturities, which the Company has both the
ability and the intent to hold to maturity, are stated principally at
amortized cost. The amortized cost of fixed maturities is adjusted for
impairments in value deemed to be other than temporary.
Valuation allowances are netted against the asset categories to which
they apply.
Mortgage loans on real estate are stated at unpaid principal balances,
net of unamortized discounts and valuation allowances. Valuation
allowances are based on the present value of expected future cash flows
discounted at the loan's original effective interest rate or the
collateral value if the loan is collateral dependent. However, if
foreclosure is or becomes probable, the measurement method used is
collateral value.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired
in satisfaction of debt is valued at estimated fair value. Impaired real
estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Valuation allowances on real
estate held for sale are computed using the lower of depreciated cost or
current estimated fair value, net of disposition costs. Depreciation is
discontinued on real estate held for sale. Prior to the adoption of SFAS
No. 121, valuation allowances on real estate held for production of
income were computed using the forecasted cash flows of the respective
properties discounted at a rate equal to the Company's cost of funds.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control or a majority economic interest are reported on the equity
basis of accounting and are included either with equity real estate or
other equity investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
F-9
<PAGE>
Cash and cash equivalents includes cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity
of three months or less.
All securities are recorded in the consolidated financial statements on
a trade date basis.
Net Investment Income, Investment Gains, Net and Unrealized Investment
Gains (Losses)
Net investment income and realized investment gains (losses)
(collectively, "investment results") related to certain participating
group annuity contracts which are passed through to the contractholders
are reflected as interest credited to policyholders' account balances.
Realized investment gains (losses) are determined by specific
identification and are presented as a component of revenue. Changes in
valuation allowances are included in investment gains (losses).
Unrealized investment gains and losses on equity securities and fixed
maturities available for sale held by the Company are accounted for as a
separate component of accumulated comprehensive income, net of related
deferred Federal income taxes, amounts attributable to discontinued
operations, participating group annuity contracts and deferred policy
acquisition costs ("DAC") related to universal life and investment-type
products and participating traditional life contracts.
Recognition of Insurance Income and Related Expenses
Premiums from universal life and investment-type contracts are reported
as deposits to policyholders' account balances. Revenues from these
contracts consist of amounts assessed during the period against
policyholders' account balances for mortality charges, policy
administration charges and surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the
period in excess of related policyholders' account balances.
Premiums from participating and non-participating traditional life and
annuity policies with life contingencies generally are recognized as
income when due. Benefits and expenses are matched with such income so
as to result in the recognition of profits over the life of the
contracts. This match is accomplished by means of the provision for
liabilities for future policy benefits and the deferral and subsequent
amortization of policy acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period
over which benefits are provided, premiums are recorded as income when
due with any excess profit deferred and recognized in income in a
constant relationship to insurance in force or, for annuities, the
amount of expected future benefit payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with
and are primarily related to the production of new business, are
deferred. DAC is subject to recoverability testing at the time of policy
issue and loss recognition testing at the end of each accounting period.
For universal life products and investment-type products, DAC is
amortized over the expected total life of the contract group (periods
ranging from 25 to 35 years and 5 to 17 years, respectively) as a
constant percentage of estimated gross profits arising principally from
investment results, mortality and expense margins and surrender charges
based on historical and anticipated future experience, updated at the
end of each accounting period. The effect on the amortization of DAC of
revisions to estimated gross profits is reflected in earnings in the
period such estimated gross profits are revised. The effect on the DAC
asset that would result from realization of unrealized gains (losses) is
recognized with an offset to accumulated other comprehensive income in
consolidated shareholder's equity as of the balance sheet date.
F-10
<PAGE>
For participating traditional life policies (substantially all of which
are in the Closed Block), DAC is amortized over the expected total life
of the contract group (40 years) as a constant percentage based on the
present value of the estimated gross margin amounts expected to be
realized over the life of the contracts using the expected investment
yield. At December 31, 1998, the expected investment yield, excluding
policy loans, generally ranged from 7.29% grading to 6.5% over a 20 year
period. Estimated gross margin includes anticipated premiums and
investment results less claims and administrative expenses, changes in
the net level premium reserve and expected annual policyholder
dividends. The effect on the amortization of DAC of revisions to
estimated gross margins is reflected in earnings in the period such
estimated gross margins are revised. The effect on the DAC asset that
would result from realization of unrealized gains (losses) is recognized
with an offset to accumulated comprehensive income in consolidated
shareholder's equity as of the balance sheet date.
For non-participating traditional life and annuity policies with life
contingencies, DAC is amortized in proportion to anticipated premiums.
Assumptions as to anticipated premiums are estimated at the date of
policy issue and are consistently applied during the life of the
contracts. Deviations from estimated experience are reflected in
earnings in the period such deviations occur. For these contracts, the
amortization periods generally are for the total life of the policy.
For individual health benefit insurance, DAC is amortized over the
expected average life of the contracts (10 years for major medical
policies and 20 years for disability income ("DI") products) in
proportion to anticipated premium revenue at time of issue.
Policyholders' Account Balances and Future Policy Benefits
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account
values represents an accumulation of gross premium payments plus
credited interest less expense and mortality charges and withdrawals.
For participating traditional life policies, future policy benefit
liabilities are calculated using a net level premium method on the basis
of actuarial assumptions equal to guaranteed mortality and dividend fund
interest rates. The liability for annual dividends represents the
accrual of annual dividends earned. Terminal dividends are accrued in
proportion to gross margins over the life of the contract.
For non-participating traditional life insurance policies, future policy
benefit liabilities are estimated using a net level premium method on
the basis of actuarial assumptions as to mortality, persistency and
interest established at policy issue. Assumptions established at policy
issue as to mortality and persistency are based on the Insurance Group's
experience which, together with interest and expense assumptions,
includes a margin for adverse deviation. When the liabilities for future
policy benefits plus the present value of expected future gross premiums
for a product are insufficient to provide for expected future policy
benefits and expenses for that product, DAC is written off and
thereafter, if required, a premium deficiency reserve is established by
a charge to earnings. Benefit liabilities for traditional annuities
during the accumulation period are equal to accumulated contractholders'
fund balances and after annuitization are equal to the present value of
expected future payments. Interest rates used in establishing such
liabilities range from 2.25% to 11.5% for life insurance liabilities and
from 2.25% to 13.5% for annuity liabilities.
During the fourth quarter of 1996 a loss recognition study of
participating group annuity contracts and conversion annuities ("Pension
Par") was completed which included management's revised estimate of
assumptions, such as expected mortality and future investment returns.
The study's results prompted management to establish a premium
deficiency reserve which decreased earnings from continuing operations
and net earnings by $47.5 million ($73.0 million pre-tax).
Individual health benefit liabilities for active lives are estimated
using the net level premium method and assumptions as to future
morbidity, withdrawals and interest. Benefit liabilities for disabled
lives are estimated using the present value of benefits method and
experience assumptions as to claim terminations, expenses and interest.
F-11
<PAGE>
During the fourth quarter of 1996, the Company completed a loss
recognition study of the DI business which incorporated management's
revised estimates of future experience with regard to morbidity,
investment returns, claims and administration expenses and other
factors. The study indicated DAC was not recoverable and the reserves
were not sufficient. Earnings from continuing operations and net
earnings decreased by $208.0 million ($320.0 million pre-tax) as a
result of strengthening DI reserves by $175.0 million and writing off
unamortized DAC of $145.0 million related to DI products issued prior to
July 1993. The determination of DI reserves requires making assumptions
and estimates relating to a variety of factors, including morbidity and
interest rates, claims experience and lapse rates based on then known
facts and circumstances. Such factors as claim incidence and termination
rates can be affected by changes in the economic, legal and regulatory
environments and work ethic. While management believes its Pension Par
and DI reserves have been calculated on a reasonable basis and are
adequate, there can be no assurance reserves will be sufficient to
provide for future liabilities.
Claim reserves and associated liabilities for individual DI and major
medical policies were $938.6 million and $886.7 million at December 31,
1998 and 1997, respectively. Incurred benefits (benefits paid plus
changes in claim reserves) and benefits paid for individual DI and major
medical policies (excluding reserve strengthening in 1996) are
summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 202.1 $ 190.2 $ 189.0
Incurred benefits related to prior years........... 22.2 2.1 69.1
----------------- ---------------- -----------------
Total Incurred Benefits............................ $ 224.3 $ 192.3 $ 258.1
================= ================ =================
Benefits paid related to current year.............. $ 17.0 $ 28.8 $ 32.6
Benefits paid related to prior years............... 155.4 146.2 153.3
----------------- ---------------- -----------------
Total Benefits Paid................................ $ 172.4 $ 175.0 $ 185.9
================= ================ =================
</TABLE>
Policyholders' Dividends
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by
Equitable Life's board of directors. The aggregate amount of
policyholders' dividends is related to actual interest, mortality,
morbidity and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by Equitable Life.
At December 31, 1998, participating policies, including those in the
Closed Block, represent approximately 19.9% ($49.3 billion) of directly
written life insurance in force, net of amounts ceded.
Federal Income Taxes
The Company files a consolidated Federal income tax return with the
Holding Company and its consolidated subsidiaries. Current Federal
income taxes are charged or credited to operations based upon amounts
estimated to be payable or recoverable as a result of taxable operations
for the current year. Deferred income tax assets and liabilities are
recognized based on the difference between financial statement carrying
amounts and income tax bases of assets and liabilities using enacted
income tax rates and laws.
Separate Accounts
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that
arise from any other business of the Insurance Group. Separate Accounts
assets are subject to General Account claims only to the extent the
value of such assets exceeds Separate Accounts liabilities.
F-12
<PAGE>
Assets and liabilities of the Separate Accounts, representing net
deposits and accumulated net investment earnings less fees, held
primarily for the benefit of contractholders, and for which the
Insurance Group does not bear the investment risk, are shown as separate
captions in the consolidated balance sheets. The Insurance Group bears
the investment risk on assets held in one Separate Account; therefore,
such assets are carried on the same basis as similar assets held in the
General Account portfolio. Assets held in the other Separate Accounts
are carried at quoted market values or, where quoted values are not
available, at estimated fair values as determined by the Insurance
Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate
Accounts liabilities. For 1998, 1997 and 1996, investment results of
such Separate Accounts were $4,591.0 million, $3,411.1 million and
$2,970.6 million, respectively.
Deposits to Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are
included in revenues.
Employee Stock Option Plan
The Company accounts for stock option plans sponsored by the Holding
Company, DLJ and Alliance in accordance with the provisions of
Accounting Principles Board Opinion ("APB") No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. In accordance
with the Statement, compensation expense is recorded on the date of
grant only if the current market price of the underlying stock exceeds
the option price. See Note 22 for the pro forma disclosures for the
Holding Company, DLJ and Alliance required by SFAS No. 123, "Accounting
for Stock-Based Compensation".
F-13
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
----------------- ----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C> <C>
December 31, 1998
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,520.8 $ 793.6 $ 379.6 $ 14,934.8
Mortgage-backed.................... 1,807.9 23.3 .9 1,830.3
U.S. Treasury securities and
U.S. government and
agency securities................ 1,464.1 107.6 .7 1,571.0
States and political subdivisions.. 55.0 9.9 - 64.9
Foreign governments................ 363.3 20.9 30.0 354.2
Redeemable preferred stock......... 242.7 7.0 11.2 238.5
----------------- ----------------- ---------------- -----------------
Total Available for Sale............... $ 18,453.8 $ 962.3 $ 422.4 $ 18,993.7
================= ================= ================ =================
Held to Maturity: Corporate......... $ 125.0 $ - $ - $ 125.0
================= ================= ================ =================
Equity Securities:
Common stock......................... $ 58.3 $ 114.9 $ 22.5 $ 150.7
================= ================= ================ =================
December 31, 1997
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,850.5 $ 785.0 $ 74.5 $ 15,561.0
Mortgage-backed.................... 1,702.8 23.5 1.3 1,725.0
U.S. Treasury securities and
U.S. government and
agency securities................ 1,583.2 83.9 .6 1,666.5
States and political subdivisions.. 52.8 6.8 .1 59.5
Foreign governments................ 442.4 44.8 2.0 485.2
Redeemable preferred stock......... 128.0 6.7 1.0 133.7
----------------- ----------------- ---------------- -----------------
Total Available for Sale............... $ 18,759.7 $ 950.7 $ 79.5 $ 19,630.9
================= ================= ================ =================
Equity Securities:
Common stock......................... $ 408.4 $ 48.7 $ 15.0 $ 442.1
================= ================= ================ =================
</TABLE>
For publicly traded fixed maturities and equity securities, estimated
fair value is determined using quoted market prices. For fixed
maturities without a readily ascertainable market value, the Company
determines an estimated fair value using a discounted cash flow
approach, including provisions for credit risk, generally based on the
assumption such securities will be held to maturity. Estimated fair
values for equity securities, substantially all of which do not have a
readily ascertainable market value, have been determined by the Company.
Such estimated fair values do not necessarily represent the values for
which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1998 and 1997, securities
without a readily ascertainable market value having an amortized cost of
$3,539.9 million and $3,759.2 million, respectively, had estimated fair
values of $3,748.5 million and $3,903.9 million, respectively.
F-14
<PAGE>
The contractual maturity of bonds at December 31, 1998 is shown below:
<TABLE>
<CAPTION>
Available for Sale
------------------------------------
Amortized Estimated
Cost Fair Value
---------------- -----------------
(In Millions)
<S> <C> <C>
Due in one year or less................................................ $ 324.8 $ 323.4
Due in years two through five.......................................... 3,778.2 3,787.9
Due in years six through ten........................................... 6,543.4 6,594.1
Due after ten years.................................................... 5,756.8 6,219.5
Mortgage-backed securities............................................. 1,807.9 1,830.3
---------------- -----------------
Total.................................................................. $ 18,211.1 $ 18,755.2
================ =================
</TABLE>
Corporate bonds held to maturity with an amortized cost and estimated
fair value of $125.0 million are due in one year or less.
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher
than normal credit risks associated with such securities by monitoring
concentrations in any single issuer or a particular industry group.
Certain of these corporate high yield securities are classified as other
than investment grade by the various rating agencies, i.e., a rating
below Baa or National Association of Insurance Commissioners ("NAIC")
designation of 3 (medium grade), 4 or 5 (below investment grade) or 6
(in or near default). At December 31, 1998, approximately 15.1% of the
$18,336.1 million aggregate amortized cost of bonds held by the Company
was considered to be other than investment grade.
In addition, the Insurance Group is an equity investor in limited
partnership interests which primarily invest in securities considered to
be other than investment grade.
Fixed maturity investments with restructured or modified terms are not
material.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 384.5 $ 137.1 $ 325.3
SFAS No. 121 release............................... - - (152.4)
Additions charged to income........................ 86.2 334.6 125.0
Deductions for writedowns and
asset dispositions............................... (240.1) (87.2) (160.8)
----------------- ---------------- -----------------
Balances, End of Year.............................. $ 230.6 $ 384.5 $ 137.1
================= ================ =================
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 34.3 $ 55.8 $ 50.4
Equity real estate............................... 196.3 328.7 86.7
----------------- ---------------- -----------------
Total.............................................. $ 230.6 $ 384.5 $ 137.1
================= ================ =================
</TABLE>
F-15
<PAGE>
At December 31, 1998, the carrying value of fixed maturities which are
non-income producing for the twelve months preceding the consolidated
balance sheet date was $60.8 million.
At December 31, 1998 and 1997, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more
past due or in foreclosure (collectively, "problem mortgage loans on
real estate") had an amortized cost of $7.0 million (0.2% of total
mortgage loans on real estate) and $23.4 million (0.9% of total mortgage
loans on real estate), respectively.
The payment terms of mortgage loans on real estate may from time to time
be restructured or modified. The investment in restructured mortgage
loans on real estate, based on amortized cost, amounted to $115.1
million and $183.4 million at December 31, 1998 and 1997, respectively.
Gross interest income on restructured mortgage loans on real estate that
would have been recorded in accordance with the original terms of such
loans amounted to $10.3 million, $17.2 million and $35.5 million in
1998, 1997 and 1996, respectively. Gross interest income on these loans
included in net investment income aggregated $8.3 million, $12.7 million
and $28.2 million in 1998, 1997 and 1996, respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------------------
1998 1997
------------------- -------------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses.................. $ 125.4 $ 196.7
Impaired mortgage loans without provision for losses............... 8.6 3.6
------------------- -------------------
Recorded investment in impaired mortgage loans..................... 134.0 200.3
Provision for losses............................................... (29.0) (51.8)
------------------- -------------------
Net Impaired Mortgage Loans........................................ $ 105.0 $ 148.5
=================== ===================
</TABLE>
Impaired mortgage loans without provision for losses are loans where the
fair value of the collateral or the net present value of the expected
future cash flows related to the loan equals or exceeds the recorded
investment. Interest income earned on loans where the collateral value
is used to measure impairment is recorded on a cash basis. Interest
income on loans where the present value method is used to measure
impairment is accrued on the net carrying value amount of the loan at
the interest rate used to discount the cash flows. Changes in the
present value attributable to changes in the amount or timing of
expected cash flows are reported as investment gains or losses.
During 1998, 1997 and 1996, respectively, the Company's average recorded
investment in impaired mortgage loans was $161.3 million, $246.9 million
and $552.1 million. Interest income recognized on these impaired
mortgage loans totaled $12.3 million, $15.2 million and $38.8 million
($.9 million, $2.3 million and $17.9 million recognized on a cash basis)
for 1998, 1997 and 1996, respectively.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1998 and 1997, the carrying value of equity real estate
held for sale amounted to $836.2 million and $1,023.5 million,
respectively. For 1998, 1997 and 1996, respectively, real estate of $7.1
million, $152.0 million and $58.7 million was acquired in satisfaction
of debt. At December 31, 1998 and 1997, the Company owned $552.3 million
and $693.3 million, respectively, of real estate acquired in
satisfaction of debt.
Depreciation of real estate held for production of income is computed
using the straight-line method over the estimated useful lives of the
properties, which generally range from 40 to 50 years. Accumulated
depreciation on real estate was $374.8 million and $541.1 million at
December 31, 1998 and 1997, respectively. Depreciation expense on real
estate totaled $30.5 million, $74.9 million and $91.8 million for 1998,
1997 and 1996, respectively.
F-16
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information for real estate joint ventures
(25 and 29 individual ventures as of December 31, 1998 and 1997,
respectively) and for limited partnership interests accounted for under
the equity method, in which the Company has an investment of $10.0
million or greater and an equity interest of 10% or greater, is as
follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
BALANCE SHEETS
Investments in real estate, at depreciated cost........................ $ 913.7 $ 1,700.9
Investments in securities, generally at estimated fair value........... 636.9 1,374.8
Cash and cash equivalents.............................................. 85.9 105.4
Other assets........................................................... 279.8 584.9
---------------- -----------------
Total Assets........................................................... $ 1,916.3 $ 3,766.0
================ =================
Borrowed funds - third party........................................... $ 367.1 $ 493.4
Borrowed funds - the Company........................................... 30.1 31.2
Other liabilities...................................................... 197.2 284.0
---------------- -----------------
Total liabilities...................................................... 594.4 808.6
---------------- -----------------
Partners' capital...................................................... 1,321.9 2,957.4
---------------- -----------------
Total Liabilities and Partners' Capital................................ $ 1,916.3 $ 3,766.0
================ =================
Equity in partners' capital included above............................. $ 312.9 $ 568.5
Equity in limited partnership interests not included above............. 442.1 331.8
Other.................................................................. .7 4.3
---------------- -----------------
Carrying Value......................................................... $ 755.7 $ 904.6
================ =================
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 246.1 $ 310.5 $ 348.9
Revenues of other limited partnership interests.... 128.9 506.3 386.1
Interest expense - third party..................... (33.3) (91.8) (111.0)
Interest expense - the Company..................... (2.6) (7.2) (30.0)
Other expenses..................................... (197.0) (263.6) (282.5)
----------------- ---------------- -----------------
Net Earnings....................................... $ 142.1 $ 454.2 $ 311.5
================= ================ =================
Equity in net earnings included above.............. $ 59.6 $ 76.7 $ 73.9
Equity in net earnings of limited partnership
interests not included above..................... 22.7 69.5 35.8
Other.............................................. - (.9) .9
----------------- ---------------- -----------------
Total Equity in Net Earnings....................... $ 82.3 $ 145.3 $ 110.6
================= ================ =================
</TABLE>
F-17
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,489.0 $ 1,459.4 $ 1,307.4
Mortgage loans on real estate...................... 235.4 260.8 303.0
Equity real estate................................. 356.1 390.4 442.4
Other equity investments........................... 83.8 156.9 122.0
Policy loans....................................... 144.9 177.0 160.3
Other investment income............................ 185.7 181.7 217.4
----------------- ---------------- -----------------
Gross investment income.......................... 2,494.9 2,626.2 2,552.5
Investment expenses.............................. (266.8) (343.4) (348.9)
----------------- ---------------- -----------------
Net Investment Income.............................. $ 2,228.1 $ 2,282.8 $ 2,203.6
================= ================ =================
</TABLE>
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Fixed maturities................................... $ (24.3) $ 88.1 $ 60.5
Mortgage loans on real estate...................... (10.9) (11.2) (27.3)
Equity real estate................................. 74.5 (391.3) (79.7)
Other equity investments........................... 29.9 14.1 18.9
Sale of subsidiaries............................... (2.6) 252.1 -
Issuance and sales of Alliance Units............... 19.8 - 20.6
Issuance and sale of DLJ common stock.............. 18.2 3.0 -
Other.............................................. (4.4) - (2.8)
----------------- ---------------- -----------------
Investment Gains (Losses), Net..................... $ 100.2 $ (45.2) $ (9.8)
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $101.6 million, $11.7 million
and $29.9 million for 1998, 1997 and 1996, respectively, and writedowns
of equity real estate subsequent to the adoption of SFAS No. 121
amounted to $136.4 million for 1997. In the fourth quarter of 1997, the
Company reclassified $1,095.4 million depreciated cost of equity real
estate from real estate held for the production of income to real estate
held for sale. Additions to valuation allowances of $227.6 million were
recorded upon these transfers. Additionally, in fourth quarter 1997,
$132.3 million of writedowns on real estate held for production of
income were recorded.
For 1998, 1997 and 1996, respectively, proceeds received on sales of
fixed maturities classified as available for sale amounted to $15,961.0
million, $9,789.7 million and $8,353.5 million. Gross gains of $149.3
million, $166.0 million and $154.2 million and gross losses of $95.1
million, $108.8 million and $92.7 million, respectively, were realized
on these sales. The change in unrealized investment gains (losses)
related to fixed maturities classified as available for sale for 1998,
1997 and 1996 amounted to $(331.7) million, $513.4 million and $(258.0)
million, respectively.
For 1998, 1997 and 1996, investment results passed through to certain
participating group annuity contracts as interest credited to
policyholders' account balances amounted to $136.9 million, $137.5
million and $136.7 million, respectively.
F-18
<PAGE>
On June 10, 1997, Equitable Life sold EREIM (other than its interest in
Column Financial, Inc.) ("ERE") to Lend Lease Corporation Limited ("Lend
Lease"), a publicly traded, international property and financial
services company based in Sydney, Australia. The total purchase price
was $400.0 million and consisted of $300.0 million in cash and a $100.0
million note which was paid in 1998. The Company recognized an
investment gain of $162.4 million, net of Federal income tax of $87.4
million as a result of this transaction. Equitable Life entered into
long-term advisory agreements whereby ERE continues to provide
substantially the same services to Equitable Life's General Account and
Separate Accounts, for substantially the same fees, as provided prior to
the sale.
Through June 10, 1997 and for the year ended December 31, 1996,
respectively, the businesses sold reported combined revenues of $91.6
million and $226.1 million and combined net earnings of $10.7 million
and $30.7 million.
In 1996, Alliance acquired the business of Cursitor Holdings L.P. and
Cursitor Holdings Limited (collectively, "Cursitor") for approximately
$159.0 million. The purchase price consisted of $94.3 million in cash,
1.8 million of Alliance's publicly traded units ("Alliance Units"), 6%
notes aggregating $21.5 million payable ratably over four years, and
additional consideration to be determined at a later date but currently
estimated to not exceed $10.0 million. The excess of the purchase price,
including acquisition costs and minority interest, over the fair value
of Cursitor's net assets acquired resulted in the recognition of
intangible assets consisting of costs assigned to contracts acquired and
goodwill of approximately $122.8 million and $38.3 million,
respectively. The Company recognized an investment gain of $20.6 million
as a result of the issuance of Alliance Units in this transaction. On
June 30, 1997, Alliance reduced the recorded value of goodwill and
contracts associated with Alliance's acquisition of Cursitor by $120.9
million. This charge reflected Alliance's view that Cursitor's
continuing decline in assets under management and its reduced
profitability, resulting from relative investment underperformance, no
longer supported the carrying value of its investment. As a result, the
Company's earnings from continuing operations before cumulative effect
of accounting change for 1997 included a charge of $59.5 million, net of
a Federal income tax benefit of $10.0 million and minority interest of
$51.4 million. The remaining balance of intangible assets is being
amortized over its estimated useful life of 20 years. At December 31,
1998, the Company's ownership of Alliance Units was approximately 56.7%.
F-19
<PAGE>
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of accumulated comprehensive income and
the changes for the corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Balance, beginning of year......................... $ 533.6 $ 189.9 $ 396.5
Changes in unrealized investment gains (losses).... (242.4) 543.3 (297.6)
Changes in unrealized investment losses
(gains) attributable to:
Participating group annuity contracts.......... (5.7) 53.2 -
DAC............................................ 13.2 (89.0) 42.3
Deferred Federal income taxes.................. 85.4 (163.8) 48.7
----------------- ---------------- -----------------
Balance, End of Year............................... $ 384.1 $ 533.6 $ 189.9
================= ================ =================
Balance, end of year comprises:
Unrealized investment gains on:
Fixed maturities............................... $ 539.9 $ 871.2 $ 357.8
Other equity investments....................... 92.4 33.7 31.6
Other, principally Closed Block................ 111.1 80.9 53.1
----------------- ---------------- -----------------
Total........................................ 743.4 985.8 442.5
Amounts of unrealized investment gains
attributable to:
Participating group annuity contracts........ (24.7) (19.0) (72.2)
DAC.......................................... (127.8) (141.0) (52.0)
Deferred Federal income taxes................ (206.8) (292.2) (128.4)
----------------- ---------------- -----------------
Total.............................................. $ 384.1 $ 533.6 $ 189.9
================= ================ =================
</TABLE>
6) ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income represents cumulative gains and
losses on items that are not reflected in earnings. The balances for the
years 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Unrealized gains on investments.................... $ 384.1 $ 533.6 $ 189.9
Minimum pension liability.......................... (28.3) (17.3) (12.9)
----------------- ---------------- -----------------
Total Accumulated Other
Comprehensive Income............................. $ 355.8 $ 516.3 $ 177.0
================= ================ =================
</TABLE>
F-20
<PAGE>
The components of other comprehensive income for the years 1998, 1997
and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Net unrealized gains (losses) on investment
securities:
Net unrealized gains (losses) arising during
the period..................................... $ (186.1) $ 564.0 $ (249.8)
Reclassification adjustment for (gains) losses
included in net earnings....................... (56.3) (20.7) (47.8)
----------------- ---------------- -----------------
Net unrealized gains (losses) on investment
securities....................................... (242.4) 543.3 (297.6)
Adjustments for policyholder liabilities,
DAC and deferred
Federal income taxes............................. 92.9 (199.6) 91.0
----------------- ---------------- -----------------
Change in unrealized gains (losses), net of
reclassification and adjustments................. (149.5) 343.7 (206.6)
Change in minimum pension liability................ (11.0) (4.4) 22.2
----------------- ---------------- -----------------
Total Other Comprehensive Income................... $ (160.5) $ 339.3 $ (184.4)
================= ================ =================
</TABLE>
7) CLOSED BLOCK
Summarized financial information for the Closed Block follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$4,149.0 and $4,059.4)........................................... $ 4,373.2 $ 4,231.0
Mortgage loans on real estate........................................ 1,633.4 1,341.6
Policy loans......................................................... 1,641.2 1,700.2
Cash and other invested assets....................................... 86.5 282.0
DAC.................................................................. 676.5 775.2
Other assets......................................................... 221.6 236.6
----------------- -----------------
Total Assets......................................................... $ 8,632.4 $ 8,566.6
================= =================
Liabilities
Future policy benefits and policyholders' account balances........... $ 9,013.1 $ 8,993.2
Other liabilities.................................................... 63.9 80.5
----------------- -----------------
Total Liabilities.................................................... $ 9,077.0 $ 9,073.7
================= =================
</TABLE>
F-21
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Revenues
Premiums and other revenue......................... $ 661.7 $ 687.1 $ 724.8
Investment income (net of investment
expenses of $15.5, $27.0 and $27.3).............. 569.7 574.9 546.6
Investment losses, net............................. .5 (42.4) (5.5)
----------------- ---------------- -----------------
Total revenues............................... 1,231.9 1,219.6 1,265.9
----------------- ---------------- -----------------
Benefits and Other Deductions
Policyholders' benefits and dividends.............. 1,082.0 1,066.7 1,106.3
Other operating costs and expenses................. 62.8 50.4 34.6
----------------- ---------------- -----------------
Total benefits and other deductions.......... 1,144.8 1,117.1 1,140.9
----------------- ---------------- -----------------
Contribution from the Closed Block................. $ 87.1 $ 102.5 $ 125.0
================= ================ =================
</TABLE>
At December 31, 1998 and 1997, problem mortgage loans on real estate had
an amortized cost of $5.1 million and $8.1 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had an amortized cost of $26.0 million and $70.5 million,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 55.5 $ 109.1
Impaired mortgage loans without provision for losses................... 7.6 .6
---------------- -----------------
Recorded investment in impaired mortgages.............................. 63.1 109.7
Provision for losses................................................... (10.1) (17.4)
---------------- -----------------
Net Impaired Mortgage Loans............................................ $ 53.0 $ 92.3
================ =================
</TABLE>
During 1998, 1997 and 1996, the Closed Block's average recorded
investment in impaired mortgage loans was $85.5 million, $110.2 million
and $153.8 million, respectively. Interest income recognized on these
impaired mortgage loans totaled $4.7 million, $9.4 million and $10.9
million ($1.5 million, $4.1 million and $4.7 million recognized on a
cash basis) for 1998, 1997 and 1996, respectively.
Valuation allowances amounted to $11.1 million and $18.5 million on
mortgage loans on real estate and $15.4 million and $16.8 million on
equity real estate at December 31, 1998 and 1997, respectively. As of
January 1, 1996, the adoption of SFAS No. 121 resulted in the
recognition of impairment losses of $5.6 million on real estate held for
production of income. Writedowns of fixed maturities amounted to $3.5
million and $12.8 million for 1997 and 1996, respectively. Writedowns of
equity real estate subsequent to the adoption of SFAS No. 121 amounted
to $28.8 million for 1997.
In the fourth quarter of 1997, $72.9 million depreciated cost of equity
real estate held for production of income was reclassified to equity
real estate held for sale. Additions to valuation allowances of $15.4
million were recorded upon these transfers. Additionally, in fourth
quarter 1997, $28.8 million of writedowns on real estate held for
production of income were recorded.
Many expenses related to Closed Block operations are charged to
operations outside of the Closed Block; accordingly, the contribution
from the Closed Block does not represent the actual profitability of the
Closed Block operations. Operating costs and expenses outside of the
Closed Block are, therefore, disproportionate to the business outside of
the Closed Block.
F-22
<PAGE>
8) DISCONTINUED OPERATIONS
Summarized financial information for discontinued operations follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Assets
Mortgage loans on real estate........................................ $ 553.9 $ 635.2
Equity real estate................................................... 611.0 874.5
Other equity investments............................................. 115.1 209.3
Other invested assets................................................ 24.9 152.4
----------------- -----------------
Total investments.................................................. 1,304.9 1,871.4
Cash and cash equivalents............................................ 34.7 106.8
Other assets......................................................... 219.0 243.8
----------------- -----------------
Total Assets......................................................... $ 1,558.6 $ 2,222.0
================= =================
Liabilities
Policyholders' liabilities........................................... $ 1,021.7 $ 1,048.3
Allowance for future losses.......................................... 305.1 259.2
Amounts due to continuing operations................................. 2.7 572.8
Other liabilities.................................................... 229.1 341.7
----------------- -----------------
Total Liabilities.................................................... $ 1,558.6 $ 2,222.0
================= =================
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Revenues
Investment income (net of investment
expenses of $63.3, $97.3 and $127.5)............. $ 160.4 $ 188.6 $ 245.4
Investment gains (losses), net..................... 35.7 (173.7) (18.9)
Policy fees, premiums and other income............. (4.3) .2 .2
----------------- ---------------- -----------------
Total revenues..................................... 191.8 15.1 226.7
Benefits and other deductions...................... 141.5 169.5 250.4
Earnings added (losses charged) to allowance
for future losses................................ 50.3 (154.4) (23.7)
----------------- ---------------- -----------------
Pre-tax loss from operations....................... - - -
Pre-tax earnings from releasing (loss from
strengthening) of the allowance for future
losses........................................... 4.2 (134.1) (129.0)
Federal income tax (expense) benefit............... (1.5) 46.9 45.2
----------------- ---------------- -----------------
Earnings (Loss) from Discontinued Operations....... $ 2.7 $ (87.2) $ (83.8)
================= ================ =================
</TABLE>
The Company's quarterly process for evaluating the allowance for future
losses applies the current period's results of the discontinued
operations against the allowance, re-estimates future losses and adjusts
the allowance, if appropriate. Additionally, as part of the Company's
annual planning process which takes place in the fourth quarter of each
year, investment and benefit cash flow projections are prepared. These
updated assumptions and estimates resulted in a release of allowance in
1998 and strengthening of allowance in 1997 and 1996.
F-23
<PAGE>
In the fourth quarter of 1997, $329.9 million depreciated cost of equity
real estate was reclassified from equity real estate held for production
of income to real estate held for sale. Additions to valuation
allowances of $79.8 million were recognized upon these transfers.
Additionally, in fourth quarter 1997, $92.5 million of writedowns on
real estate held for production of income were recognized.
Benefits and other deductions includes $26.6 million, $53.3 million and
$114.3 million of interest expense related to amounts borrowed from
continuing operations in 1998, 1997 and 1996, respectively.
Valuation allowances amounted to $3.0 million and $28.4 million on
mortgage loans on real estate and $34.8 million and $88.4 million on
equity real estate at December 31, 1998 and 1997, respectively. As of
January 1, 1996, the adoption of SFAS No. 121 resulted in a release of
existing valuation allowances of $71.9 million on equity real estate and
recognition of impairment losses of $69.8 million on real estate held
for production of income. Writedowns of equity real estate subsequent to
the adoption of SFAS No. 121 amounted to $95.7 million and $12.3 million
for 1997 and 1996, respectively.
At December 31, 1998 and 1997, problem mortgage loans on real estate had
amortized costs of $1.1 million and $11.0 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had amortized costs of $3.5 million and $109.4 million,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 6.7 $ 101.8
Impaired mortgage loans without provision for losses................... 8.5 .2
---------------- -----------------
Recorded investment in impaired mortgages.............................. 15.2 102.0
Provision for losses................................................... (2.1) (27.3)
---------------- -----------------
Net Impaired Mortgage Loans............................................ $ 13.1 $ 74.7
================ =================
</TABLE>
During 1998, 1997 and 1996, the discontinued operations' average
recorded investment in impaired mortgage loans was $73.3 million, $89.2
million and $134.8 million, respectively. Interest income recognized on
these impaired mortgage loans totaled $4.7 million, $6.6 million and
$10.1 million ($3.4 million, $5.3 million and $7.5 million recognized on
a cash basis) for 1998, 1997 and 1996, respectively.
At December 31, 1998 and 1997, discontinued operations had carrying
values of $50.0 million and $156.2 million, respectively, of real estate
acquired in satisfaction of debt.
F-24
<PAGE>
9) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Short-term debt...................................................... $ 179.3 $ 422.2
----------------- -----------------
Long-term debt:
Equitable Life:
6.95% surplus notes scheduled to mature 2005....................... 399.4 399.4
7.70% surplus notes scheduled to mature 2015....................... 199.7 199.7
Other.............................................................. .3 .3
----------------- -----------------
Total Equitable Life........................................... 599.4 599.4
----------------- -----------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 5.91% - 12.00%, due through 2017................... 392.2 676.6
----------------- -----------------
Alliance:
Other.............................................................. 10.8 18.5
----------------- -----------------
Total long-term debt................................................. 1,002.4 1,294.5
----------------- -----------------
Total Short-term and Long-term Debt.................................. $ 1,181.7 $ 1,716.7
================= =================
</TABLE>
Short-term Debt
Equitable Life has a $350.0 million bank credit facility available to
fund short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of
borrowing options with varying interest rates and expires in September
2000. The interest rates are based on external indices dependent on the
type of borrowing and at December 31, 1998 range from 5.23% to 7.75%.
There were no borrowings outstanding under this bank credit facility at
December 31, 1998.
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate purposes
used to support Equitable Life's liquidity needs and is supported by
Equitable Life's existing $350.0 million bank credit facility. At
December 31, 1998, there were no borrowings outstanding under this
program.
During July 1998, Alliance entered into a $425.0 million five-year
revolving credit facility with a group of commercial banks which
replaced a $250.0 million revolving credit facility. Under the facility,
the interest rate, at the option of Alliance, is a floating rate
generally based upon a defined prime rate, a rate related to the London
Interbank Offered Rate ("LIBOR") or the Federal Funds Rate. A facility
fee is payable on the total facility. During September 1998, Alliance
increased the size of its commercial paper program from $250.0 million
to $425.0 million. Borrowings from these two sources may not exceed
$425.0 million in the aggregate. The revolving credit facility provides
backup liquidity for commercial paper issued under Alliance's commercial
paper program and can be used as a direct source of borrowing. The
revolving credit facility contains covenants which require Alliance to,
among other things, meet certain financial ratios. As of December 31,
1998, Alliance had commercial paper outstanding totaling $179.5 million
at an effective interest rate of 5.5% and there were no borrowings
outstanding under Alliance's revolving credit facility.
Long-term Debt
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other
matters. The Company is in compliance with all debt covenants.
F-25
<PAGE>
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $640.2 million and $1,164.0 million at December 31, 1998
and 1997, respectively, as collateral for certain short-term and
long-term debt.
At December 31, 1998, aggregate maturities of the long-term debt based
on required principal payments at maturity for 1999 and the succeeding
four years are $322.8 million, $6.9 million, $1.7 million, $1.8 million
and $2.0 million, respectively, and $668.0 million thereafter.
10) FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated
statements of earnings is shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ 283.3 $ 186.5 $ 97.9
Deferred......................................... 69.8 (95.0) (88.2)
----------------- ---------------- -----------------
Total.............................................. $ 353.1 $ 91.5 $ 9.7
================= ================ =================
</TABLE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and minority interest by the expected Federal
income tax rate of 35%. The sources of the difference and the tax
effects of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 414.3 $ 234.7 $ 73.0
Non-taxable minority interest...................... (33.2) (38.0) (28.6)
Adjustment of tax audit reserves................... 16.0 (81.7) 6.9
Equity in unconsolidated subsidiaries.............. (39.3) (45.1) (32.3)
Other.............................................. (4.7) 21.6 (9.3)
----------------- ---------------- -----------------
Federal Income Tax Expense......................... $ 353.1 $ 91.5 $ 9.7
================= ================ =================
</TABLE>
The components of the net deferred Federal income taxes are as follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
--------------------------------- ---------------------------------
Assets Liabilities Assets Liabilities
--------------- ---------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C> <C>
Compensation and related benefits...... $ 235.3 $ - $ 257.9 $ -
Other.................................. 27.8 - 30.7 -
DAC, reserves and reinsurance.......... - 231.4 - 222.8
Investments............................ - 364.4 - 405.7
--------------- ---------------- --------------- ---------------
Total.................................. $ 263.1 $ 595.8 $ 288.6 $ 628.5
=============== ================ =============== ===============
</TABLE>
F-26
<PAGE>
The deferred Federal income taxes impacting operations reflect the net
tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The sources of these temporary differences
and the tax effects of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
DAC, reserves and reinsurance...................... $ (7.7) $ 46.2 $ (156.2)
Investments........................................ 46.8 (113.8) 78.6
Compensation and related benefits.................. 28.6 3.7 22.3
Other.............................................. 2.1 (31.1) (32.9)
----------------- ---------------- -----------------
Deferred Federal Income Tax
Expense (Benefit)................................ $ 69.8 $ (95.0) $ (88.2)
================= ================ =================
</TABLE>
The Internal Revenue Service (the "IRS") is in the process of examining
the Holding Company's consolidated Federal income tax returns for the
years 1992 through 1996. Management believes these audits will have no
material adverse effect on the Company's results of operations.
11) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. Ceded reinsurance does not relieve the originating insurer
of liability. The effect of reinsurance (excluding group life and
health) is summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Direct premiums.................................... $ 438.8 $ 448.6 $ 461.4
Reinsurance assumed................................ 203.6 198.3 177.5
Reinsurance ceded.................................. (54.3) (45.4) (41.3)
----------------- ---------------- -----------------
Premiums........................................... $ 588.1 $ 601.5 $ 597.6
================= ================ =================
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 75.7 $ 61.0 $ 48.2
================= ================ =================
Policyholders' Benefits Ceded...................... $ 85.9 $ 70.6 $ 54.1
================= ================ =================
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 39.5 $ 36.4 $ 32.3
================= ================ =================
</TABLE>
Beginning in May 1997, the Company began reinsuring on a yearly renewal
term basis 90% of the mortality risk on new issues of certain term,
universal and variable life products. During 1996, the Company's
retention limit on joint survivorship policies was increased to $15.0
million. Effective January 1, 1994, all in force business above $5.0
million was reinsured. The Insurance Group also reinsures the entire
risk on certain substandard underwriting risks as well as in certain
other cases.
The Insurance Group cedes 100% of its group life and health business to
a third party insurance company. Premiums ceded totaled $1.3 million,
$1.6 million and $2.4 million for 1998, 1997 and 1996, respectively.
Ceded death and disability benefits totaled $15.6 million, $4.3 million
and $21.2 million for 1998, 1997 and 1996, respectively. Insurance
liabilities ceded totaled $560.3 million and $593.8 million at December
31, 1998 and 1997, respectively.
F-27
<PAGE>
12) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified
part-time employees), managers and certain agents. The pension plans are
non-contributory. Equitable Life's benefits are based on a cash balance
formula or years of service and final average earnings, if greater,
under certain grandfathering rules in the plans. Alliance's benefits are
based on years of credited service, average final base salary and
primary social security benefits. The Company's funding policy is to
make the minimum contribution required by the Employee Retirement Income
Security Act of 1974 ("ERISA").
Components of net periodic pension cost (credit) for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Service cost....................................... $ 33.2 $ 32.5 $ 33.8
Interest cost on projected benefit obligations..... 129.2 128.2 120.8
Actual return on assets............................ (175.6) (307.6) (181.4)
Net amortization and deferrals..................... 6.1 166.6 43.4
----------------- ---------------- -----------------
Net Periodic Pension Cost (Credit)................. $ (7.1) $ 19.7 $ 16.6
================= ================ =================
</TABLE>
The plan's projected benefit obligation under the qualified and
non-qualified plans was comprised of:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Benefit obligation, beginning of year.................................. $ 1,801.3 $ 1,765.5
Service cost........................................................... 33.2 32.5
Interest cost.......................................................... 129.2 128.2
Actuarial (gains) losses............................................... 108.4 (15.5)
Benefits paid.......................................................... (138.7) (109.4)
---------------- -----------------
Benefit Obligation, End of Year........................................ $ 1,933.4 $ 1,801.3
================ =================
</TABLE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Plan assets at fair value, beginning of year........................... $ 1,867.4 $ 1,626.0
Actual return on plan assets........................................... 338.9 307.5
Contributions.......................................................... - 30.0
Benefits paid and fees................................................. (123.2) (96.1)
---------------- -----------------
Plan assets at fair value, end of year................................. 2,083.1 1,867.4
Projected benefit obligations.......................................... 1,933.4 1,801.3
---------------- -----------------
Projected benefit obligations less than plan assets.................... 149.7 66.1
Unrecognized prior service cost........................................ (7.5) (9.9)
Unrecognized net loss from past experience different
from that assumed.................................................... 38.7 95.0
Unrecognized net asset at transition................................... 1.5 3.1
---------------- -----------------
Prepaid Pension Cost.................................................. $ 182.4 $ 154.3
================ =================
</TABLE>
The discount rate and rate of increase in future compensation levels
used in determining the actuarial present value of projected benefit
obligations were 7.0% and 3.83%, respectively, at December 31, 1998 and
7.25% and 4.07%, respectively, at December 31, 1997. As of January 1,
1998 and 1997, the expected long-term rate of return on assets for the
retirement plan was 10.25%.
F-28
<PAGE>
The Company recorded, as a reduction of shareholders' equity an
additional minimum pension liability of $28.3 million and $17.3 million,
net of Federal income taxes, at December 31, 1998 and 1997,
respectively, primarily representing the excess of the accumulated
benefit obligation of the qualified pension plan over the accrued
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of group
trusts managed by Alliance.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $31.8 million,
$33.2 million and $34.7 million for 1998, 1997 and 1996, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company (i) on or after attaining
age 55 who have at least 10 years of service or (ii) on or after
attaining age 65 or (iii) whose jobs have been abolished and who have
attained age 50 with 20 years of service. The life insurance benefits
are related to age and salary at retirement. The costs of postretirement
benefits are recognized in accordance with the provisions of SFAS No.
106. The Company continues to fund postretirement benefits costs on a
pay-as-you-go basis and, for 1998, 1997 and 1996, the Company made
estimated postretirement benefits payments of $28.4 million, $18.7
million and $18.9 million, respectively.
The following table sets forth the postretirement benefits plan's
status, reconciled to amounts recognized in the Company's consolidated
financial statements:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Service cost....................................... $ 4.6 $ 4.5 $ 5.3
Interest cost on accumulated postretirement
benefits obligation.............................. 33.6 34.7 34.6
Net amortization and deferrals..................... .5 1.9 2.4
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 38.7 $ 41.1 $ 42.3
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Accumulated postretirement benefits obligation, beginning
of year.............................................................. $ 490.8 $ 388.5
Service cost........................................................... 4.6 4.5
Interest cost.......................................................... 33.6 34.7
Contributions and benefits paid........................................ (28.4) 72.1
Actuarial (gains) losses............................................... (10.2) (9.0)
---------------- -----------------
Accumulated postretirement benefits obligation, end of year............ 490.4 490.8
Unrecognized prior service cost........................................ 31.8 40.3
Unrecognized net loss from past experience different
from that assumed and from changes in assumptions.................... (121.2) (140.6)
---------------- -----------------
Accrued Postretirement Benefits Cost................................... $ 401.0 $ 390.5
================ =================
</TABLE>
Since January 1, 1994, costs to the Company for providing these medical
benefits available to retirees under age 65 are the same as those
offered to active employees and medical benefits will be limited to 200%
of 1993 costs for all participants.
F-29
<PAGE>
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefits obligation was 8.0% in 1998,
gradually declining to 2.5% in the year 2009, and in 1997 was 8.75%,
gradually declining to 2.75% in the year 2009. The discount rate used in
determining the accumulated postretirement benefits obligation was 7.0%
and 7.25% at December 31, 1998 and 1997, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1998
would be increased 4.83%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 4.57%. If the
health care cost trend rate assumptions were decreased by 1% the
accumulated postretirement benefits obligation as of December 31, 1998
would be decreased by 5.6%. The effect of this change on the sum of the
service cost and interest cost would be a decrease of 5.4%.
13) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap
transactions are amortized as yield adjustments over the remaining life
of the underlying hedged security. Income and expense resulting from
interest rate swap activities are reflected in net investment income.
The notional amount of matched interest rate swaps outstanding at
December 31, 1998 and 1997, respectively, was $880.9 million and
$1,353.4 million. The average unexpired terms at December 31, 1998
ranged from 1 month to 4.3 years. At December 31, 1998, the cost of
terminating swaps in a loss position was $8.0 million. Equitable Life
has implemented an interest rate cap program designed to hedge crediting
rates on interest-sensitive individual annuities contracts. The
outstanding notional amounts at December 31, 1998 of contracts purchased
and sold were $8,450.0 million and $875.0 million, respectively. The net
premium paid by Equitable Life on these contracts was $54.8 million and
is being amortized ratably over the contract periods ranging from 1 to 5
years. Income and expense resulting from this program are reflected as
an adjustment to interest credited to policyholders' account balances.
Substantially all of DLJ's activities related to derivatives are, by
their nature trading activities which are primarily for the purpose of
customer accommodations. DLJ enters into certain contractual agreements
referred to as derivatives or off-balance-sheet financial instruments
involving futures, forwards and options. DLJ's derivative activities
consist of writing over-the-counter ("OTC") options to accommodate its
customer needs, trading in forward contracts in U.S. government and
agency issued or guaranteed securities and in futures contracts on
equity-based indices, interest rate instruments and currencies and
issuing structured products based on emerging market financial
instruments and indices. DLJ's involvement in swap contracts and
commodity derivative instruments is not significant.
Fair Value of Financial Instruments
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases
where quoted market prices are not available, fair values are estimated
using present value or other valuation techniques. The fair value
estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument,
including estimates of the timing and amount of expected future cash
flows and the credit standing of counterparties. Such estimates do not
reflect any premium or discount that could result from offering for sale
at one time the Company's entire holdings of a particular financial
instrument, nor do they consider the tax impact of the realization of
unrealized gains or losses. In many cases, the fair value estimates
cannot be substantiated by comparison to independent markets, nor can
the disclosed value be realized in immediate settlement of the
instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts.
Fair market value of off-balance-sheet financial instruments of the
Insurance Group was not material at December 31, 1998 and 1997.
F-30
<PAGE>
Fair values for mortgage loans on real estate are estimated by
discounting future contractual cash flows using interest rates at which
loans with similar characteristics and credit quality would be made.
Fair values for foreclosed mortgage loans and problem mortgage loans are
limited to the estimated fair value of the underlying collateral if
lower.
Fair values of policy loans are estimated by discounting the face value
of the loans from the time of the next interest rate review to the
present, at a rate equal to the excess of the current estimated market
rates over the current interest rate charged on the loan.
The estimated fair values for the Company's association plan contracts,
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain, which are included in policyholders' account
balances, and guaranteed interest contracts are estimated using
projected cash flows discounted at rates reflecting expected current
offering rates.
The estimated fair values for variable deferred annuities and single
premium deferred annuities ("SPDA"), which are included in
policyholders' account balances, are estimated by discounting the
account value back from the time of the next crediting rate review to
the present, at a rate equal to the excess of current estimated market
rates offered on new policies over the current crediting rates.
Fair values for long-term debt are determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt
are determined by discounting contractual cash flows at a rate which
takes into account the level of current market interest rates and
collateral risk. The estimated fair values for recourse mortgage debt
are determined by discounting contractual cash flows at a rate based
upon current interest rates of other companies with credit ratings
similar to the Company. The Company's carrying value of short-term
borrowings approximates their estimated fair value.
The following table discloses carrying value and estimated fair value
for financial instruments not otherwise disclosed in Notes 3, 7 and 8:
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------------
1998 1997
--------------------------------- ---------------------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
--------------- ---------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
Mortgage loans on real estate.......... $ 2,809.9 $ 2,961.8 $ 2,611.4 $ 2,822.8
Other limited partnership interests.... 562.6 562.6 509.4 509.4
Policy loans........................... 2,086.7 2,370.7 2,422.9 2,493.9
Policyholders' account balances -
investment contracts................. 12,892.0 13,396.0 12,611.0 12,714.0
Long-term debt......................... 1,002.4 1,025.2 1,294.5 1,257.0
Closed Block Financial Instruments:
Mortgage loans on real estate.......... 1,633.4 1,703.5 1,341.6 1,420.7
Other equity investments............... 56.4 56.4 86.3 86.3
Policy loans........................... 1,641.2 1,929.7 1,700.2 1,784.2
SCNILC liability....................... 25.0 25.0 27.6 30.3
Discontinued Operations Financial
Instruments:
Mortgage loans on real estate.......... 553.9 599.9 655.5 779.9
Fixed maturities....................... 24.9 24.9 38.7 38.7
Other equity investments............... 115.1 115.1 209.3 209.3
Guaranteed interest contracts.......... 37.0 34.0 37.0 34.0
Long-term debt......................... 147.1 139.8 296.4 297.6
</TABLE>
F-31
<PAGE>
14) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements
include commitments by the Company, under certain conditions: to make
capital contributions of up to $142.9 million to affiliated real estate
joint ventures; and to provide equity financing to certain limited
partnerships of $287.3 million at December 31, 1998, under existing loan
or loan commitment agreements.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance
companies and beneficiaries. To satisfy its obligations under these
agreements, Equitable Life owns single premium annuities issued by
previously wholly owned life insurance subsidiaries. Equitable Life has
directed payment under these annuities to be made directly to the
beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the previously
wholly owned subsidiaries be unable to meet their obligations.
Management believes the satisfaction of those obligations by Equitable
Life is remote.
The Insurance Group had $24.7 million of letters of credit outstanding
at December 31, 1998.
15) LITIGATION
Major Medical Insurance Cases
Equitable Life agreed to settle, subject to court approval, previously
disclosed cases involving lifetime guaranteed renewable major medical
insurance policies issued by Equitable Life in five states. Plaintiffs
in these cases claimed that Equitable Life's method for determining
premium increases breached the terms of certain forms of the policies
and was misrepresented. In certain cases plaintiffs also claimed that
Equitable Life misrepresented to policyholders that premium increases
had been approved by insurance departments, and that it determined
annual rate increases in a manner that discriminated against the
policyholders.
In December 1997, Equitable Life entered into a settlement agreement,
subject to court approval, which would result in creation of a
nationwide class consisting of all persons holding, and paying premiums
on, the policies at any time since January 1, 1988 and the dismissal
with prejudice of the pending actions and the resolution of all similar
claims on a nationwide basis. Under the terms of the settlement, which
involves approximately 127,000 former and current policyholders,
Equitable Life would pay $14.2 million in exchange for release of all
claims and will provide future relief to certain current policyholders
by restricting future premium increases, estimated to have a present
value of $23.3 million. This estimate is based upon assumptions about
future events that cannot be predicted with certainty and accordingly
the actual value of the future relief may vary. In October 1998, the
court entered a judgment approving the settlement agreement and, in
November, a member of the national class filed a notice of appeal of the
judgment. In January 1999, the Court of Appeals granted Equitable Life's
motion to dismiss the appeal.
Life Insurance and Annuity Sales Cases
A number of lawsuits are pending as individual claims and purported
class actions against Equitable Life and its subsidiary insurance
companies Equitable Variable Life Insurance Company ("EVLICO," which was
merged into Equitable Life effective January 1, 1997) and The Equitable
of Colorado, Inc. ("EOC"). These actions involve, among other things,
sales of life and annuity products for varying periods from 1980 to the
present, and allege, among other things, sales practice
misrepresentation primarily involving: the number of premium payments
required; the propriety of a product as an investment vehicle; the
propriety of a product as a replacement of an existing policy; and
failure to disclose a product as life insurance. Some actions are in
state courts and others are in U.S. District Courts in varying
jurisdictions, and are in varying stages of discovery and motions for
class certification.
F-32
<PAGE>
In general, the plaintiffs request an unspecified amount of damages,
punitive damages, enjoinment from the described practices, prohibition
against cancellation of policies for non-payment of premium or other
remedies, as well as attorneys' fees and expenses. Similar actions have
been filed against other life and health insurers and have resulted in
the award of substantial judgments, including material amounts of
punitive damages, or in substantial settlements. Although the outcome of
litigation cannot be predicted with certainty, particularly in the early
stages of an action, The Equitable's management believes that the
ultimate resolution of these cases should not have a material adverse
effect on the financial position of The Equitable. The Equitable's
management cannot make an estimate of loss, if any, or predict whether
or not any such litigation will have a material adverse effect on The
Equitable's results of operations in any particular period.
Discrimination Case
Equitable Life is a defendant in an action, certified as a class action
in September 1997, in the United States District Court for the Northern
District of Alabama, Southern Division, involving alleged discrimination
on the basis of race against African-American applicants and potential
applicants in hiring individuals as sales agents. Plaintiffs seek a
declaratory judgment and affirmative and negative injunctive relief,
including the payment of back-pay, pension and other compensation.
Although the outcome of litigation cannot be predicted with certainty,
The Equitable's management believes that the ultimate resolution of this
matter should not have a material adverse effect on the financial
position of The Equitable. The Equitable's management cannot make an
estimate of loss, if any, or predict whether or not such matter will
have a material adverse effect on The Equitable's results of operations
in any particular period.
Alliance Capital
In July 1995, a class action complaint was filed against Alliance North
American Government Income Trust, Inc. (the "Fund"), Alliance and
certain other defendants affiliated with Alliance, including the Holding
Company, alleging violations of Federal securities laws, fraud and
breach of fiduciary duty in connection with the Fund's investments in
Mexican and Argentine securities. The original complaint was dismissed
in 1996; on appeal, the dismissal was affirmed. In October 1996,
plaintiffs filed a motion for leave to file an amended complaint,
alleging the Fund failed to hedge against currency risk despite
representations that it would do so, the Fund did not properly disclose
that it planned to invest in mortgage-backed derivative securities and
two Fund advertisements misrepresented the risks of investing in the
Fund. In October 1998, the U.S. Court of Appeals for the Second Circuit
issued an order granting plaintiffs' motion to file an amended complaint
alleging that the Fund misrepresented its ability to hedge against
currency risk and denying plaintiffs' motion to file an amended
complaint containing the other allegations. Alliance believes that the
allegations in the amended complaint, which was filed in February 1999,
are without merit and intends to defend itself vigorously against these
claims. While the ultimate outcome of this matter cannot be determined
at this time, Alliance's management does not expect that it will have a
material adverse effect on Alliance's results of operations or financial
condition.
DLJSC
DLJSC is a defendant along with certain other parties in a class action
complaint involving the underwriting of units, consisting of notes and
warrants to purchase common shares, of Rickel Home Centers, Inc.
("Rickel"), which filed a voluntary petition for reorganization pursuant
to Chapter 11 of the Bankruptcy Code. The complaint seeks unspecified
compensatory and punitive damages from DLJSC, as an underwriter and as
an owner of 7.3% of the common stock, for alleged violation of Federal
securities laws and common law fraud for alleged misstatements and
omissions contained in the prospectus and registration statement used in
the offering of the units. DLJSC is defending itself vigorously against
all the allegations contained in the complaint. Although there can be no
assurance, DLJ's management does not believe that the ultimate outcome
of this litigation will have a material adverse effect on DLJ's
consolidated financial condition. Due to the early stage of this
litigation, based on the information currently available to it, DLJ's
management cannot predict whether or not such litigation will have a
material adverse effect on DLJ's results of operations in any particular
period.
F-33
<PAGE>
DLJSC is a defendant in a purported class action filed in a Texas State
Court on behalf of the holders of $550 million principal amount of
subordinated redeemable discount debentures of National Gypsum
Corporation ("NGC"). The debentures were canceled in connection with a
Chapter 11 plan of reorganization for NGC consummated in July 1993. The
litigation seeks compensatory and punitive damages for DLJSC's
activities as financial advisor to NGC in the course of NGC's Chapter 11
proceedings. Trial is expected in early May 1999. DLJSC intends to
defend itself vigorously against all the allegations contained in the
complaint. Although there can be no assurance, DLJ's management does not
believe that the ultimate outcome of this litigation will have a
material adverse effect on DLJ's consolidated financial condition. Based
upon the information currently available to it, DLJ's management cannot
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
DLJSC is a defendant in a complaint which alleges that DLJSC and a
number of other financial institutions and several individual defendants
violated civil provisions of RICO by inducing plaintiffs to invest over
$40 million in The Securities Groups, a number of tax shelter limited
partnerships, during the years 1978 through 1982. The plaintiffs seek
recovery of the loss of their entire investment and an approximately
equivalent amount of tax-related damages. Judgment for damages under
RICO are subject to trebling. Discovery is complete. Trial has been
scheduled for May 17, 1999. DLJSC believes that it has meritorious
defenses to the complaints and will continue to contest the suits
vigorously. Although there can be no assurance, DLJ's management does
not believe that the ultimate outcome of this litigation will have a
material adverse effect on DLJ's consolidated financial condition. Based
upon the information currently available to it, DLJ's management cannot
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
DLJSC is a defendant along with certain other parties in four actions
involving Mid-American Waste Systems, Inc. ("Mid-American"), which filed
a voluntary petition for reorganization pursuant to Chapter 11 of the
Bankruptcy Code in January 1997. Three actions seek rescission,
compensatory and punitive damages for DLJSC's role in underwriting notes
of Mid-American. The other action, filed by the Plan Administrator for
the bankruptcy estate of Mid-American, alleges that DLJSC is liable as
an underwriter for alleged misrepresentations and omissions in the
prospectus for the notes, and liable as financial advisor to
Mid-American for allegedly failing to advise Mid-American about its
financial condition. DLJSC believes that it has meritorious defenses to
the complaints and will continue to contest the suits vigorously.
Although there can be no assurance, DLJ's management does not believe
that the ultimate outcome of this litigation will have a material
adverse effect on DLJ's consolidated financial condition. Based upon
information currently available to it, DLJ's management cannot predict
whether or not such litigation will have a material adverse effect on
DLJ's results of operations in any particular period.
Other Matters
In addition to the matters described above, the Holding Company and its
subsidiaries are involved in various legal actions and proceedings in
connection with their businesses. Some of the actions and proceedings
have been brought on behalf of various alleged classes of claimants and
certain of these claimants seek damages of unspecified amounts. While
the ultimate outcome of such matters cannot be predicted with certainty,
in the opinion of management no such matter is likely to have a material
adverse effect on the Company's consolidated financial position or
results of operations.
16) LEASES
The Company has entered into operating leases for office space and
certain other assets, principally data processing equipment and office
furniture and equipment. Future minimum payments under noncancelable
leases for 1999 and the succeeding four years are $98.7 million, $92.7
million, $73.4 million, $59.9 million, $55.8 million and $550.1 million
thereafter. Minimum future sublease rental income on these noncancelable
leases for 1999 and the succeeding four years is $7.6 million, $5.6
million, $4.6 million, $2.3 million, $2.3 million and $25.4 million
thereafter.
F-34
<PAGE>
At December 31, 1998, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1999
and the succeeding four years is $189.2 million, $177.0 million, $165.5
million, $145.4 million, $122.8 million and $644.7 million thereafter.
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Compensation costs................................. $ 772.0 $ 721.5 $ 704.8
Commissions........................................ 478.1 409.6 329.5
Short-term debt interest expense................... 26.1 31.7 8.0
Long-term debt interest expense.................... 84.6 121.2 137.3
Amortization of policy acquisition costs........... 292.7 287.3 405.2
Capitalization of policy acquisition costs......... (609.1) (508.0) (391.9)
Rent expense, net of sublease income............... 100.0 101.8 113.7
Cursitor intangible assets writedown............... - 120.9 -
Other.............................................. 1,056.8 917.9 769.1
----------------- ---------------- -----------------
Total.............................................. $ 2,201.2 $ 2,203.9 $ 2,075.7
================= ================ =================
</TABLE>
During 1997 and 1996, the Company restructured certain operations in
connection with cost reduction programs and recorded pre-tax provisions
of $42.4 million and $24.4 million, respectively. The amounts paid
during 1998, associated with cost reduction programs, totaled $22.6
million. At December 31, 1998, the liabilities associated with cost
reduction programs amounted to $39.4 million. The 1997 cost reduction
program included costs related to employee termination and exit costs.
The 1996 cost reduction program included restructuring costs related to
the consolidation of insurance operations' service centers. Amortization
of DAC in 1996 included a $145.0 million writeoff of DAC related to DI
contracts.
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends
to the Holding Company. Under the New York Insurance Law, the
Superintendent has broad discretion to determine whether the financial
condition of a stock life insurance company would support the payment of
dividends to its shareholders. For 1998, 1997 and 1996, statutory net
income (loss) totaled $384.4 million, $(351.7) million and $(351.1)
million, respectively. Statutory surplus, capital stock and Asset
Valuation Reserve ("AVR") totaled $4,728.0 million and $3,907.1 million
at December 31, 1998 and 1997, respectively. No dividends have been paid
by Equitable Life to the Holding Company to date.
At December 31, 1998, the Insurance Group, in accordance with various
government and state regulations, had $25.6 million of securities
deposited with such government or state agencies.
The differences between statutory surplus and capital stock determined
in accordance with Statutory Accounting Principles ("SAP") and total
shareholders' equity on a GAAP basis are primarily attributable to: (a)
inclusion in SAP of an AVR intended to stabilize surplus from
fluctuations in the value of the investment portfolio; (b) future policy
benefits and policyholders' account balances under SAP differ from GAAP
due to differences between actuarial assumptions and reserving
methodologies; (c) certain policy acquisition costs are expensed under
SAP but deferred under GAAP and amortized over future periods to achieve
a matching of revenues and expenses; (d) Federal income taxes are
generally accrued under SAP based upon revenues and expenses in the
Federal income tax return while under GAAP deferred taxes are provided
for timing differences between recognition of revenues and expenses for
financial reporting and income tax purposes; (e) valuation of assets
under SAP and GAAP differ due to different investment valuation and
depreciation methodologies, as well as the deferral of interest-related
realized capital gains and losses on fixed income investments; and (f)
differences in the accrual methodologies for post-employment and
retirement benefit plans.
F-35
<PAGE>
19) BUSINESS SEGMENT INFORMATION
The Company's operations consist of Insurance and Investment Services.
The Company's management evaluates the performance of each of these
segments independently and allocates resources based on current and
future requirements of each segment. Management evaluates the
performance of each segment based upon operating results adjusted to
exclude the effect of unusual or non-recurring events and transactions
and certain revenue and expense categories not related to the base
operations of the particular business net of minority interest.
Information for all periods is presented on a comparable basis.
Intersegment investment advisory and other fees of approximately $61.8
million, $84.1 million and $129.2 million for 1998, 1997 and 1996,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to discontinued
operations of $.5 million, $4.2 million and $13.3 million for 1998, 1997
and 1996, respectively, are eliminated in consolidation.
The following tables reconcile each segment's revenues and operating
earnings to total revenues and earnings from continuing operations
before Federal income taxes and cumulative effect of accounting change
as reported on the consolidated statements of earnings and the segments'
assets to total assets on the consolidated balance sheets, respectively.
<TABLE>
<CAPTION>
Investment
Insurance Services Elimination Total
--------------- ----------------- --------------- ----------------
(In Millions)
<S> <C> <C> <C> <C>
1998
Segment revenues..................... $ 4,029.8 $ 1,438.4 $ (5.7) $ 5,462.5
Investment gains..................... 64.8 35.4 - 100.2
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 4,094.6 $ 1,473.8 $ (5.7) $ 5,562.7
=============== ================= =============== ================
Pre-tax operating earnings........... $ 688.6 $ 284.3 $ - $ 972.9
Investment gains , net of
DAC and other charges.............. 41.7 27.7 - 69.4
Pre-tax minority interest............ - 141.5 - 141.5
--------------- ----------------- --------------- ----------------
Earnings from Continuing
Operations......................... $ 730.3 $ 453.5 $ - $ 1,183.8
=============== ================= =============== ================
Total Assets......................... $ 75,626.0 $ 12,379.2 $ (64.4) $ 87,940.8
=============== ================= =============== ================
1997
Segment revenues..................... $ 3,990.8 $ 1,200.0 $ (7.7) $ 5,183.1
Investment gains (losses)............ (318.8) 255.1 - (63.7)
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 3,672.0 $ 1,455.1 $ (7.7) $ 5,119.4
=============== ================= =============== ================
Pre-tax operating earnings........... $ 507.0 $ 258.3 $ - $ 765.3
Investment gains (losses), net of
DAC and other charges.............. (292.5) 252.7 - (39.8)
Non-recurring costs and expenses..... (41.7) (121.6) - (163.3)
Pre-tax minority interest............ - 108.5 - 108.5
--------------- ----------------- --------------- ----------------
Earnings from Continuing
Operations......................... $ 172.8 $ 497.9 $ - $ 670.7
=============== ================= =============== ================
Total Assets......................... $ 67,762.4 $ 13,691.4 $ (96.1) $ 81,357.7
=============== ================= =============== ================
</TABLE>
F-36
<PAGE>
<TABLE>
<CAPTION>
Investment
Insurance Services Elimination Total
--------------- ----------------- --------------- ----------------
(In Millions)
<S> <C> <C> <C> <C>
1996
Segment revenues..................... $ 3,789.1 $ 1,105.5 $ (12.6) $ 4,882.0
Investment gains (losses)............ (30.3) 20.5 - (9.8)
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 3,758.8 $ 1,126.0 $ (12.6) $ 4,872.2
=============== ================= =============== ================
Pre-tax operating earnings........... $ 337.1 $ 224.6 $ - $ 561.7
Investment gains (losses), net of
DAC and other charges.............. (37.2) 16.9 - (20.3)
Reserve strengthening and DAC
writeoff........................... (393.0) - - (393.0)
Non-recurring costs and
expenses........................... (22.3) (1.1) - (23.4)
Pre-tax minority interest............ - 83.6 - 83.6
--------------- ----------------- --------------- ----------------
Earnings (Loss) from
Continuing Operations.............. $ (115.4) $ 324.0 $ - $ 208.6
=============== ================= =============== ================
</TABLE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1998 and 1997 are summarized
below:
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------------
March 31 June 30 September 30 December 31
----------------- ----------------- ------------------ ------------------
(In Millions)
<S> <C> <C> <C> <C>
1998
Total Revenues................ $ 1,470.2 $ 1,422.9 $ 1,297.6 $ 1,372.0
================= ================= ================== ==================
Earnings from Continuing
Operations before
Cumulative Effect
of Accounting Change........ $ 212.8 $ 197.0 $ 136.8 $ 158.9
================= ================= ================== ==================
Net Earnings.................. $ 213.3 $ 198.3 $ 137.5 $ 159.1
================= ================= ================== ==================
1997
Total Revenues................ $ 1,266.0 $ 1,552.8 $ 1,279.0 $ 1,021.6
================= ================= ================== ==================
Earnings from Continuing
Operations before
Cumulative Effect
of Accounting Change........ $ 117.4 $ 222.5 $ 145.1 $ 39.4
================= ================= ================== ==================
Net Earnings (Loss)........... $ 114.1 $ 223.1 $ 144.9 $ (44.9)
================= ================= ================== ==================
</TABLE>
Net earnings for the three months ended December 31, 1997 includes a
charge of $212.0 million related to additions to valuation allowances on
and writeoffs of real estate of $225.2 million, and reserve
strengthening on discontinued operations of $84.3 million offset by a
reversal of prior years tax reserves of $97.5 million.
F-37
<PAGE>
21) INVESTMENT IN DLJ
At December 31, 1998, the Company's ownership of DLJ interest was
approximately 32.5%. The Company's ownership interest will be further
reduced upon the issuance of common stock after the vesting of
forfeitable restricted stock units acquired by and/or the exercise of
options granted to certain DLJ employees. DLJ restricted stock units
represents forfeitable rights to receive approximately 5.2 million
shares of DLJ common stock through February 2000.
The results of operations of DLJ are accounted for on the equity basis
and are included in commissions, fees and other income in the
consolidated statements of earnings. The Company's carrying value of DLJ
is included in investment in and loans to affiliates in the consolidated
balance sheets.
Summarized balance sheets information for DLJ, reconciled to the
Company's carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 13,195.1 $ 16,535.7
Securities purchased under resale agreements........................... 20,063.3 22,628.8
Broker-dealer related receivables...................................... 34,264.5 28,159.3
Other assets........................................................... 4,759.3 3,182.0
---------------- -----------------
Total Assets........................................................... $ 72,282.2 $ 70,505.8
================ =================
Liabilities:
Securities sold under repurchase agreements............................ $ 35,775.6 $ 36,006.7
Broker-dealer related payables......................................... 26,161.5 26,127.2
Short-term and long-term debt.......................................... 3,997.6 3,249.5
Other liabilities...................................................... 3,219.8 2,860.9
---------------- -----------------
Total liabilities...................................................... 69,154.5 68,244.3
DLJ's company-obligated mandatorily redeemed preferred
securities of subsidiary trust holding solely debentures of DLJ...... 200.0 200.0
Total shareholders' equity............................................. 2,927.7 2,061.5
---------------- -----------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 72,282.2 $ 70,505.8
================ =================
DLJ's equity as reported............................................... $ 2,927.7 $ 2,061.5
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 23.7 23.5
The Holding Company's equity ownership in DLJ.......................... (1,002.4) (740.2)
Minority interest in DLJ............................................... (1,118.2) (729.3)
---------------- -----------------
The Company's Carrying Value of DLJ.................................... $ 830.8 $ 615.5
================ =================
</TABLE>
F-38
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Commission, fees and other income...................................... $ 3,184.7 $ 2,430.7
Net investment income.................................................. 2,189.1 1,652.1
Dealer, trading and investment gains, net.............................. 33.2 557.7
---------------- -----------------
Total revenues......................................................... 5,407.0 4,640.5
Total expenses including income taxes.................................. 5,036.2 4,232.2
---------------- -----------------
Net earnings........................................................... 370.8 408.3
Dividends on preferred stock........................................... 21.3 12.2
---------------- -----------------
Earnings Applicable to Common Shares................................... $ 349.5 $ 396.1
================ =================
DLJ's earnings applicable to common shares as reported................. $ 349.5 $ 396.1
Amortization of cost in excess of net assets acquired in 1985.......... (.8) (1.3)
The Holding Company's equity in DLJ's earnings......................... (136.8) (156.8)
Minority interest in DLJ............................................... (99.5) (109.1)
---------------- -----------------
The Company's Equity in DLJ's Earnings................................. $ 112.4 $ 128.9
================ =================
</TABLE>
22) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock option plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option
plans for certain employees. The Company has elected to continue to
account for stock-based compensation using the intrinsic value method
prescribed in APB No. 25. Had compensation expense for the Holding
Company, DLJ and Alliance Stock Option Incentive Plan options been
determined based on SFAS No. 123's fair value based method, the
Company's pro forma net earnings for 1998, 1997 and 1996 would have
been:
<TABLE>
<CAPTION>
1998 1997 1996
--------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C>
Net Earnings:
As reported............................................. $ 708.2 $ 437.2 $ 10.3
Pro forma............................................... 678.4 426.3 3.3
</TABLE>
The fair values of options granted after December 31, 1994, used as a
basis for the above pro forma disclosures, were estimated as of the
dates of grant using the Black-Scholes option pricing model. The option
pricing assumptions for 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Holding Company DLJ Alliance
------------------------------ ------------------------------- ----------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
--------- ---------- --------- ---------- -------------------- ---------------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend yield...... 0.32% 0.48% 0.80% 0.69% 0.86% 1.54% 6.50% 8.00% 8.00%
Expected volatility. 28% 20% 20% 40% 33% 25% 29% 26% 23%
Risk-free interest
rate.............. 5.48% 5.99% 5.92% 5.53% 5.96% 6.07% 4.40% 5.70% 5.80%
Expected life
in years.......... 5 5 5 5 5 5 7.2 7.2 7.4
Weighted average
fair value per
option at
grant-date........ $22.64 $12.25 $6.94 $16.27 $10.81 $4.03 $3.86 $2.18 $1.35
</TABLE>
F-39
<PAGE>
A summary of the Holding Company, DLJ and Alliance's option plans is as
follows:
<TABLE>
<CAPTION>
Holding Company DLJ Alliance
----------------------------- ----------------------------- -----------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Price of Price of Price of
Shares Options Shares Options Units Options
(In Millions) Outstanding (In Millions) Outstanding (In Millions) Outstanding
--------------- ------------- --------------- ------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of
January 1, 1996........ 6.7 $20.27 18.4 $13.50 9.6 $ 8.86
Granted................ .7 $24.94 4.2 $16.27 1.4 $12.56
Exercised.............. (.1) $19.91 - (.8) $ 6.82
Expired................ - - -
Forfeited.............. (.6) $20.21 (.4) $13.50 (.2) $ 9.66
--------------- ------------- ---------------
Balance as of
December 31, 1996...... 6.7 $20.79 22.2 $14.03 10.0 $ 9.54
Granted................ 3.2 $41.85 6.4 $30.54 2.2 $18.28
Exercised.............. (1.6) $20.26 (.2) $16.01 (1.2) $ 8.06
Forfeited.............. (.4) $23.43 (.2) $13.79 (.4) $10.64
--------------- ------------- ---------------
Balance as of
December 31, 1997...... 7.9 $29.05 28.2 $17.78 10.6 $11.41
Granted................ 4.3 $66.26 1.5 $38.59 2.8 $26.28
Exercised.............. (1.1) $21.18 (1.4) $14.91 (.9) $ 8.91
Forfeited.............. (.4) $47.01 (.1) $17.31 (.2) $13.14
--------------- ------------- ---------------
Balance as of
December 31, 1998...... 10.7 $44.00 28.2 $19.04 12.3 $14.94
=============== ============= ===============
</TABLE>
F-40
<PAGE>
Information about options outstanding and exercisable at December 31,
1998 is as follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
---------------------------------------------------- -----------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices (In Millions) Life (Years) Price (In Millions) Price
--------------------------------------- ----------------- ---------------- ------------------- ---------------
Holding
Company
----------------------
<S> <C> <C> <C> <C> <C>
$18.125 -$27.75 3.7 5.19 $20.97 3.0 $20.33
$28.50 -$45.25 3.0 8.68 $41.79 -
$50.63 -$66.75 2.1 9.21 $52.73 -
$81.94 -$82.56 1.9 9.62 $82.56 -
----------------- -------------------
$18.125 -$82.56 10.7 7.75 $44.00 3.0 $20.33
================= ================= ================ ==================== ==============
DLJ
----------------------
$13.50 -$25.99 22.3 7.1 $14.59 21.4 $15.05
$26.00 -$38.99 5.0 8.8 $33.94 -
$39.00 -$52.875 .9 9.4 $44.65 -
----------------- -------------------
$13.50 -$52.875 28.2 7.5 $19.04 21.4 $15.05
================= ================== ============== ===================== =============
Alliance
----------------------
$ 3.03 -$ 9.69 3.1 4.5 $ 8.03 2.4 $ 7.57
$ 9.81 -$10.69 2.0 5.3 $10.05 1.6 $10.07
$11.13 -$13.75 2.4 7.5 $11.92 1.0 $11.77
$18.47 -$18.78 2.0 9.0 $18.48 .4 $18.48
$22.50 -$26.31 2.8 9.9 $26.28 - -
----------------- -------------------
$ 3.03 -$26.31 12.3 7.2 $14.94 5.4 $ 9.88
================= =================== ============= ===================== =============
</TABLE>
F-41
<PAGE>
EQUI-VEST(R)
EMPLOYER-SPONSORED RETIREMENT PROGRAMS
STATEMENT OF ADDITIONAL INFORMATION
MAY 3, 1999
----------------
A COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CONTRACT
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NY 10104
- --------------------------------------------------------------------------------
This statement of additional information ("SAI") is not a prospectus. It should
be read in conjunction with the related prospectus for EQUI-VEST, dated May 3,
1999. That prospectus provides detailed information concerning the contracts and
the variable investment options that fund the contracts. Each variable
investment option is a subaccount of Equitable Life's Separate Account A.
Definitions of special terms used in the SAI are found in the prospectus.
A copy of the prospectus is available free of charge by writing the Processing
Office (P.O. Box 2996, New York, NY 10116-2996), by calling toll-free,
1-800-628-6673, or by contacting your Equitable associate.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
TABLE OF CONTENTS
- -----------------------------------------------------------------------------------------
PAGE
- -----------------------------------------------------------------------------------------
<S> <C>
Additional Loan Provisions 2
- -----------------------------------------------------------------------------------------
Tax Rules: Special Aspects 3
- -----------------------------------------------------------------------------------------
Required Minimum Distributions Option 4
- -----------------------------------------------------------------------------------------
Accumulation Unit Values 5
- -----------------------------------------------------------------------------------------
Calculation of Annuity Payments 5
- -----------------------------------------------------------------------------------------
The Reorganization 6
- -----------------------------------------------------------------------------------------
Custodian and Independent Accountants 7
- -----------------------------------------------------------------------------------------
Alliance Money Market Option Yield Information 7
- -----------------------------------------------------------------------------------------
Other Yield Information 8
- -----------------------------------------------------------------------------------------
Key Factors in Retirement Planning 8
- -----------------------------------------------------------------------------------------
Long-Term Market Trends 12
- -----------------------------------------------------------------------------------------
Financial Statements 14
- -----------------------------------------------------------------------------------------
</TABLE>
Copyright 1999 The Equitable Life Assurance Society
of the United States, New York, New York 10104
All rights reserved.
Cat. No. 128015
___________________
888-1175
1
<PAGE>
- --------------------------------------------------------------------------------
ADDITIONAL LOAN PROVISIONS
The EQUI-VEST Corporate Trusteed, non-ERISA, and ERISA TSA Loans have the
following features in common:
The term of a TSA or Corporate Trusteed loan is five years unless the loan is
used to acquire the Participant's primary residence. Our contract limit for
loans used to purchase the Participant's primary residence is 10 years.
The loan term under corporate trusteed and TSA contracts may not extend beyond
the earliest of: (1) election and commencement of annuity benefits, (2) the date
of termination of the contract and (3) the date a death benefit is paid.
Payment to us to cover loan interest and to amortize a loan will be due
beginning the first day of the third month following the effective date of the
loan and quarterly thereafter. All loan payments must be made by check and must
be drawn on a bank in the U.S., in U.S. dollars and made payable to Equitable
Life. Loan payments received prior to the due date will be credited only on the
next payment due date. Any payments we receive will first be applied to
interest, with the balance applied to repayment of the loan.
Only one loan is permitted at any one time. At any time after the loan has been
issued, a loan may be repaid in full and terminated earlier than scheduled.
Plans subject to ERISA provide that the Participant's spouse must consent in
writing to the loan.
On the loan effective date, we will transfer to a loan reserve account an amount
equal to the loan plus 10% of the loaned amount for TSA loans and 25% for
Corporate Trusteed loans. The additional amount is intended as a reserve to
cover the contingencies including unpaid interest and applicable withdrawal
charges. Initially, an amount equal to the loan amount will be held in our
general account and will earn interest at an effective annual rate of 4% during
the loan term (for TSA loans, the interest is at the loan reserve account rate
- -- the loan interest rate minus 2% during the loan term), whereas the additional
loan reserve, as stated above, will be held in the general account but will earn
interest at the guaranteed interest option's current guaranteed interest rate
applicable to the contract.
You may specify from which investment options the loan and loan reserve are to
be deducted when you request the loan. If not specified, we will prorate the
amounts withdrawn from the investment options based on the amounts in each
investment option. No partial withdrawals or transfers from the loan reserve
account are permitted.
On the first day of the third month following the effective date of the loan and
quarterly thereafter (or on the first business day thereafter, if such day is
not a business day), the amount of interest earned at 4% annually (loan reserve
account rate for TSA loans) during the prior quarter will be transferred to the
guaranteed interest option. Any loan payment will result in a transfer of the
amount of principal repaid from the portion of the loan reserve account that
earns 4% interest (loan reserve account Rate for TSA loans) to the guaranteed
interest option, and then may be withdrawn (if otherwise permitted) or
transferred to one or more variable investment options.
Upon full repayment of the loan, any amounts remaining in the loan reserve
account will be transferred to the guaranteed interest account and may then be
withdrawn (if otherwise permitted) or transferred among the variable investment
options.
EQUI-VEST Corporate Trusteed loans
The EQUI-VEST Corporate Trusteed loan request form is entered into between the
Participant and the trustee. Equitable Life performs services specified in the
Agreement on behalf of the trustee. The trustee (or employer, or other plan
administrator and not Equitable Life) is responsible for monitoring compliance
with Internal Revenue Code and ERISA requirements and the requirements of the
particular plan. The trustee will make payments to Equitable Life.
The trustee of a qualified plan purchasing an EQUI-VEST Corporate Trusteed
contract may set any interest rate for a loan so long as it is not less than 6%
nor more than the maximum rate permitted by applicable law. The trustee
(contract owner) must bill the plan participant (annuitant) for the difference,
if any, between 6% and the rate the trustee charges. Under the terms of the
Internal Revenue Code and ERISA, if an unreasonably high or low rate of interest
is charged for loans, the plan may be disqualified and the amount of the loan
may be treated as a taxable distribution. In that case, the trustee would be
required to report the "deemed" distribution to the Internal Revenue Service
("IRS").
For Corporate Trusteed contracts, the "loan effective date" means either (1) the
first day of the month following the date the loan agreement, properly completed
and signed by the plan participant (annuitant), is approved by the trustee
(contract owner) and received and accepted by us at our Processing Office, if
the loan agreement is received on or before the 15th day of the month, or (2)
the first day of the second month following the date the loan agreement,
properly completed and signed by the plan participant (annuitant), is approved
by the trustee (contract owner) and received and accepted by us at our
Processing Office, if
2
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the loan agreement is received after the 15th day of the month.
The loan amount is based on the Participant's vested interest in the plan and
the account value of the EQUI-VEST contract on the loan effective date.
If loan interest (except interest due at the end of the loan term) or required
principal repayments are not received at our Processing Office within fifteen
days after the due date, or if any loan principal and accrued interest are due
at the end of the loan term, the loan is in default. We will make a partial
withdrawal from the additional loan reserve account in an amount sufficient to
pay the amount due plus any applicable withdrawal charges and any required
income tax withholding. Such a withdrawal could result in a penalty tax or the
disqualification of your EQUI-VEST Corporate Trusteed contract or the qualified
plan.
The trustee is required to report to the IRS the amount of the default as a
deemed taxable distribution which may also be subject to penalty tax.
Non-ERISA TSA loans
The minimum loan amount is $3,000 and the maximum is $50,000 (less the highest
outstanding loan balance in the preceding twelve calendar months less the
outstanding balance of all loans from the employer's qualified plan on the date
the loan is made). The maximum amount of the loan is 80% of the account value,
if the amount of the account value is at least $3,750 but less than $12,500;
$10,000 if the amount of the account value is at least $12,500 but less than
$20,000; or 50% of the account value if the amount of the account value is
$20,000 or more.
ERISA TSA loans
The minimum loan amount is $1,000; the maximum is 50% of the account value, but
not more than $50,000. The $50,000 maximum is reduced by the excess of the
highest outstanding loan balance in the preceding twelve calendar months, less
the outstanding balance of any loans under all the employer's qualified plans on
the date the loan is effective.
Equitable Life will set a reasonable interest rate for plan loans as defined
below, unless the plan administrators notify us of their intent to set their own
rate. If we set the rate, it will be equal to the Moody's Corporate Bond Yield
Averages. With Moody's, we will use the average for Baa bonds for the calendar
month ending two months before the date on which the rate is determined.
Non-ERISA and ERISA TSA loans
The account value is measured on the "loan effective date" which is the first
day of the month following the date we approve a properly completed loan request
form.
There are a number of rules governing the minimum and maximum that can be
requested for a loan. These rules are described on the loan request form. This
form should be reviewed carefully prior to requesting a loan.
If a required loan repayment on a TSA contract is not made, we will treat the
amount equal to the interest and principal payment due as a default. We will
also deduct a default charge (as described below). We will treat such amount
(plus any required income tax withholding) as a "deemed distribution." Such
amount will be taxable and also may be subject to a penalty tax.
The default charge on the amount of deemed distribution is equal to the
applicable withdrawal charge which would have applied if such amount had been
withdrawn from the contract.
Amounts in default will be in the loan reserve account in suspense until federal
tax rules permit such amounts to be deducted from the TSA contract to repay your
obligation to us.
Currently we default your loan on a missed-payment-by-missed-payment basis, but
under proposed Federal regulations, we may be required to default the entire
unpaid loan balance and unpaid interest at the time of the default. Under these
proposed regulations, we would be required to treat the entire remaining
outstanding balance of the loan (including any unpaid interest) as a deemed
taxable distribution in the year of the default, which is subject to income tax
reporting and early distribution tax penalty. See "Tax information" in the
prospectus. If your contract is subject to federal income tax withdrawal
restrictions at the time you default, because of the interplay between federal
income tax rules and state insurance law requisites, we may be required to
continue to charge interest and credit interest on the unpaid loan balance until
such defaulted payment liability can be satisfied by an actual distribution.
This may result in additional taxable income to you. Interest credited on
amounts in default could result in additional taxable income in the amount of
the interest credited and could be subject to a penalty tax. See "Tax
information" in the prospectus.
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TAX RULES: SPECIAL ASPECTS
CERTAIN DISTRIBUTIONS FROM TRUSTEED CONTRACTS
In the case of an EQUI-VEST Trusteed contract, the trustee, as contract owner,
may transfer ownership of the contract to the annuitant in certain
circumstances. This transfer constitutes a distribution from a qualified plan.
Although the annuitant will receive a tax information report on the distribution
from the plan
3
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administrator, this transaction is not a taxable event to the annuitant until
any payments are made under the transferred contract. The transfer of ownership
from the Trustee to the annuitant is not an IRA rollover. If they otherwise
qualify as "eligible rollover distributions," amounts distributed from the
contract, however, may subsequently be directly rolled over into an individual
retirement arrangement or another qualified retirement plan.
SIMPLIFIED EMPLOYEE PENSION PLAN (SEPS)
When an employer establishes a SEP for its employees, contributions for each
eligible employee can be made under a Contract issued as a Regular IRA.
Contributions. In 1999 an employer's contribution to a SEP for an employee,
including any salary reduction contributions, cannot exceed the lesser of
$24,000 or 15% of the employee's compensation. The employee's compensation is
determined without taking into account the employer's contribution to the SEP,
and is limited to $160,000 in 1999.
The employer must make a contribution for each employee who has reached age 21
and has worked for the employer during at least three of the preceding five
years. Contributions are not required for employees who (1) earn less than $400
in 1999, (2) are covered by a collective bargaining agreement or (3) are
non-resident aliens who receive no earned income from the employer from sources
within the United States. Generally, SEP plans are maintained on a calendar year
basis.
Employer contributions must be made under a written program which provides that
(i) withdrawals are permitted, (ii) contributions are made under an allocation
formula and (iii) bear a uniform relationship to compensation. Contributions
cannot discriminate in favor of highly compensated employees. Contributions to
the SEP may take employer-paid Social Security benefits into account, provided
the level of integration satisfies the limits contained in the Internal Revenue
Code.
Except as otherwise indicated in this section, all of the IRA rules discussed
under "Tax information" in the prospectus, including those relating to
revocation, distributions and penalties for early, minimum and excess
distributions, apply to SEPs.
Provided that the plan was established prior to January 1, 1997, employers with
25 or fewer eligible employees for the prior taxable year may allow such
employees to make salary reduction contributions to a SEP (SARSEP). SARSEP plans
may not be established after 12/31/96. New participants may be added after that
date as long as the plan was in effect prior to 1/1/97. SARSEP arrangements can
be offered only if at least 50% of the eligible employees elect to participate
in the SARSEP. Special nondiscrimination rules apply to highly compensated
employees in a SARSEP. The percentage of compensation deferred by any eligible
highly compensated employee cannot exceed 125% of the average deferred
compensation percentage for all eligible non-highly compensated employees. In
addition, rules similar to those applicable to 401(k) programs and salary
reduction TSAs apply to require distributions of excess elective deferrals and
excess contributions.
PENALTIES FOR EXCESS DEFERRALS
If an individual's aggregate elective deferrals under 401(k) plans, SIMPLE IRAs,
SARSEPs and TSAs exceed the permitted elective deferral limit in any taxable
year ($10,000 in 1999), the individual will be taxed twice on the excess
deferral -- once in the year of the deferral and again when a distribution
occurs. If the individual notifies the affected plan or plans and, by April 15
of the following year, receives a distribution of the excess deferral and
related income, the excess deferral will only be taxed in the year of deferral.
Any related income will be taxed in the year of the distribution. The
distribution of the excess deferral plus income is not treated as a withdrawal
of restricted funds, is not subject to the 10% penalty tax on early retirement
distributions and is not an eligible rollover distribution subject to 20%
mandatory federal income tax withholding. If excess deferrals remain in the
plan, the plan may be disqualified.
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REQUIRED MINIMUM DISTRIBUTIONS OPTION
If you elect this feature designed for annuitants age 70 1/2 or older, described
in the prospectus, each year we calculate your minimum distribution based on the
account value as of December 31 of the prior calendar year and then calculate
the minimum distribution amount based on the various choices you make.
You may choose whether the required minimum distribution will be calculated
based on your life expectancy alone, or based on the joint life expectancies of
you and your spouse. You may also choose (1) to have us recalculate your life
expectancy (or joint life expectancy) each year, or (2) not recalculate your
life expectancy. If you have chosen a joint life expectancy method of
calculation with your spouse, you may choose to either have both lives
recalculated or not recalculated.
When we recalculate life expectancy, that means that each calendar year we see
what each individual's life expectancy is under Treasury Regulations. If life
expectancy is not recalculated, it means that it is determined once, for the
initial year, and in every subsequent year that number is reduced by one more
year.
If you do not specify a method, IRS regulations require us to base a calculation
on your life expectancy alone, recalculating it each year. If you do not specify
that we should recalculate life expectancy, you cannot later apply your account
value to an annuity payout.
The minimum distribution calculation takes into account partial withdrawals made
during the current
4
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calendar year but prior to the date we determine your minimum distribution
amount, except that when the required minimum distribution is elected in the
year in which the annuitant attains age 71 1/2, no adjustment for partial
withdrawals will be made for any withdrawals made between January 1 and April 1
of the year in which the election is made.
Our required minimum distribution option should not be elected if the annuitant
continues to work beyond age 70 1/2 and contributions continue to be made into
the contract. To do so could result in an insufficient distribution. You must
request the amount to be separately calculated each year to ensure that you
withdraw the correct amount.
Please note that our required minimum distribution option does not provide for
all the flexibility provided by federal law. For example, federal law permits
you to recalculate your life expectancy and not your spouse's and to choose the
joint life expectancy method with a beneficiary other than your spouse. See your
tax adviser.
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ACCUMULATION UNIT VALUES
Unit values are determined at the end of each "valuation period" for each of the
variable investment options. A valuation period is each business day together
with any consecutive preceding non-business day. The unit values for EQUI-VEST
may vary. The method of calculating unit values is set forth below.
The unit value for a variable investment option for any valuation period is
equal to the unit value for the preceding valuation period multiplied by the
"net investment factor" for the variable investment option for that valuation
period. The net investment factor is:
(a/b) - c
where:
(a) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the valuation period before giving
effect to any amounts allocated to or withdrawn from the variable
investment options for the valuation period. For this purpose, we use the
share value reported to us by The Hudson River Trust. This share value is
after deduction for investment advisory fees and direct expenses of The
Hudson River Trust.
(b) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the preceding valuation period (after
any amounts allocated or withdrawn for that valuation period).
(c) is the daily Separate Account A asset charge for the expenses of the
contracts times the number of calendar days in the valuation period, plus
any charge for taxes or amounts set aside as a reserve for taxes.
CALCULATION OF ANNUITY PAYMENTS
The calculation of monthly annuity payments under a contract takes into account
the number of annuity units of each variable investment option credited under a
contract, their respective annuity unit values, and a net investment factor. The
annuity unit values used for EQUI-VEST may vary, although the method of
calculating annuity unit values set forth below applies to all contracts.
Annuity unit values will also vary by the variable investment option.
For each valuation period, the adjusted net investment factor is equal to the
net investment factor for the variable investment option reduced for each day in
the valuation period by:
o .00013366 of the net investment factor for a contract with an assumed base
rate of net investment return of 5% a year; or
o .00009425 of the net investment factor for a contract with an assumed base
rate of net investment return of 3 1/2%.
Because of this adjustment, the annuity unit value rises and falls depending on
whether the actual rate of net investment return (after charges) is higher or
lower than the assumed base rate.
The assumed base rate will be 5%, except in states where that rate is not
permitted. Annuity payments based upon an assumed base rate of 3 1/2% will at
first be smaller than those based upon a 5% assumed base rate. Payments based
upon a 3 1/2% rate, however, will rise more rapidly when unit values are rising,
and payments will fall more slowly when unit values are falling than those based
upon a 5% rate.
The amounts of variable annuity payments are determined as follows:
Payments normally start on the business day specified on your election form, or
on such other future date as specified therein. The first three monthly payments
are the same. The initial payment will be calculated using the basis guaranteed
in the applicable EQUI-VEST contract or our current basis, whichever would
provide the higher initial benefit.
The first three payments depend on the assumed base rate of net investment
return and the form of annuity chosen (and any fixed period). If the annuity
involves a life contingency, the risk class and the age of the annuitants will
affect payments.
Payments after the first three will vary according to the investment performance
of variable investment option(s) selected to fund the variable payments. After
that, each monthly payment will be calculated by multiplying the number of
annuity units credited by the average annuity unit value for the selected fund
for the second calendar month immediately preceding the due date of the payment.
The number of units is calculated by dividing the first monthly payment by the
annuity unit value for the valuation period which includes the due date of the
first monthly payment.
5
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The average annuity unit value is the average of the annuity unit values for the
valuation periods ending in that month.
Illustration of calculation of annuity payments
To show how we determine variable annuity payments, assume that the account
value for an EQUI-VEST Series 100 Contract on a retirement date is enough to
fund an annuity with a monthly payment of $100 and that the annuity unit value
of the selected variable investment option for the valuation period that
includes the due date of the first annuity payment is $3.74. The number of
annuity units credited under the contract would be 26.74 (100 divided by 3.74 =
26.74). Based on a hypothetical average annuity unit value of $3.56 in October
1998, the annuity payment due in December 1998 would be $95.19 (the number of
units (26.74) times $3.56).
The examples below show what the annuity payment would have been for December
31, 1998 for each base rate of net investment return, assuming that $100,000 was
applied at the beginning of each period shown, for a female age 75, to purchase
a variable Life Annuity with 10 Years Period Certain, with initial payment of
$714.56 and $793.28, using assumed base rates of 3.50% and 5.00%, respectively:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
BASE RATE YEAR YEARS YEARS YEARS INCEPTION
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance 3.50% $717.08 $ 723.09 $ 722.91 $ 760.89 --
Money Market 5.00% $787.10 $ 771.08 $ 748.70 $ 734.70 --
Alliance Intermediate 3.50% $740.77 $ 749.02 $ 737.66 -- $ 845.92
Government Securities 5.00% $813.09 $ 798.73 $ 764.12 -- $ 841.79
Alliance 3.50% $743.96 $ 776.91 $ 784.09 -- $ 770.85
Quality Bond 5.00% $816.60 $ 828.48 $ 812.22 -- $ 795.60
Alliance 3.50% $632.69 $ 836.31 $ 885.99 $1,247.57 $1,302.13
High Yield 5.00% $694.38 $ 891.83 $ 917.78 $1,201.43 $1,217.98
Alliance 3.50% $693.20 $ 958.26 $1,074.25 -- $1,058.78
Growth & Income 5.00% $760.86 $1,021.82 $1,112.75 -- $1,092.75
Alliance 3.50% $756.76 $1,115.00 -- -- $1,408.99
Equity Index 5.00% $830.83 $1,188.98 -- -- $1,463.00
Alliance 3.50% $731.14 $1,065.71 $1,254.52 $2,023.07 --
Common Stock 5.00% $802.51 $1,136.41 $1,300.15 $1,957.01 --
Alliance 3.50% $697.40 $ 809.60 $ 919.90 $1,478.55 $1,332.96
Global 5.00% $765.47 $ 863.32 $ 952.87 $1,423.80 $1,258.62
Alliance 3.50% $678.20 $ 655.67 -- -- $ 700.53
International 5.00% $744.40 $ 699.17 -- -- $ 739.04
Alliance 3.50% $571.22 $ 702.42 $ 809.21 $2,095.89 --
Aggressive Stock 5.00% $626.97 $ 749.03 $ 837.21 $2,010.32 --
Alliance 3.50% $543.49 -- -- -- $ 572.33
Small Cap Growth 5.00% $596.55 -- -- -- $ 623.67
Alliance 3.50% $737.39 $ 797.72 $ 837.07 -- $1,051.75
Conservative Investors 5.00% $809.37 $ 850.66 $ 867.09 -- $1,024.01
Alliance 3.50% $731.70 $ 853.32 $ 853.79 $1,312.02 --
Balanced 5.00% $803.12 $ 909.95 $ 884.79 $1,268.64 --
Alliance 3.50% $716.91 $ 856.11 $ 952.24 -- $1,609.21
Growth Investors 5.00% $786.89 $ 912.92 $ 986.38 -- $1,566.76
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</TABLE>
THE REORGANIZATION
Equitable Life established Separate Account A as a stock account on August 1,
1968. It was one of four separate investment accounts used to fund retirement
benefits under variable annuity certificates issued by us. Each of these
separate accounts, which included the predecessors to the Alliance Money Market
Fund, Alliance Balanced Fund, Alliance Common Stock Fund and Alliance Aggressive
Stock Fund, was organized as an open-end management investment company, with its
own investment objectives and policies. Collectively these separate accounts, as
well as two other separate accounts which had been used to fund retirement
benefits under certain other annuity contracts, are called the "predecessor
separate accounts."
On December 18, 1987, the predecessor separate accounts were combined in part
and reorganized into the Alliance Money Market, Alliance Balanced, Alliance
Common Stock and Alliance Aggressive Stock Funds of Separate Account A. In
connection with the Reorganization, all of the assets and
6
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investment-related liabilities of the predecessor separate accounts were
transferred to a corresponding portfolio of The Equitable Trust in exchange for
shares of the portfolios of The Equitable Trust, which were issued to these
corresponding Funds of Separate Account A. On September 6, 1991, all of the
shares of The Equitable Trust held by these Funds were replaced by shares of
Portfolios of The Hudson River Trust corresponding to these Funds of Separate
Account.
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CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable Life is the custodian for the shares of The Hudson River Trust and EQ
Advisors Trust owned by the variable annuity options.
The financial statements of Separate Account A as at December 31, 1998 and for
the periods ended December 31, 1998 and 1997, and the consolidated financial
statements of Equitable Life as at December 31, 1998 and 1997 and for each of
the three years ended December 31, 1998 included in this SAI have been so
incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of such firm as experts in
accounting and auditing.
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ALLIANCE MONEY MARKET OPTION YIELD
INFORMATION
The Alliance Money Market option calculates yield information for seven-day
periods. To determine the seven-day rate of return, the net change in a unit
value is computed by subtracting the unit value at the beginning of the period
from the unit value, exclusive of capital changes, at the end of the period.
The net change is then reduced by the average administrative charge factor for
your contract. This reduction is made to recognize the deduction of the annual
administrative charge, which is not reflected in the unit value. See the
applicable "Annual administrative charge" section under "Charges and expenses"
in the prospectus. Unit values reflect all other accrued expenses of the
Alliance Money Market option.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain the adjusted base period rate of return. This seven-day
adjusted base period return is then multiplied by 365/7 to produce an annualized
seven-day current yield figure carried to the nearest one-hundredth of one
percent.
The actual dollar amount of the annual administrative charge for EQUI-VEST that
is deducted form the Alliance Money Market option will vary for each contract
and the percentage of the aggregate account value allocated to the Alliance
Money Market option.
To determine the effect of the annual administrative charge on the yield, we
start with the actual aggregate annual administrative charges, as a percentage
of total assets held under EQUI-VEST. This amount is multiplied by 365/7 to
produce an average administrative charge factor which is used in weekly yield
computations for the ensuing year. The average administrative charge is then
divided by the number of Alliance Money Market option units for the EQUI-VEST
series contract as of the end of the prior calendar year, and the resulting
quotient is deducted from the net change in unit value for the seven-day period.
The effective yield is obtained by modifying the current yield to give effect to
the compounding nature of the Alliance Money Market option's investments, as
follows: the unannualized adjusted base period return is compounded by adding
one to the adjusted base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result, i.e., effective yield = (base
period return + 1)365/7 - 1. The Alliance Money Market option yields will
fluctuate daily. Accordingly, yields for any given period are not necessarily
representative of future results. In addition, the value of units of the
Alliance Money Market option will fluctuate and not remain constant.
The Alliance Money Market option yields reflect charges that are not normally
reflected in the yields of other investments and therefore may be lower when
compared with yields of other investments. Alliance Money Market option yields
should not be compared to the return on fixed-rate investments which guarantee
rates of interest for specified periods, such as the guaranteed interest account
or bank deposits. The yield should not be compared to the yield of money market
funds made available to the general public because their yields usually are
calculated on the basis of a constant $1 price per share and they pay out
earnings in dividends which accrue on a daily basis.
While the Alliance Money Market option yields will vary among the different
EQUI-VEST contracts, the same method of calculating Alliance Money Market option
yields applies. The seven-day current yield and effective yield figures set
forth below reflect the highest charges that are currently being assessed under
any EQUI-VEST contract and are for illustrative purposes only.
The seven-day current yield for the Alliance Money Market option was 3.30% for
EQUI-VEST Series 100 and 200 and 3.35% for Series 300 and 400 and 3.26% for
Series 600 for the period ended December 31, 1998. The effective yield for the
Alliance Money Market option for that period was 3.36% for EQUI-VEST Series 100
and 200 and 3.40% for Series 300 and 400 and 3.31% for Series 600. Because these
yields reflect the deduction of Separate Account A expenses, including the
annual or annuity administrative
7
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charge, they are lower than the corresponding yield figures for the Alliance
Money Market Portfolio which reflect only the deduction of Trust-level expenses.
OTHER YIELD INFORMATION
Thirty-day yields may vary according to the series of your EQUI-VEST contract,
although the same method of calculating variable investment option yields
applies. The yield figures set forth below reflect the highest charges that are
currently being assessed under any series of EQUI-VEST contract.
The effective yield is obtained by giving effect to the compounding nature of
the variable investment option's investments, as follows: the sum of the 30-day
adjusted return, plus one, is raised to a power equal to 365 divided by 30, and
subtracting one from the result.
The 30-day yields for EQUI-VEST Series 100, 200, 300 and 400 Contracts for the
period ended December 31, 1998 were 3.38% for the Alliance Intermediate
Government Securities option, 3.76% for the Alliance Quality Bond option and
13.13% for the Alliance High Yield option. The 30-day yields for EQUI-VEST
Series 600 Contracts for the period ended December 31, 1998 were 3.27% for the
Alliance Intermediate Government Securities option, 3.65% for the Alliance
Quality Bond option and 13.03% for the Alliance High Yield option. Because these
yields reflect the deduction of Separate Account A expenses, including the
annual administrative charge, they are lower than the yield figures for the
corresponding Portfolios which reflect only the deduction of Trust-level
expenses.
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KEY FACTORS IN RETIREMENT PLANNING
INTRODUCTION
Equitable Life offers retirement programs that are available to help meet the
retirement needs of individuals and of employers, businesses, and certain
tax-exempt organizations. In assessing these retirement needs, some key factors
need to be addressed: (1) the impact of inflation on fixed retirement incomes;
(2) the importance of starting to plan early for retirement; (3) the benefits of
tax deferral; and (4) the selection of an appropriate investment strategy. Each
of these factors is addressed below.
Unless otherwise noted, all of the following presentations use an assumed annual
rate of return of 7.5% compounded annually. This rate of return is for
illustrative purposes only and is not intended to represent an expected or
guaranteed rate of return for any investment vehicle. In addition, unless
otherwise noted, none of the illustrations reflect any charges that may be
applied under a particular investment vehicle. Such charges would effectively
reduce the actual return under any investment vehicle.
All earnings in these presentations are assumed to accumulate tax deferred
unless otherwise noted. Most programs designed for retirement savings offer tax
deferral. Amounts withdrawn generally are taxable and a 10% penalty tax may
apply to premature withdrawals. Certain retirement programs prohibit early
withdrawals. See "Tax Information" in the prospectus. Where taxes are taken into
consideration in these presentations, a 28% tax rate is assumed.
The source of the data used by us to compile the charts which appear in this
section (other than charts 1, 2, 3 and 4) is Ibbotson Associates, Inc., Chicago,
Stocks, Bonds, Bills and Inflation 1999 Yearbook.(TM) All rights reserved.
In reports or other communications or in advertising material, we may make use
of these or other graphic or numerical illustrations that we prepare showing the
impact of inflation, planning early for retirements, tax deferral,
diversification and other concepts important to retirement planning.
INFLATION
Inflation erodes purchasing power. This means that, in an inflationary period,
the dollar is worth less as time passes. Because many people live on a fixed
income during retirement, inflation is of particular concern to them. The charts
on the next page illustrate the detrimental impact of inflation over an extended
period of time. Between 1968 and 1998, the average annual inflation rate was
5.24%. As demonstrated in Chart 1, this 5.24% average annual rate of inflation
would cause the purchasing power of $35,000 to decrease to only $7,562 after 30
years.
In Chart 2, the impact of inflation is examined from another perspective.
Specifically, the chart illustrates the additional income needed to maintain the
purchasing power of $35,000 over a thirty-year period. Again, the 1968-1998
historical inflation rate of 5.24% is used. In this case, an additional $126,992
would be required to maintain the purchasing power of $35,000 after 30 years.
8
<PAGE>
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CHART 1
[THE FOLLOWING DATA WAS REPRESENTED AS A
SHADED VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
(Income)
Today 35,000
10 Years 21,002
20 Years 12,602
30 Years 7,562
[END OF GRAPHICALLY REPRESENTED DATA]
CHART 2
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
Annual
Income Increase
Needed Needed
Today 35,000 -
10 Years 58,328 23,325
20 Years 97,204 62,204
30 Years 161,992 126,992
[END OF GRAPHICALLY REPRESENTED DATA]
STARTING EARLY
The impact of inflation accentuates the need to begin a retirement program
early. The value of starting early is illustrated in the following charts. As
shown in Chart 3, if an individual makes annual contributions of $2,500 to his
retirement program beginning at age 30, he would accumulate $414,551 by age 65
under the assumptions described earlier. If that individual waited until age 50,
he would only accumulate $70,193 by age 65 under the same assumptions.
CHART 3
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
AREA GRAPH IN THE PRINTED DOCUMENT:]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
[BLACK:] Age 50 $0 $0 $0 $0 $0 $15,610 $38,020 $70,193
[WHITE:] Age 40 $0 $0 $0 $15,610 $38,020 $70,193 $116,381 $182,691
[GRAY:] Age 30 $0 $15,610 $38,020 $70,193 $116,381 $182,691 $277,886 $414,551
</TABLE>
[END OF GRAPHICALLY REPRESENTED DATA]
In Table 1, the impact of starting early is demonstrated in another format. For
example, if an individual invests $300 monthly, he would accumulate $387,193 in
thirty years under our assumptions. In contrast, if that individual invested the
same $300 per month for 15 years, he would accumulate only $97,804 under our
assumptions.
TABLE 1
- -------------------------------------------------------------
MONTHLY
CONTRI- YEAR YEAR YEAR YEAR YEAR
BUTION 10 15 20 25 30
$ 20 $ 3,532 $ 6,520 $ 10,811 $ 16,970 $ 25,813
50 8,829 16,301 27,027 42,425 64,532
100 17,659 32,601 54,053 84,851 129,064
200 35,317 65,202 108,107 169,701 258,129
300 52,976 97,804 162,160 254,552 387,193
- -------------------------------------------------------------
Chart 4 presents an additional way to demonstrate the significant impact of
starting to make contributions to a retirement program earlier rather than
later. It assumes that an individual had a goal to accumulate $250,000 (pre-tax)
by age 65. If he starts at age 30, under our assumptions he could reach the goal
by making a monthly pre-tax contribution of $130 (equivalent to $93 after
taxes). The total net cost for the 30-year-old in this hypothetical example
would be $39,265. If the individual in this hypothetical example waited until
age 50, he would have to make a monthly pre-tax contribution of $747 (equivalent
to $552 after taxes) to attain the goal, illustrating the importance of starting
early.
9
<PAGE>
- --------------------------------------------------------------------------------
CHART 4
[THE FOLLOWING DATA WAS REPRESENTED AS A BLACK AND WHITE
VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
GOAL: $250,000 BY AGE 65
Tax Savings
and Tax-deferred
Net Cost Earnings at 7.5%
$93 per month Age 30 $ 39,265 $ 210,735
$212 per month Age 40 63,641 186,359
$552 per month Age 50 99,383 150,617
[END OF GRAPHICALLY REPRESENTED DATA]
TAX DEFERRAL
Contributing to a retirement plan early is part of an effective strategy for
addressing the impact of inflation. Another part of such a strategy is to
carefully select the types of retirement programs in which to invest. In
deciding where to invest retirement contributions, there are three basic types
of programs.
The first type offers the most tax benefits and, therefore, is potentially the
most beneficial for accumulating funds for retirement. Contributions are made
with pre-tax dollars or are tax deductible and earnings grow income tax
deferred. Examples of this type of program that permit individuals to make
contributions through personal savings or indirectly through employer-offered
salary deferrals are deductible Individual Retirement Annuities (IRAs);
Tax-Sheltered Annuities (TSAs); Employee Deferred Compensation plans (EDCs);
401(k) plans; Salary Reduction Simplified Employee Pensions (SARSEPs); and
SIMPLE IRAs.
Of course, not every individual is eligible to take advantage of these programs.
Examples of this type of program which are employer funded are qualified defined
contribution plans, SEPs and HR-10 (Keogh) Plans.
The second type of program also provides for tax-deferred earnings growth;
however, contributions are made with after-tax dollars. Examples of this type of
program are non-deductible Traditional IRAs and non-qualified annuities.
The third approach to retirement savings is fully taxable. Contributions are
made with after-tax dollars and earnings are taxed each year. Examples of this
type of program include certificates of deposit, savings accounts and taxable
stock, bond or mutual fund investments.
Consider an example. For the type of retirement program that offers both pre-tax
contributions and tax deferral, assume that a $2,500 annual pre-tax contribution
is made for thirty years. In this example, the retirement funds would be
$199,607 after thirty years (assuming a 7.5% rate of return, no withdrawals and
assuming the deduction of a 1.75% Separate Account daily asset and Trust annual
expense charges and a $30 administrative charge -- but no withdrawal charge) and
such funds would be $277,886 without the effect of any charges. Assuming a lump
sum withdrawal was made in year thirty and a 28% tax bracket, these amounts
would be $143,717 and $200,078, respectively.
For the type of program that offers only tax deferral, assume an after-tax
annual contribution of $1,800 for thirty years and the same rate of return. This
after-tax contribution is derived by taxing the $2,500 pre-tax contribution,
again assuming a 28% tax bracket. In this example, the retirement funds would be
$143,468 after thirty years assuming the deduction of charges and no
withdrawals, and $200,078 without the effect of charges. Assuming a lump sum
withdrawal in year thirty, the total after-tax amount would be $118,417 with
charges deducted and $159,176 without charges.
For the fully taxable investment, assume an after-tax contribution of $1,800 for
thirty years. Earnings are taxed annually. After thirty years, the amount of
this fully taxable investment is $135,058. Keep in mind that taxable investments
have fees and charges, too (investment advisory fees, administrative charges,
12b-1 fees, sales loads, brokerage commissions, etc). We have not attempted to
apply these fees and charges to the fully taxable amounts since this is intended
merely as an example of tax deferral. Were such charges applied, the amounts in
the fully taxable example would be lower. Again, it must be emphasized that the
assumed rate of return of 7.5% compounded annually used in these examples is for
illustrative purposes only and is not intended to represent a guaranteed or
expected rate of return on any investment vehicle. Moreover, early withdrawals
of tax-deferred investments are generally subject to a 10% penalty tax.
INVESTMENT OPTIONS
Selecting an appropriate retirement program is clearly an important part of an
effective retirement planning strategy. Carefully choosing among investment
options is another essential component.
As demonstrated in Chart 5, during the 1968-1998 period, common stock average
annual returns outperformed the average annual returns of fixed investments,
such as long-term government bonds and Treasury Bills (T-bills). See "Notes" at
the end
10
<PAGE>
- --------------------------------------------------------------------------------
of this section. Common stocks earned an average annual return of 12.67%
over this period, in contrast to 9.09% and 6.76% for the other two investment
categories, respectively. Significantly, common stock returns also outpaced
inflation, which grew at 5.24% over this period.
CHART 5
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
VERTICAL BAR GRAPH IN THE PRINTED DOCUMENT:]
Average Annual Returns
1968-1998
Inflation 5.24%
T-bills 6.76%
Long-Term Government Bonds 9.09%
Common Stock (S&P 500) 12.67%
[END OF GRAPHICALLY REPRESENTED DATA]
While Chart 5 illustrates that investments in common stocks outperformed
fixed-income investments for the 1968-1998 period, many people prefer to
diversify their investments by selecting a mix of fixed-income and growth
investments. In Chart 6, the growth of a $1,000 investment is shown given
various mixes of fixed-income and growth investments. See "Notes" at the end of
this section.
CHART 6
[THE FOLLOWING DATA WAS REPRESENTED AS A SHADED
VERTICAL BAR GRAPH IN THE TYPESET DOCUMENT:]
Growth of $1,000
1968-1998
100% T-bills $7,113
70% Long-Term Government Bonds/30% Common Stock $19,579
50% Long-Term Government Bonds/50% Common Stock $24,118
100% Common Stock $35,814
[END OF GRAPHICALLY REPRESENTED DATA]
NOTES
1. Common Stocks: Standard & Poor's (S&P) Composite Index is an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies. Results shown assume reinvestment of
dividends. Both market value and return on common stock will vary.
2. U.S. Government Securities: Long-term Government Bonds are measured using a
one-bond portfolio constructed each year containing a bond with
approximately a 20-year maturity and a reasonably current coupon. U.S.
Treasury Bills are measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month. U.S. Government securities are guaranteed
as to principal and interest and, if held to maturity, offer a fixed rate
of return.
However, market value and return on such securities will fluctuate prior to
maturity.
EQUI-VEST(R) can be effective for diversifying ongoing investments between
various asset categories. In addition, for individuals investing a lump sum,
special features are offered which help address the risk associated with timing
the equity markets. Specifically, an interest sweep function is offered whereby
an individual can initially contribute a lump sum in the guaranteed interest
option and then sweep the interest generated by the
11
<PAGE>
- --------------------------------------------------------------------------------
investment into any of the growth-oriented options over a specified period of
time. In addition, a fixed-dollar transfer function is offered whereby an
individual can contribute a lump sum in the guaranteed interest option and then
transfer a fixed-dollar amount into the growth-oriented options over a specified
period of time. Neither of these features can guarantee a profit or assure
against loss in a declining market.
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return trends
for various types of securities. The information presented, while not directly
related to the performance of the Investment Options, helps to provide a
perspective on the potential returns of different asset classes over different
periods of time. By combining this information with your knowledge of your own
financial needs (e.g., the length of time until you retire, your financial
requirements at retirement), you may be able to better determine how you wish to
allocate plan contributions among the investment options available under your
plan.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long- or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus is
on long-term growth potential and protection against inflation, there may be
advantages to allocating some or all of their account value to those variable
investment options that invest in stocks.
Growth of $1 Invested on January 1, 1958
(Values are as of last business day)
[THE FOLLOWING DATA WAS REPRESENTED AS A
SHADED AREA GRAPH IN THE PRINTED DOCUMENT:]
Common Stock Inflation
1958 1.00 1.00
1959 1.12 1.01
1960 1.12 1.03
1961 1.43 1.04
1962 1.30 1.05
1963 1.60 1.07
1964 1.86 1.08
1965 2.10 1.10
1966 1.88 1.14
1967 2.34 1.17
1968 2.59 1.23
1969 2.37 1.30
1970 2.47 1.37
1971 2.82 1.42
1972 3.36 1.47
1973 2.87 1.60
1974 2.11 1.79
1975 2.89 1.92
1976 3.58 2.01
1977 3.32 2.15
1978 3.54 2.34
1979 4.19 2.65
1980 5.55 2.98
1981 5.28 3.25
1982 6.41 3.37
1983 7.86 3.50
1984 8.35 3.64
1985 11.03 3.78
1986 13.07 3.82
1987 13.75 3.99
1988 16.07 4.16
1989 21.13 4.36
1990 20.46 4.62
1991 26.74 4.76
1992 28.75 4.90
1993 31.63 5.04
1994 32.04 5.17
1995 44.03 5.30
1996 54.19 5.48
1997 72.27 5.57
1998 92.93 5.67
[LIGHT SHADED AREA = COMMON STOCK]
[DARK SHADED AREA = INFLATION]
[END OF GRAPHICALLY REPRESENTED DATA]
Over shorter periods of time, however, common stocks tend to be subject to more
dramatic changes in value than fixed-income (debt) securities. Investors who are
nearing retirement age, or who have a need to limit short-term risk, may find it
preferable to allocate a smaller percentage of their account value to those
variable investment options that invest in common stocks. The following graph
illustrates the monthly fluctuations in value of $1 based on monthly returns of
the Standard & Poor's 500 during 1990, a year that reflects the volatility
inherent in the investment of common stocks.
Growth of $1 invested on January 1, 1990
(Values are as of last business day)
[THE FOLLOWING DATA WAS REPRESENTED AS A BLACK AND WHITE LINE GRAPH
IN THE PRINTED DOCUMENT:]
Intermediate-Term
Govt. Bonds Common Stocks
1/1/90 1.00 1.00
Jan. 0.99 0.93
Feb. 0.99 0.94
Mar. 0.99 0.97
Apr. 0.98 0.95
May 1.01 1.04
June 1.02 1.03
July 1.04 1.03
Aug. 1.03 0.93
Sep. 1.04 0.89
Oct. 1.06 0.89
Nov. 1.08 0.94
Dec. 1.10 0.97
[END OF GRAPHICALLY REPRESENTED DATA]
12
<PAGE>
- --------------------------------------------------------------------------------
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1998 for different types
of securities: common stocks, long-term government bonds, long-term corporate
bonds, intermediate-term government bonds and U.S. Treasury Bills. For
comparison purposes, the Consumer Price Index is shown as a measure of
inflation. The average annual returns shown in the chart reflect capital
appreciation and assume the reinvestment of dividends and interest. No
investment management fees or expenses, and no charges typically associated with
deferred annuity products, are reflected. The information presented is merely a
summary of past experience for unmanaged groups of securities and is neither an
estimate nor guarantee of future performance. Any investment in securities,
whether equity or debt, involves varying degrees of potential risk, in addition
to offering varying degrees of potential reward.
The rates of return illustrated do not represent returns of Separate Account A.
In addition, there is no assurance that the performance of the investment
options will correspond to rates of return such as those illustrated in the
chart.
For a comparative illustration of performance results of the options (which
reflect The Hudson River Trust and Separate Account A charges), see "Investment
Performance" in the prospectus or the Trust prospectuses for The Hudson River
Trust and EQ Advisors Trust (which do not reflect Separate Account A charges).
13
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
- -------------------------------------------------------------------------------------------------------------------------------
LONG-TERM LONG-TERM INTERMEDIATE- U.S.
FOR THE FOLLOWING PERIODS COMMON GOVERNMENT CORPORATE TERM GOV'T. TREASURY CONSUMER
ENDING DECEMBER 31, 1998 STOCKS BONDS BONDS BONDS BILLS PRICE INDEX
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 28.58% 13.06% 10.76% 10.21% 4.86% 1.80%
3 Years 28.27 9.07 8.25 6.84 5.11 2.27
5 Years 24.06 9.52 8.74 6.20 4.96 2.41
10 Years 19.19 11.66 10.85 8.74 5.29 3.14
20 Years 17.75 11.14 10.86 9.85 7.17 4.53
30 Years 12.67 9.09 9.14 8.71 6.76 5.24
40 Years 12.00 7.20 7.43 7.39 5.94 4.44
50 Years 13.56 5.89 6.20 6.21 5.07 3.92
60 Years 12.49 5.43 5.62 5.50 4.26 4.19
Since 12/31/26 11.21 5.29 5.78 5.32 3.78 3.15
Inflation Adjusted Since 1926 7.82 2.08 2.55 2.11 0.62 --
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE: Ibbotson, Roger G., and Rex A. Sinquefield, Stocks, Bonds, Bills,
and Inflation (SBBI), 1982, updated in Stocks, Bonds, Bills and Inflation
1999 Yearbook,(TM) Ibbotson Associates, Inc., Chicago. All rights reserved.
COMMON STOCKS (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
LONG-TERM GOVERNMENT BONDS -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
LONG-TERM CORPORATE BONDS -- For the period 1969-1998, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers Index was backdated using Salomon Brothers
monthly yield data and a methodology similar to that used by Salomon Brothers
for 1969-1998; for the period 1927-1945, the Standard and Poor's monthly
High-Grade Corporate Composite yield data were used, assuming a 4 percent coupon
and a twenty-year maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. TREASURY BILLS -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
INFLATION -- Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The consolidated financial statements of The Equitable included herein should be
considered only as bearing upon the ability of Equitable Life to meet its
obligations under the contracts.
14
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
<S> <C>
Report of Independent Accountants.................................................................................. FSA-2
Financial Statements:
Statements of Assets and Liabilities, December 31, 1998...................................................... FSA-3
Statements of Operations for the Year Ended December 31, 1998................................................ FSA-6
Statements of Changes in Net Assets for the Years Ended December 31, 1998 and 1997........................... FSA-9
Notes to Financial Statements................................................................................ FSA-16
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants.................................................................................. F-1
Consolidated Financial Statements:
Consolidated Balance Sheets, December 31, 1998 and 1997...................................................... F-2
Consolidated Statements of Earnings, Years Ended December 31, 1998, 1997 and 1996............................ F-3
Consolidated Statements of Shareholder's Equity, Years Ended December 31, 1998,
1997 and 1996............................................................................................. F-4
Consolidated Statements of Cash Flows, Years Ended December 31, 1998, 1997 and 1996.......................... F-5
Notes to Consolidated Financial Statements................................................................... F-6
</TABLE>
FSA-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Contractowners of Separate Account A
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the Alliance Money Market Fund,
Alliance Intermediate Government Securities Fund, Alliance Quality Bond Fund,
Alliance High Yield Fund, Alliance Growth & Income Fund, Alliance Equity Index
Fund, Alliance Common Stock Fund, Alliance Global Fund, Alliance International
Fund, Alliance Aggressive Stock Fund, Alliance Small Cap Growth Fund, Alliance
Conservative Investors Fund, Alliance Growth Investors Fund, Alliance Balanced
Fund ("Hudson River Trust funds") and the T. Rowe Price Equity Income Fund,
EQ/Putnam Growth & Income Value Fund, Merrill Lynch Basic Value Equity Fund, MFS
Research Fund, T. Rowe Price International Stock Fund, Morgan Stanley Emerging
Markets Equity Fund, Warburg Pincus Small Company Value Fund, MFS Emerging
Growth Companies Fund, EQ/Putnam Balanced Fund, and Merrill Lynch World Strategy
Fund ("EQ Advisors Trust funds"), separate investment funds of The Equitable
Life Assurance Society of the United States ("Equitable Life") Separate Account
A at December 31, 1998 and the results of each of their operations and changes
in each of their net assets for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of Equitable Life's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of shares owned in The Hudson River Trust
and in The EQ Advisors Trust at December 31, 1998 with the transfer agent,
provide a reasonable basis for the opinion expressed above. The unit value
information presented in Note 6 for the year ended December 31, 1992 and for
each of the periods indicated prior thereto, were audited by other independent
accountants whose report dated February 16, 1993 expressed an unqualified
opinion on the financial statements containing such information.
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
FSA-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
--------------------------------------------------------------
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH
MARKET SECURITIES BOND YIELD
FUND FUND FUND FUND
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $126,393,531.................................... $126,082,971
52,884,907.................................... $53,855,750
81,574,491.................................... $81,903,603
234,155,055.................................... $198,398,150
132,387,446....................................
68,826,963....................................
507,038,678....................................
860,530,108....................................
Receivable for Trust shares sold............................ -- -- -- --
Due from Equitable Life's General Account
(Note 3)................................................. 443,930 94,544 181,937 255,904
------------ ------------ ------------ -------------
Total assets........................................ 126,526,901 53,950,294 82,085,540 198,654,054
------------ ------------ ------------ -------------
LIABILITIES:
Payable for Trust shares purchased......................... 440,784 96,954 173,181 263,793
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 179,001 351,346 445,982 206,805
------------ ------------ ------------ -------------
Total liabilities................................... 619,785 448,300 619,163 470,598
------------ ------------ ------------ -------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $125,907,116 $53,501,994 $81,466,377 $198,183,456
============ ============ ============ =============
<CAPTION>
EQUITY SERIES:
-------------------------------------------------------------------
EQ/
T.ROWE PRICE PUTNAM ALLIANCE ALLIANCE
EQUITY GROWTH & GROWTH & EQUITY
INCOME INCOME VALUE INCOME INDEX
FUND FUND FUND FUND
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $126,393,531....................................
52,884,907....................................
81,574,491....................................
234,155,055....................................
132,387,446.................................... $139,978,924
68,826,963.................................... $74,988,792
507,038,678.................................... $599,468,994
860,530,108................................... $1,153,005,368
Receivable for Trust shares sold............................ -- -- -- --
Due from Equitable Life's General Account
(Note 3)................................................. 1,106,116 672,410 1,904,968 11,149,643
------------ ----------- ------------ --------------
Total assets........................................ 141,085,040 75,661,202 601,373,962 1,164,155,011
------------ ----------- ------------ --------------
LIABILITIES:
Payable for Trust shares purchased......................... 1,106,116 672,410 1,608,787 11,151,657
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 163,834 162,192 742,644 715,187
------------ ----------- ------------ --------------
Total liabilities................................... 1,269,950 834,602 2,351,431 11,866,844
------------ ----------- ------------ --------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $139,815,090 $74,826,600 $599,022,531 $1,152,288,167
============ =========== ============ ==============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-------------------------------------------------------------------
MERRILL
LYNCH ALLIANCE
BASIC VALUE COMMON MFS ALLIANCE
EQUITY STOCK RESEARCH GLOBAL
FUND FUND FUND FUND
------------ -------------- -------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 56,223,556............................. $57,472,290
5,604,901,871............................. $7,729,532,779
88,527,561............................. $102,398,515
609,414,934............................. $727,190,716
127,648,223.............................
66,625,462.............................
17,147,883.............................
3,378,240,751.............................
Receivable for Trust shares sold........................... -- -- -- 568,149
Due from Equitable Life's General Account
(Note 3)................................................. 556,978 5,851,659 4,489,476 --
----------- -------------- ------------ -------------
Total assets........................................ 58,029,268 7,735,384,438 106,887,991 727,758,865
----------- -------------- ------------ -------------
LIABILITIES:
Payable for Trust shares purchased.......................... 556,953 5,468,912 4,489,434 --
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- 600,419
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 119,600 4,142,124 148,866 358,278
----------- -------------- ------------ -------------
Total liabilities................................... 676,553 9,611,036 4,638,300 958,697
----------- -------------- ------------ -------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $57,352,715 $7,725,773,402 $102,249,691 $726,800,168
=========== ============== ============ =============
<CAPTION>
EQUITY SERIES (CONTINUED):
------------------------------------------------------------------
T.ROWE MORGAN
PRICE STANLEY
INTER- EMERGING ALLIANCE
ALLIANCE NATIONAL MARKETS AGGRESSIVE
INTERNATIONAL STOCK EQUITY STOCK
FUND FUND FUND FUND
------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 56,223,556.............................
5,604,901,871.............................
88,527,561.............................
609,414,934.............................
127,648,223............................. $130,220,038
66,625,462............................. $73,881,887
17,147,883............................. $16,084,234
3,378,240,751............................. $3,168,974,945
Receivable for Trust shares sold........................... 211,881 -- -- 6,354,007
Due from Equitable Life's General Account
(Note 3)................................................. -- 179,720 115,594 --
------------ ----------- ----------- --------------
Total assets........................................ 130,431,919 74,061,607 16,199,828 3,175,328,952
------------ ----------- ----------- --------------
LIABILITIES:
Payable for Trust shares purchased.......................... -- 179,720 115,594 --
Due to Equitable Life's General Account
(Note 3)................................................. 216,890 -- -- 6,160,056
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 193,242 90,602 3,574,314 670,310
------------ ----------- ----------- --------------
Total liabilities................................... 410,132 270,322 3,689,908 6,830,366
------------ ----------- ----------- --------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $130,021,787 $73,791,285 $12,509,920 $3,168,498,586
============ =========== =========== ==============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSET
ALLOCATION
EQUITY SERIES (CONCLUDED): SERIES
----------------------------------------------- ---------------
MFS
WARBURG PINCUS ALLIANCE EMERGING ALLIANCE
SMALL COMPANY SMALL CAP GROWTH CONSERVATIVE
VALUE GROWTH COMPANIES INVESTORS
FUND FUND FUND FUND
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 97,621,394............................ $90,331,538
128,288,230............................ $139,300,122
141,554,053............................ $177,252,578
111,402,771............................ $120,069,941
32,776,608............................
739,431,816............................
1,207,545,862............................
10,547,792............................
Receivable for Trust shares sold........................... -- 1,068,050 -- --
Due from Equitable Life's General Account
(Note 3)................................................. 680,223 -- 2,139,886 181,219
----------- ------------ ------------ ------------
Total assets........................................ 91,011,761 140,368,172 179,392,464 120,251,160
----------- ------------ ------------ ------------
LIABILITIES:
Payable for Trust shares purchased......................... 680,223 -- 2,139,886 182,458
Due to Equitable Life's General Account
(Note 3)................................................. -- 1,051,042 -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 128,730 410,448 49,828 205,350
----------- ------------ ------------ ------------
Total liabilities................................... 808,953 1,461,490 2,189,714 387,808
----------- ------------ ------------ ------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $90,202,808 $138,906,682 $177,202,750 $119,863,352
<CAPTION>
ASSET ALLOCATION SERIES (CONTINUED):
---------------------------------------------------------------
MERRILL
EQ/ ALLIANCE LYNCH
PUTNAM GROWTH ALLIANCE WORLD
BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND
----------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 97,621,394............................
128,288,230............................
141,554,053............................
111,402,771............................
32,776,608............................ $34,787,837
739,431,816............................ $842,909,418
1,207,545,862............................ $1,322,780,470
10,547,792............................ $11,042,248
Receivable for Trust shares sold........................... -- -- 869,867 --
Due from Equitable Life's General Account
(Note 3)................................................. 344,836 1,901,167 -- 83,668
----------- ------------ -------------- -----------
Total assets........................................ 35,132,673 844,810,585 1,323,650,337 11,125,916
----------- ------------ -------------- -----------
LIABILITIES:
Payable for Trust shares purchased......................... 344,836 1,905,292 -- 83,668
Due to Equitable Life's General Account
(Note 3)................................................. -- -- 728,517 --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 147,171 687,262 186,147 1,772,681
----------- ------------ -------------- -----------
Total liabilities................................... 492,007 2,592,554 914,664 1,856,349
----------- ------------ -------------- -----------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $34,640,666 $842,218,031 $1,322,735,673 $ 9,269,567
=========== ============ ============== ===========
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
-----------------------------------------------------------------
ALLIANCE
INTER-
ALLIANCE MEDIATE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH
MARKET SECURITIES BOND YIELD
FUND FUND FUND FUND
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $5,255,399 $2,342,433 $3,395,859 $ 20,512,530
---------- ---------- ---------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,481,147 587,870 794,815 2,600,402
Less: Reduction for expense limitation...................... 48,970 7,750 -- --
---------- ---------- ---------- ------------
Net expenses.......................................... 1,432,177 580,120 794,815 2,600,402
---------- ---------- ---------- ------------
NET INVESTMENT INCOME (LOSS)................................ 3,823,222 1,762,313 2,601,044 17,912,128
---------- ---------- ---------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... 234,429 470,342 372,734 4,677
Realized gain distribution from
The Trusts.......................................... 3,630 -- 1,620,732 3,909,878
---------- ---------- ---------- ------------
Net realized gain (loss)................................. 238,059 470,342 1,993,466 3,914,555
Change in unrealized appreciation
(depreciation) of investments......................... 121,024 512,287 (486,113) (36,813,923)
---------- ---------- ---------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 359,083 982,629 1,507,353 (32,899,368)
========== ========== ========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $4,182,305 $2,744,942 $4,108,397 $(14,987,240)
========== ========== ========== ============
<CAPTION>
EQUITY SERIES:
---------------------------------------------------------------
EQ/
T. ROWE PUTNAM
PRICE GROWTH & ALLIANCE ALLIANCE
EQUITY INCOME GROWTH & EQUITY
INCOME VALUE INCOME INDEX
FUND FUND FUND FUND
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $2,277,162 $ 643,088 $ 1,653,807 $ 10,632,473
---------- ---------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,304,543 670,969 6,396,117 11,997,835
Less: Reduction for expense limitation...................... -- -- -- --
---------- ---------- ----------- ------------
Net expenses.......................................... 1,304,543 670,969 6,396,117 11,997,835
---------- ---------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 972,619 (27,881) (4,742,310) (1,365,362)
---------- ---------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (974,087) (339,484) 3,660,147 40,077,379
Realized gain distribution from
The Trusts.......................................... 2,932,028 580,684 48,006,831 339,719
---------- ---------- ----------- ------------
Net realized gain (loss)................................. 1,957,941 241,200 51,666,978 40,417,098
Change in unrealized appreciation
(depreciation) of investments......................... 4,171,888 5,418,025 39,346,894 170,263,193
---------- ---------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 6,129,829 5,659,225 91,013,872 210,680,291
---------- ---------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $7,102,448 $5,631,344 $86,271,562 $209,314,929
========== ========== =========== ============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-6
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
MERRILL
LYNCH
BASIC ALLIANCE
VALUE COMMON MFS ALLIANCE
EQUITY STOCK RESEARCH GLOBAL
FUND FUND FUND FUND
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 550,754 $ 42,754,627 $ 249,000 $ 7,924,674
----------- -------------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 494,290 95,988,818 735,308 8,877,655
Less: Reduction for expense limitation...................... -- 6,717,477 -- --
----------- -------------- ----------- ------------
Net expenses.......................................... 494,290 89,271,341 735,308 8,877,655
----------- -------------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 56,464 (46,516,714) (486,308) (952,981)
----------- -------------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (1,204,767) 190,070,720 (916,443) 13,674,946
Realized gain distribution from
The Trusts.......................................... 1,908,414 932,028,578 -- 46,107,203
----------- -------------- ----------- ------------
Net realized gain (loss)................................. 703,647 1,122,099,298 (916,443) 59,782,149
Change in unrealized appreciation
(depreciation) of investments......................... 1,021,838 573,857,850 13,393,079 60,932,110
----------- -------------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 1,725,485 1,695,957,148 12,476,636 120,714,259
=========== ============== =========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $ 1,781,949 $1,649,440,434 $11,990,328 $119,761,278
=========== ============== =========== ============
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------
MORGAN
T. ROWE STANLEY
ALLIANCE PRICE INTER- EMERGING ALLIANCE
INTER- NATIONAL- MARKETS AGGRESSIVE
NATIONAL STOCK EQUITY STOCK
FUND FUND FUND FUND
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 2,332,648 $ 628,616 $ 61,144 $ 14,559,406
----------- ----------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,702,585 717,829 139,058 43,880,560
Less: Reduction for expense limitation...................... -- -- -- 3,621,990
----------- ----------- ----------- ------------
Net expenses.......................................... 1,702,585 717,829 139,058 40,258,570
----------- ----------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 630,063 (89,213) (77,914) (25,699,164)
----------- ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (6,316,417) (2,187,587) (4,762,302) 76,319,984
Realized gain distribution from
The Trusts.......................................... 24,639 677 -- 153,501,697
----------- ----------- ----------- ------------
Net realized gain (loss)................................. (6,291,778) (2,186,910) (4,762,302) 229,821,681
Change in unrealized appreciation
(depreciation) of investments......................... 17,134,710 8,173,937 34,335 (233,439,908)
----------- ----------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 10,842,932 5,987,027 (4,727,967) (3,618,227)
=========== =========== =========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $11,472,995 $ 5,897,814 $(4,805,881) $ (29,317,391)
=========== =========== =========== =============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-7
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED):
----------------------------------------------------------------
MFS
WARBURG PINCUS ALLIANCE EMERGING ALLIANCE
SMALL COMPANY SMALL CAP GROWTH CONSERVATIVE
VALUE GROWTH COMPANIES INVESTORS
FUND FUND FUND FUND
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 420,391 $ 11,795 $ 2,970 $ 4,213,562
------------ ------------ ----------- -----------
Expenses (Note 3):
Asset-based charges................................... 1,049,204 1,437,474 1,125,210 1,406,739
Less: Reduction for expense limitation...................... -- -- -- --
------------ ------------ ----------- -----------
Net expenses.......................................... 1,049,204 1,437,474 1,125,210 1,406,739
------------ ------------ ----------- -----------
NET INVESTMENT INCOME (LOSS)................................ (628,813) (1,425,679) (1,122,240) 2,806,823
------------ ------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (3,319,964) (18,408,722) (4,911,369) 1,336,530
Realized gain distribution from
The Trusts.......................................... -- -- -- 6,357,062
------------ ------------ ----------- -----------
Net realized gain (loss)................................. (3,319,964) (18,408,722) (4,911,369) 7,693,592
Change in unrealized appreciation
(depreciation) of investments......................... (7,312,118) 12,576,541 35,293,322 2,040,567
------------ ------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... (10,632,082) (5,832,181) 30,381,953 9,734,159
============ ============ =========== ===========
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $(11,260,895) $ (7,257,860) $29,259,713 $12,540,982
============ ============ =========== ===========
<CAPTION>
ASSET ALLOCATION SERIES:
-------------------------------------------------------------
MERRILL
EQ/ ALLIANCE LYNCH
PUTNAM GROWTH ALLIANCE WORLD
BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND
----------- ------------ -------------- ----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 634,198 $ 15,542,047 $ 33,629,387 $ 83,000
---------- ------------ ------------ ---------
Expenses (Note 3):
Asset-based charges................................... 287,370 10,042,667 18,391,448 94,329
Less: Reduction for expense limitation...................... -- -- 2,004,680 --
---------- ------------ ------------ ---------
Net expenses.......................................... 287,370 10,042,667 16,386,768 94,329
---------- ------------ ------------ ---------
NET INVESTMENT INCOME (LOSS)................................ 346,828 5,499,380 17,242,619 (11,329)
---------- ------------ ------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... 307,112 8,822,060 23,244,711 (103,174)
Realized gain distribution from
The Trusts.......................................... 395,016 67,065,259 110,287,707 --
---------- ------------ ------------ ---------
Net realized gain (loss)................................. 702,128 75,887,319 133,532,418 (103,174)
Change in unrealized appreciation
(depreciation) of investments......................... 1,408,394 40,944,576 42,665,225 648,068
---------- ------------ ------------ ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 2,110,522 116,831,895 176,197,643 544,894
---------- ------------ ------------ ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $2,457,350 $122,331,275 $193,440,262 $ 533,565
========== ============ ============ =========
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-8
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
-----------------------------------------------------------------
ALLIANCE
MONEY MARKET ALLIANCE INTERMEDIATE
FUND GOVERNMENT SECURITIES FUND
------------------------------ -----------------------------
1998 1997 1998 1997
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 3,823,222 $ 3,606,969 $ 1,762,313 $ 1,421,306
Net realized gain (loss) on investments.................. 238,059 236,951 470,342 63,438
Change in unrealized appreciation
(depreciation) of investments......................... 121,024 (78,466) 512,287 431,540
------------ ------------ ----------- -----------
Net increase in net assets from operations............... 4,182,305 3,765,454 2,744,942 1,916,284
------------ ------------ ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 59,238,443 86,657,302 10,106,543 7,536,973
Transfers from other Funds and
Guaranteed Interest Account......................... 99,124,881 47,922,157 23,196,411 8,017,226
------------ ------------ ----------- -----------
Total............................................ 158,363,324 134,579,459 33,302,954 15,554,199
------------ ------------ ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 25,401,484 16,145,603 5,018,282 3,204,151
Transfers to other Funds and
Guaranteed Interest Account......................... 108,901,266 117,776,744 14,425,062 6,576,233
Withdrawal and administrative charges................. 307,072 297,412 75,927 54,007
------------ ------------ ----------- -----------
Total............................................ 134,609,822 134,219,759 19,519,271 9,834,391
------------ ------------ ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 23,753,502 359,700 13,783,683 5,719,808
------------ ------------ ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 99,791 (68,437) (40,620) (50,296)
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 28,035,598 4,056,717 16,488,005 7,585,796
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 97,871,518 93,814,801 37,013,989 29,428,193
------------ ------------ ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $125,907,116 $ 97,871,518 $53,501,994 $37,013,989
============ ============ =========== ===========
<CAPTION>
FIXED INCOME SERIES:
----------------------------------------------------------------
ALLIANCE ALLIANCE
QUALITY BOND HIGH YIELD
FUND FUND
---------------------------- -----------------------------
1998 1997 1998 1997
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 2,601,044 $ 1,622,820 $ 17,912,128 $ 10,021,713
Net realized gain (loss) on investments.................. 1,993,466 249,479 3,914,555 8,751,281
Change in unrealized appreciation
(depreciation) of investments......................... (486,113) 547,099 (36,813,923) (187,263)
----------- ----------- ------------ ------------
Net increase in net assets from operations............... 4,108,397 2,419,398 (14,987,240) 18,585,731
----------- ----------- ------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 20,999,014 8,725,632 52,878,815 39,249,294
Transfers from other Funds and
Guaranteed Interest Account......................... 46,264,543 14,735,972 114,552,746 81,831,743
----------- ----------- ------------ ------------
Total............................................ 67,263,557 23,461,604 167,431,561 121,081,037
----------- ----------- ------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 4,294,846 2,471,399 15,414,754 9,034,492
Transfers to other Funds and
Guaranteed Interest Account......................... 26,129,927 9,009,004 96,757,242 50,004,724
Withdrawal and administrative charges................. 64,190 49,238 269,447 180,111
----------- ----------- ------------ ------------
Total............................................ 30,488,963 11,529,641 112,441,443 59,219,327
----------- ----------- ------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 36,774,594 11,931,963 54,990,118 61,861,710
----------- ----------- ------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (65,774) (51,466) (32,954) (195,148)
----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,817,217 14,299,895 39,969,924 80,252,293
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,649,160 26,349,265 158,213,532 77,961,239
----------- ----------- ------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $81,466,377 $40,649,160 $198,183,456 $158,213,532
=========== =========== ============ ============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-9
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES:
--------------------------------------------------------------
T. ROWE PRICE EQ/PUTNAM
EQUITY INCOME GROWTH & INCOME VALUE
FUND(a) FUND(a)
----------------------------- ----------------------------
1998 1997 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 972,619 $ 213,607 $ (27,881) $ 27,593
Net realized gain (loss) on investments.................. 1,957,941 84,219 241,200 48,562
Change in unrealized appreciation
(depreciation) of investments......................... 4,171,888 3,419,591 5,418,025 743,804
------------ ----------- ----------- -----------
Net increase in net assets from operations............... 7,102,448 3,717,417 5,631,344 819,959
------------ ----------- ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 34,984,402 14,253,368 21,041,270 9,287,300
Transfers from other Funds and
Guaranteed Interest Account......................... 70,500,028 49,127,513 31,492,288 21,624,425
------------ ----------- ----------- -----------
Total............................................ 105,484,430 63,380,881 52,533,558 30,911,725
------------ ----------- ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 4,063,205 461,902 2,208,567 221,732
Transfers to other Funds and
Guaranteed Interest Account......................... 26,010,302 8,775,894 9,702,715 2,466,969
Withdrawal and administrative charges................. 88,752 7,224 53,830 5,138
------------ ----------- ----------- -----------
Total............................................ 30,162,259 9,245,020 11,965,112 2,693,839
------------ ----------- ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 75,322,171 54,135,861 40,568,446 28,217,886
------------ ----------- ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (94,421) (368,386) (127,918) (283,117)
------------ ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 82,330,198 57,484,892 46,071,872 28,754,728
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 57,484,892 -- 28,754,728 --
------------ ----------- ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $139,815,090 $57,484,892 $74,826,600 $28,754,728
============ =========== =========== ===========
<CAPTION>
EQUITY SERIES:
--------------------------------------------------------------
ALLIANCE ALLIANCE
GROWTH & INCOME EQUITY INDEX
FUND FUND
------------------------------- ----------------------------
1998 1997 1998 1997
------------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (4,742,310) $ (881,670) $ (1,365,362) $ 785,831
Net realized gain (loss) on investments.................. 51,666,978 22,637,435 40,417,098 15,251,160
Change in unrealized appreciation
(depreciation) of investments......................... 39,346,894 34,617,976 170,263,193 98,430,290
------------- ------------ -------------- -----------
Net increase in net assets from operations............... 86,271,562 56,373,741 209,314,929 114,467,281
------------- ------------ -------------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 101,906,524 77,902,559 169,623,980 123,805,230
Transfers from other Funds and
Guaranteed Interest Account......................... 162,800,542 159,040,741 637,861,607 497,060,564
------------- ------------ -------------- -----------
Total............................................ 264,707,066 236,943,300 807,485,587 620,865,794
------------- ------------ -------------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 30,427,264 15,991,738 55,265,209 26,845,795
Transfers to other Funds and
Guaranteed Interest Account......................... 89,917,684 70,222,768 455,238,354 332,805,482
Withdrawal and administrative charges................. 678,233 387,138 1,207,740 650,256
------------- ------------ -------------- -----------
Total............................................ 121,023,181 86,601,644 511,711,303 360,301,533
------------- ------------ -------------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 143,683,885 150,341,656 295,774,284 260,564,261
------------- ------------ -------------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (817,183) (337,427) (1,687,941) (491,351)
------------- ------------ -------------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 229,138,264 206,377,970 503,401,272 374,540,191
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 369,884,267 163,506,297 648,886,895 274,346,704
------------- ------------ -------------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $599,022,531 $369,884,267 $1,152,288,167 $648,886,895
============= ============ ============== ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-10
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
--------------------------------------------------------------------
ALLIANCE
MERRILL LYNCH BASIC VALUE COMMON STOCK
EQUITY FUND(a) FUND
------------------------------ -------------------------------------
1998 1997 1998 1997
----------- ----------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 56,464 $ 28,039 $ (46,516,714) $ (40,194,434)
Net realized gain (loss) on investments.................. 703,647 32,936 1,122,099,298 520,414,631
Change in unrealized appreciation
(depreciation) of investments......................... 1,021,838 226,896 573,857,850 776,898,715
----------- ----------- -------------- --------------
Net increase in net assets from
operations............................................ 1,781,949 287,871 1,649,440,434 1,257,118,912
----------- ----------- -------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 18,099,811 5,085,307 526,598,693 485,617,488
Transfers from other Funds and
Guaranteed Interest Account......................... 54,374,032 15,531,026 1,219,987,398 981,404,674
----------- ----------- -------------- --------------
Total............................................ 72,473,843 20,616,333 1,746,586,091 1,467,022,162
----------- ----------- -------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 1,998,824 146,225 439,741,977 326,957,672
Transfers to other Funds and
Guaranteed Interest Account......................... 31,529,622 3,680,513 1,134,646,060 793,882,977
Withdrawal and administrative
charges............................................. 37,806 3,018 7,821,832 6,730,878
----------- ----------- -------------- --------------
Total............................................ 33,566,252 3,829,756 1,582,209,869 1,127,571,527
----------- ----------- -------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 38,907,591 16,786,577 164,376,222 339,450,635
----------- ----------- -------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (112,369) (298,904) (12,019,228) (5,291,673)
----------- ----------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,577,171 16,775,544 1,801,797,428 1,591,277,874
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 16,775,544 -- 5,923,975,974 4,332,698,100
----------- ----------- -------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $57,352,715 $16,775,544 $7,725,773,402 $5,923,975,974
=========== =========== ============== ==============
<CAPTION>
EQUITY SERIES (CONTINUED):
------------------------------------------------------------------
MFS RESEARCH ALLIANCE GLOBAL
FUND(a) FUND
------------------------------- ---------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (486,308) $ (44,322) $ (952,981) $ 4,053,343
Net realized gain (loss) on investments.................. (916,443) 156,450 59,782,149 44,106,582
Change in unrealized appreciation
(depreciation) of investments......................... 13,393,079 477,876 60,932,110 7,345,361
------------ ------------ ------------ ------------
Net increase in net assets from
operations............................................ 11,990,328 590,004 119,761,278 55,505,286
------------ ------------ ------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 26,220,920 9,395,788 73,052,084 89,835,392
Transfers from other Funds and
Guaranteed Interest Account......................... 79,372,885 21,884,490 97,000,214 100,167,043
------------ ------------ ------------ ------------
Total............................................ 105,593,805 31,280,278 170,052,298 190,002,435
------------ ------------ ------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 2,234,932 315,298 45,379,156 38,003,491
Transfers to other Funds and
Guaranteed Interest Account......................... 39,937,639 3,913,603 124,416,716 93,151,966
Withdrawal and administrative
charges............................................. 56,352 4,474 1,061,880 1,013,918
------------ ------------ ------------ ------------
Total............................................ 42,228,923 4,233,375 170,857,752 132,169,375
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 63,364,882 27,046,903 (805,454) 57,833,060
------------ ------------ ------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (280,049) (462,377) (667,287) (280,980)
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 75,075,161 27,174,530 118,288,537 113,057,366
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 27,174,530 -- 608,511,631 495,454,265
------------ ------------ ------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $102,249,691 $27,174,530 $726,800,168 $608,511,631
============ =========== ============ ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
ALLIANCE T. ROWE PRICE
INTERNATIONAL INTERNATIONAL STOCK
FUND FUND(a)
------------------------------ -----------------------------
1998 1997 1998 1997
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 630,063 $ 1,841,231 $ (89,213) $ (167,342)
Net realized gain (loss) on investments.................. (6,291,778) 8,984,846 (2,186,910) (1,454,589)
Change in unrealized appreciation
(depreciation) of investments......................... 17,134,710 (15,797,804) 8,173,937 (917,513)
------------ ------------ ----------- -----------
Net increase in net assets from
operations............................................ 11,472,995 (4,971,727) 5,897,814 (2,539,444)
------------ ------------ ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 18,021,919 27,672,360 17,268,615 11,943,016
Transfers from other Funds and
Guaranteed Interest Account......................... 252,313,930 151,532,780 79,807,973 48,742,022
------------ ------------ ----------- -----------
Total............................................ 270,335,849 179,205,140 97,076,588 60,685,038
------------ ------------ ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 9,618,434 9,154,376 2,262,558 551,644
Transfers to other Funds and
Guaranteed Interest Account......................... 259,822,531 143,958,994 64,643,746 19,727,736
Withdrawal and administrative
charges............................................. 226,908 226,612 65,025 12,207
------------ ------------ ----------- -----------
Total............................................ 269,667,873 153,339,982 66,971,329 20,291,587
------------ ------------ ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 667,976 25,865,158 30,105,259 40,393,451
------------ ------------ ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (208,473) 8,298 (140,255) 74,460
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 11,932,498 20,901,729 35,862,818 37,928,467
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 118,089,289 97,187,560 37,928,467 --
------------ ------------ ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $130,021,787 $118,089,289 $73,791,285 $37,928,467
============ ============ =========== ===========
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
MORGAN STANLEY ALLIANCE
EMERGING MARKETS EQUITY AGGRESSIVE STOCK
FUND(b) FUND
---------------------------- ---------------------------------
1998 1997 1998 1997
----------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (77,914) $ 15,148 $ (25,699,164) $ (36,023,732)
Net realized gain (loss) on investments.................. (4,762,302) (875,317) 229,821,681 414,890,550
Change in unrealized appreciation
(depreciation) of investments......................... 34,335 (1,097,984) (233,439,908) (79,262,405)
----------- ------------ --------------- --------------
Net increase in net assets from
operations............................................ (4,805,881) (1,958,153) (29,317,391) 299,604,413
----------- ------------ -------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 4,268,805 2,087,150 292,963,500 378,453,001
Transfers from other Funds and
Guaranteed Interest Account......................... 58,497,186 17,543,713 837,060,745 1,226,614,217
----------- ------------ -------------- --------------
Total............................................ 62,765,991 19,630,863 1,130,024,245 1,605,067,218
----------- ------------ -------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 371,931 38,081 246,890,973 223,777,455
Transfers to other Funds and
Guaranteed Interest Account......................... 55,007,653 10,197,807 1,105,075,546 1,226,219,275
Withdrawal and administrative
charges............................................. 12,342 1,449 5,526,894 5,581,896
----------- ------------ -------------- --------------
Total............................................ 55,391,926 10,237,337 1,357,493,413 1,455,578,626
----------- ------------ -------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 7,374,065 9,393,526 (227,469,168) 149,488,592
----------- ------------ -------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 1,295,969 1,210,394 63,901 (445,491)
----------- ------------ -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 3,864,153 8,645,767 (256,722,658) 448,647,514
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 8,645,767 -- 3,425,221,244 2,976,573,730
----------- ------------ -------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $12,509,920 $ 8,645,767 $3,168,498,586 $3,425,221,244
============ ============ ============== ===============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
(b) Commenced operations on August 20, 1997.
See Notes to Financial Statements.
FSA-12
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED):
-----------------------------------------------------------------
WARBURG PINCUS ALLIANCE
SMALL COMPANY VALUE SMALL CAP GROWTH
FUND(a) FUND(a)
------------------------------- -------------------------------
1998 1997 1998 1997
------------ ----------- ------------- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (628,813) $ (233,472) $ (1,425,679) $ (226,153)
Net realized gain (loss) on investments.................. (3,319,964) (398,282) (18,408,722) 2,928,197
Change in unrealized appreciation
(depreciation) of investments......................... (7,312,118) 22,263 12,576,541 (1,564,649)
------------ ------------ ------------- ------------
Net increase in net assets from operations............... (11,260,895) (609,491) (7,257,860) 1,137,395
------------ ------------ ------------- ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 25,746,572 17,932,084 43,309,112 15,686,202
Transfers from other Funds and
Guaranteed Interest Account......................... 45,701,935 95,994,086 363,094,583 134,506,874
------------ ------------ ------------- ------------
Total............................................ 71,448,507 113,926,170 406,403,695 150,193,076
------------ ------------ ------------- ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 3,085,017 710,649 3,905,019 644,310
Transfers to other Funds and
Guaranteed Interest Account......................... 34,873,684 44,374,048 319,261,827 87,128,302
Withdrawal and administrative charges................. 105,234 13,343 112,019 7,383
------------ ------------ ------------- ------------
Total............................................ 38,063,935 45,098,040 323,278,865 87,779,995
------------ ------------ ------------- ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 33,384,572 68,828,130 83,124,830 62,413,081
------------ ------------ ------------- ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 13,573 (153,081) (23,520) (487,244)
------------ ------------ ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 22,137,250 68,065,558 75,843,450 63,063,232
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 68,065,558 -- 63,063,232 --
------------ ------------ ------------- ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $ 90,202,808 $ 68,065,558 $138,906,682 $ 63,063,232
============ ============ ============ ============
<CAPTION>
EQUITY SERIES (CONCLUDED):
---------------------------------
MFS EMERGING
GROWTH COMPANIES
FUND(a)
---------------------------------
1998 1997
------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (1,122,240) $ (59,318)
Net realized gain (loss) on investments.................. (4,911,369) 410,582
Change in unrealized appreciation
(depreciation) of investments......................... 35,293,322 405,203
------------- -----------
Net increase in net assets from operations............... 29,259,713 756,467
------------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 45,965,336 10,348,726
Transfers from other Funds and
Guaranteed Interest Account......................... 245,232,174 41,158,325
------------- -----------
Total............................................ 291,197,510 51,507,051
------------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 3,422,691 272,079
Transfers to other Funds and
Guaranteed Interest Account......................... 170,609,391 20,257,025
Withdrawal and administrative charges................. 94,296 3,323
------------- -----------
Total............................................ 174,126,378 20,532,427
------------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 117,071,132 30,974,624
------------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (199,446) (659,740)
------------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 146,131,399 31,071,351
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 31,071,351 --
------------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $177,202,750 $31,071,351
============ ===========
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-13
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES:
-------------------------------------------------------------
ALLIANCE EQ/PUTNAM
CONSERVATIVE INVESTORS BALANCED
FUND FUND(a)
--------------------------- -----------------------------
1998 1997 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 2,806,823 $ 2,448,726 $ 346,828 $ 129,710
Net realized gain (loss) on investments.................. 7,693,592 3,730,623 702,128 115,430
Change in unrealized appreciation
(depreciation) of investments......................... 2,040,567 3,477,016 1,408,394 602,835
------------ ----------- ----------- -----------
Net increase in net assets from operations............... 12,540,982 9,656,365 2,457,350 847,975
------------ ----------- ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 19,140,568 11,365,584 10,044,027 3,699,337
Transfers from other Funds and
Guaranteed Interest Account......................... 16,914,697 8,530,415 24,576,797 15,752,330
------------ ----------- ----------- -----------
Total............................................ 36,055,265 19,895,999 34,620,824 19,451,667
------------ ----------- ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 8,188,450 7,295,059 975,331 192,650
Transfers to other Funds and
Guaranteed Interest Account......................... 12,810,163 14,511,104 13,658,260 7,250,221
Withdrawal and administrative charges................. 167,275 162,391 20,744 1,654
------------ ----------- ----------- -----------
Total............................................ 21,165,888 21,968,554 14,654,335 7,444,525
------------ ----------- ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 14,889,377 (2,072,555) 19,966,489 12,007,142
------------ ----------- ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (230,218) (172,151) (204,197) (434,093)
------------ ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 27,200,141 7,411,659 22,219,642 12,421,024
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 92,663,211 85,251,552 12,421,024 --
------------ ----------- ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $119,863,352 $92,663,211 $34,640,666 $12,421,024
============ =========== =========== ===========
<CAPTION>
ASSET ALLOCATION SERIES:
----------------------------------
ALLIANCE
GROWTH INVESTORS
FUND
----------------------------------
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 5,499,380 $ 7,374,359
Net realized gain (loss) on investments.................. 75,887,319 38,624,261
Change in unrealized appreciation
(depreciation) of investments......................... 40,944,576 40,925,116
------------ ------------
Net increase in net assets from operations............... 122,331,275 86,923,736
------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 90,895,614 96,835,654
Transfers from other Funds and
Guaranteed Interest Account......................... 81,033,459 86,565,969
------------ ------------
Total............................................ 171,929,073 183,401,623
------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 50,079,041 39,593,409
Transfers to other Funds and
Guaranteed Interest Account......................... 81,495,051 76,718,000
Withdrawal and administrative charges................. 1,338,300 1,162,210
------------ ------------
Total............................................ 132,912,392 117,473,619
------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 39,016,681 65,928,004
------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (840,403) (551,891)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 160,507,553 152,299,849
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 681,710,478 529,410,629
------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $842,218,031 $681,710,478
============ ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-14
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES (CONCLUDED):
--------------------------------------
ALLIANCE
BALANCED
FUND
--------------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)...................................... $ 17,242,619 $ 23,301,713
Net realized gain (loss) on investments........................... 133,532,418 79,099,392
Change in unrealized appreciation
(depreciation) of investments.................................. 42,665,225 45,961,244
-------------- --------------
Net increase in net assets from operations........................ 193,440,262 148,362,349
-------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions.................................................. 76,987,846 84,629,925
Transfers from other Funds and
Guaranteed Interest Account.................................. 168,586,346 112,630,041
-------------- --------------
Total..................................................... 245,574,192 197,259,966
-------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits........................................... 107,639,830 96,288,584
Transfers to other Funds and
Guaranteed Interest Account.................................. 202,971,507 170,604,239
Withdrawal and administrative charges.......................... 1,699,980 1,889,094
-------------- --------------
Total..................................................... 312,311,317 268,781,917
-------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions.................................... (66,737,125) (71,521,951)
-------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3).................. (1,923,481) (620,223)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 124,779,656 76,220,175
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 1,197,956,017 1,121,735,842
-------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS.................................... $1,322,735,673 $1,197,956,017
============== ==============
<CAPTION>
ASSET ALLOCATION SERIES (CONCLUDED):
----------------------------------
MERRILL LYNCH WORLD
STRATEGY FUND(a)
------------------------------
1998 1997
---------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)...................................... $ (11,329) $ 16,034
Net realized gain (loss) on investments........................... (103,174) 33,737
Change in unrealized appreciation
(depreciation) of investments.................................. 648,068 (153,612)
---------- -----------
Net increase in net assets from operations........................ 533,565 (103,841)
---------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions.................................................. 1,929,793 1,913,915
Transfers from other Funds and
Guaranteed Interest Account.................................. 7,365,231 8,826,145
---------- -----------
Total..................................................... 9,295,024 10,740,060
---------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits........................................... 340,072 156,911
Transfers to other Funds and
Guaranteed Interest Account.................................. 5,454,326 4,913,746
Withdrawal and administrative charges.......................... 10,176 622
---------- -----------
Total..................................................... 5,804,574 5,071,279
---------- -----------
Net increase (decrease) in net assets from
Contractowners transactions.................................... 3,490,450 5,668,781
---------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3).................. (179,747) (139,641)
---------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 3,844,268 5,425,299
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 5,425,299 --
---------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS.................................... $9,269,567 $ 5,425,299
========== ===========
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-15
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. General
The Equitable Life Assurance Society of the United States (Equitable Life)
Separate Account A (The Account) is organized as a unit investment trust, a
type of investment company, and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940. Alliance
Capital Management L.P., an indirect, majority-owned subsidiary of
Equitable Life, manages The Hudson River Trust (HR Trust) and is investment
adviser for all of the investment funds of HR Trust. EQ Financial
Consultants, Inc., an indirect, wholly owned subsidiary of Equitable Life,
manages the EQ Advisors Trust (EQ Trust) and has overall responsibility for
general management and administration of EQ Trust. The Account consists of
twenty-four investment funds (Funds): Alliance Money Market Fund, Alliance
Intermediate Government Securities Fund, Alliance Quality Bond Fund,
Alliance High Yield Fund, T. Rowe Price Equity Income Fund, EQ/Putnam
Growth & Income Value Fund, Alliance Growth & Income Fund, Alliance Equity
Index Fund, Merrill Lynch Basic Value Equity Fund, Alliance Common Stock
Fund, MFS Research Fund, Alliance Global Fund, Alliance International Fund,
T. Rowe Price International Stock Fund, Morgan Stanley Emerging Markets
Equity Fund, Alliance Aggressive Stock Fund, Warburg Pincus Small Company
Value Fund, Alliance Small Cap Growth Fund, MFS Emerging Growth Companies
Fund, Alliance Conservative Investors Fund, EQ/Putnam Balanced Fund,
Alliance Growth Investors Fund, Alliance Balanced Fund and Merrill Lynch
World Strategy Fund. The assets in each fund are invested in shares of a
corresponding portfolio (Portfolio) of a mutual fund, Class 1A or Class 1B
shares of HR Trust or Class 1B shares of EQ Trust (Collectively, the
"Trusts"). Class 1A and 1B shares are offered by the Trust at net asset
value. Both classes of shares are subject to fees for investment management
and advisory services and other Trust expenses. Class 1A shares are not
subject to distribution fees imposed pursuant to a distribution plan. Class
1B shares are subject to distribution fees imposed under a distribution
plan (herein, the "Rule 12b-1 Plans") adopted pursuant to Rule 12b-1 under
the 1940 Act, as amended. The Rule 12b-1 Plans provide that the Trusts, on
behalf of each Fund, may charge annually up to 0.25% of the average daily
net assets of a Fund attributable to its Class 1B shares in respect of
activities primarily intended to result in the sale of the Class 1B shares.
These fees are reflected in the net asset value of the shares. The Trusts
are open-end, diversified investment management companies that invest
separate account assets of insurance companies.
EQFC earns fees from both Trusts under distribution agreements held with
the Trusts. EQFC also earns fees under an investment management agreement
with the EQ Trust. Alliance earns fees under an investment advisory
agreement with the HR Trust.
The Account is used to fund benefits under certain individual tax-favored
variable annuity contracts (Old Contracts), individual non-qualified
variable annuity contracts (EQUIPLAN Contracts), tax-favored and
non-qualified certificates issued under group deferred variable annuity
contracts and certain related individual contracts (EQUI-VEST Contracts),
group deferred variable annuity contracts used to fund tax-qualified
defined contribution plans (Momentum Contracts) and group variable annuity
contracts used as a funding vehicle for employers who sponsor qualified
defined contribution plans (Momentum Plus). All of these contracts and
certificates are collectively referred to as the Contracts.
The net assets of the Account are not chargeable with liabilities arising
out of any other business Equitable Life may conduct. The excess of assets
over reserves and other contract liabilities, if any, in the Account may be
transferred to Equitable Life's General Account. Equitable Life's General
Account is subject to creditor rights. Due to/from Equitable Life's General
Account represents amounts receivable/payable to the General Account is
predominately related to policy-related transactions, premiums, surrenders
and death benefits.
FSA-16
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Investments are made in shares of the Trust and are valued at the net asset
values per share of the respective Portfolios. The net asset value is
determined by the Trust using the market or fair value of the underlying
assets of the Portfolio less liabilities.
Investment transactions are recorded by the Account on the trade date.
Dividends are declared by HR Trust at the end of each quarter and by EQ
Trust in the fourth quarter on the ex-dividend date. Dividends and capital
gain distributions are automatically reinvested on the ex-dividend date.
Realized gains and losses include gains and losses on redemptions of the
Trust's shares (determined on the identified cost basis) and Trust
distributions representing the net realized gains on Trust investment
transactions are distributed by the Trusts at the end of each year.
No federal income tax based on net income or realized and unrealized
capital gains is currently applicable to Contracts participating in the
Account by reason of applicable provisions of the Internal Revenue Code and
no federal income tax payable by Equitable Life is expected to affect the
unit value of Contracts participating in the Account. Accordingly, no
provision for income taxes is required. Equitable Life retains the right to
charge for any federal income tax incurred which is attributable to the
Account if the law is changed.
3. Asset Charges
The following charges are made directly against the daily net assets of the
Account and are reflected daily in the computation of the accumulation unit
values of the Contracts:
<TABLE>
<CAPTION>
DEATH MORTALITY EXPENSE FINANCIAL
BENEFITS RISKS EXPENSES RISKS ACCOUNTING TOTAL
------------- ------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQUI-VEST/
MOMENTUM
CONTRACTS
Alliance Money Market Fund,
Alliance Balanced Fund
Alliance Common Stock Fund 0.05% 0.30% 0.60% 0.30% 0.24% 1.49%
All Other Funds 0.05% 0.30% 0.60% 0.15% 0.24% 1.34%
MOMENTUM PLUS CONTRACTS--ALL
FUNDS -- 0.50% 0.25% 0.60% -- 1.35%
OLD CONTRACTS
Common Stock and Money Market
Funds 0.05% 0.45% 0.16% 0.08% -- .74%
EQUIPLAN CONTRACTS
Common Stock and
Intermediate Government
Securities Funds 0.05% 0.45% 0.16% 0.08% -- .74%
EQUI-VEST SERIES 300 & SERIES 400
CONTRACTS
Alliance Money Market Fund
Alliance Common Stock Fund
Alliance Aggressive Stock Fund
Alliance Balanced Fund -- 0.60% 0.25% 0.50% -- 1.35%
All Other Funds -- 0.60% 0.24%* 0.50% -- 1.34%
</TABLE>
FSA-17
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
3. Asset Charges (Continued)
<TABLE>
<CAPTION>
DEATH MORTALITY EXPENSE FINANCIAL
BENEFITS RISKS EXPENSES RISKS ACCOUNTING TOTAL
------------- ------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQUI-VEST SERIES 500 CONTRACTS
All Funds -- 0.70% 0.25% 0.50% -- 1.45%
EQUI-VEST SERIES 600 CONTRACTS
All Funds -- 0.45% 0.25% 0.50% -- 1.20%
</TABLE>
----------
* During 1998, Equitable Life charged EQUI-VEST Series 300 and 400
Contracts 0.24% against the assets of the HR Trust and EQ Trust Funds
for expenses, except as noted. This voluntary expense limitation
discounted from 0.25% to 0.24% may be discontinued by Equitable Life
at its discretion.
The above charges may be retained in the Account by Equitable Life and, to
the extent retained, participate in the net investment results of the Trust
ratably with assets attributable to the Contracts.
Since the Trust shares are valued at their net asset value, investment
advisory fees and direct operating expenses of the Trust are, in effect,
passed on to the Account and are reflected in the computation of the
accumulation unit values of the Contracts.
Under the terms of the Contracts, the aggregate of these asset charges and
the charges of the Trust for advisory fees and for direct operating
expenses may not exceed a total effective annual rate of 1.75% for
EQUI-VEST and Momentum Contracts for the Alliance Money Market Fund, the
Alliance Common Stock Fund, the Alliance Aggressive Stock Fund, the
Alliance Balanced Funds and 1% for the Old Contracts and EQUIPLAN
Contracts.
Under the Contracts, the total charges may be reallocated among the various
expense categories. Equitable Life, however, intends to limit any possible
reallocation to include only the expense risks, mortality risks and death
benefit charges.
4. Contributions, Payments, Transfers and Charges
Contributions represent participant contributions under EQUI-VEST,
Momentum, Momentum Plus and EQUI-VEST Series 300 through 600 Contracts (but
excludes amounts allocated to the Guaranteed Interest Account, which are
reflected in the General Account) and participant contributions under other
Contracts (Old Contracts, EQUIPLAN) reduced by applicable deductions,
charges and state premium taxes. Contributions also include amounts applied
to purchase variable annuities. Transfers are amounts that participants
have directed to be moved among the Funds, including permitted transfers to
and from the Guaranteed Interest Account, which is part of Equitable Life's
General Account.
Variable annuity payments and death benefits are payments to participants
and beneficiaries made under the terms of the Contracts. Withdrawals are
amounts that participants have requested to be withdrawn and paid to them
or applied to purchase annuities. Withdrawal charges, if applicable, are
the deferred contingent withdrawal charges that apply to certain
withdrawals under EQUI-VEST, Momentum, Momentum Plus and EQUI-VEST Series
300 through 600 Contracts. Administrative charges, if applicable, are
deducted annually under EQUI-VEST, EQUIPLAN and Old Contracts and quarterly
under Momentum, Momentum Plus and EQUI-VEST Series 300 through 600
Contracts.
FSA-18
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
Accumulation units issued and redeemed during the periods indicated were:
(Acronym BP refers to total Basis Points charged for that product as
described in Footnote 3)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Fixed Income Series:
ALLIANCE MONEY MARKET FUND
- --------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... 1,229,299 837,383
Momentum Contracts.......................................... 386,247 483,055
Momentum Plus Contracts 135 BP.............................. 503,516 588,908
Momentum Plus Contracts 100 BP.............................. 7,375 10,050
Old Contracts............................................... 42 120,867
EQUI-VEST Contracts Series 300 & 400 135 BP................. 458,194 258,260
EQUI-VEST Contracts Series 500 145 BP....................... 547 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 941,797 877,393
Momentum Contracts.......................................... 326,686 415,858
Momentum Plus Contracts 135 BP.............................. 506,664 564,110
Momentum Plus Contracts 100 BP.............................. 10,102 10,333
Old Contracts............................................... 2,025 1,572
EQUI-VEST Contracts Series 300 & 400 135 BP................. 341,437 277,148
EQUI-VEST Contracts Series 500 145 BP....................... 156 --
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND
- ------------------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,893 5,215
Momentum Plus Contracts 135 BP.............................. 50,402 29,724
Momentum Plus Contracts 100 BP.............................. 1,592 804
EQUIPLAN CONTRACTS.......................................... 4 49,549
EQUI-VEST Contracts Series 300 & 400 134 BP................. 216,535 105,144
EQUI-VEST Contracts Series 500 145 BP....................... 78 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 4,863 4,851
Momentum Plus Contracts 135 BP.............................. 51,462 31,521
Momentum Plus Contracts 100 BP.............................. 471 813
EQUIPLAN CONTRACTS.......................................... 4,747 2
EQUI-VEST Contracts Series 300 & 400 134 BP................. 103,688 50,075
EQUI-VEST Contracts Series 500 145 BP....................... 45 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-19
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Fixed Income Series (Continued):
ALLIANCE QUALITY BOND FUND
- --------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 10,469 7,848
Momentum Plus Contracts 135 BP.............................. 36,968 22,668
Momentum Plus Contracts 100 BP.............................. 444 449
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 483,053 167,788
EQUI-VEST Contracts Series 500 145 BP....................... 146 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,361 5,005
Momentum Plus Contracts 135 BP.............................. 27,523 12,495
Momentum Plus Contracts 100 BP.............................. 182 636
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 209,302 80,367
EQUI-VEST Contracts Series 500 145 BP....................... 19 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE HIGH YIELD FUND
- -----------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 19,540 17,805
Momentum Plus Contracts 135 BP.............................. 45,063 62,992
Momentum Plus Contracts 100 BP.............................. 1,531 1,622
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 976,709 726,147
EQUI-VEST Contracts Series 500 145 BP....................... 387 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 11,692 6,772
Momentum Plus Contracts 135 BP.............................. 55,069 42,608
Momentum Plus Contracts 100 BP.............................. 1,524 1,327
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 643,692 338,338
EQUI-VEST Contracts Series 500 145 BP....................... 8 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-20
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series:
T. ROWE PRICE EQUITY INCOME FUND
- -------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 1,360 --
Momentum Plus Contracts 135 BP.............................. 3,355 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 838,991 554,196
EQUI-VEST Contracts Series 500 145 BP....................... 418 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 214 --
Momentum Plus Contracts 135 BP.............................. 628 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 244,081 79,255
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
EQ/PUTNAM GROWTH & INCOME VALUE FUND
- ------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 523 --
Momentum Plus Contracts 135 BP.............................. 2,572 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 431,414 273,498
EQUI-VEST Contracts Series 500 145 BP....................... 407 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 328 --
Momentum Plus Contracts 100 BP.............................. 507 --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 99,601 23,834
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-21
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
ALLIANCE GROWTH & INCOME FUND
- -----------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 52,613 45,474
Momentum Plus Contracts 135 BP.............................. 113,506 116,065
Momentum Plus Contracts 100 BP.............................. 4,425 3,889
Momentum Plus Contracts 90 BP............................... 642 1,441
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,224,228 1,286,205
EQUI-VEST Contracts Series 500 145 BP....................... 1,401 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 25,771 17,193
Momentum Plus Contracts 135 BP.............................. 87,335 46,155
Momentum Plus Contracts 100 BP.............................. 1,838 2,901
Momentum Plus Contracts 90 BP............................... 38 337
EQUI-VEST Contracts Series 300 & 400 134 BP................. 548,572 462,065
EQUI-VEST Contracts Series 500 145 BP....................... 9 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE EQUITY INDEX FUND
- --------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 79,518 --
Momentum Plus Contracts 135 BP.............................. 205,393 --
Momentum Plus Contracts 100 BP.............................. 6,938 --
Momentum Plus Contracts 90 BP............................... 1,097 --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 3,094,562 2,967,392
EQUI-VEST Contracts Series 500 145 BP....................... 2,295 --
EQUI-VEST Contracts Series 600 120 BP....................... 3 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 37,943 --
Momentum Plus Contracts 135 BP.............................. 153,058 --
Momentum Plus Contracts 100 BP.............................. 1,574 --
Momentum Plus Contracts 90 BP............................... 193 --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,974,951 1,768,139
EQUI-VEST Contracts Series 500 145 BP....................... 44 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-22
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MERRILL LYNCH BASIC VALUE EQUITY FUND
- -------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 3,082 --
Momentum Plus Contracts 135 BP.............................. 2,932 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 563,336 177,242
EQUI-VEST Contracts Series 500 145 BP....................... 352 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 991 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 263,606 32,592
EQUI-VEST Contracts Series 500 145 BP....................... 10 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE COMMON STOCK FUND
- --------------------------
Issued -- EQUI-VEST Contracts......................................... 4,199,955 4,383,156
Momentum Contracts.......................................... 171,967 204,382
Momentum Plus Contracts 135 BP.............................. 479,798 545,202
Momentum Plus Contracts 100 BP.............................. 10,617 41,653
Momentum Plus Contracts 90 BP............................... 2,467 6,431
Old Contracts............................................... 19 301,258
EQUIPLAN Contracts.......................................... 4 86,999
EQUI-VEST Contracts Series 300 & 400 135 BP................. 2,035,253 1,968,780
EQUI-VEST Contracts Series 500 145 BP....................... 4,784 --
EQUI-VEST Contracts Series 600 120 BP....................... 2 --
Redeemed -- EQUI-VEST Contracts......................................... 4,354,955 3,930,073
Momentum Contracts.......................................... 169,605 134,959
Momentum Plus Contracts 135 BP.............................. 539,175 354,590
Momentum Plus Contracts 100 BP.............................. 8,027 142,434
Momentum Plus Contracts 90 BP............................... 686 1,552
Old Contracts............................................... 42,795 3,085
EQUIPLAN Contracts.......................................... 14,746 1,986
EQUI-VEST Contracts Series 300 & 400 135 BP................. 992,260 660,995
EQUI-VEST Contracts Series 500 145 BP....................... 56 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-23
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MFS RESEARCH FUND
- -----------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 4,266 --
Momentum Plus Contracts 135 BP.............................. 3,956 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 811,244 273,002
EQUI-VEST Contracts Series 500 145 BP....................... 897 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 455 --
Momentum Plus Contracts 135 BP.............................. 1,331 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 327,759 36,730
EQUI-VEST Contracts Series 500 145 BP....................... 11 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE GLOBAL FUND
- --------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 49,409 67,282
Momentum Plus Contracts 135 BP.............................. 127,169 173,371
Momentum Plus Contracts 100 BP.............................. 2,960 3,421
Momentum Plus Contracts 90 BP............................... 1,062 2,872
EQUI-VEST Contracts Series 300 & 400 134 BP................. 885,709 1,087,193
EQUI-VEST Contracts Series 500 145 BP....................... 509 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 40,074 36,989
Momentum Plus Contracts 135 BP.............................. 182,741 151,688
Momentum Plus Contracts 100 BP.............................. 3,546 3,187
Momentum Plus Contracts 90 BP............................... 266 468
EQUI-VEST Contracts Series 300 & 400 134 BP................. 859,826 712,463
EQUI-VEST Contracts Series 500 145 BP....................... 12 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-24
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
ALLIANCE INTERNATIONAL FUND
- ---------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 19,308 23,465
Momentum Plus Contracts 135 BP.............................. 45,097 61,102
Momentum Plus Contracts 100 BP.............................. 1,430 8,513
Momentum Plus Contracts 90 BP............................... 368 1,175
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,265,890 1,473,483
EQUI-VEST Contracts Series 500 145 BP....................... 149 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 14,348 10,479
Momentum Plus Contracts 135 BP.............................. 43,776 25,904
Momentum Plus Contracts 100 BP.............................. 860 25,384
Momentum Plus Contracts 90 BP............................... 162 387
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,262,822 1,268,707
EQUI-VEST Contracts Series 500 145 BP....................... 4 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 1,408 --
Momentum Plus Contracts 135 BP.............................. 3,038 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 922,463 590,328
EQUI-VEST Contracts Series 500 145 BP....................... 245 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 904 --
Momentum Plus Contracts 135 BP.............................. 401 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 640,201 201,762
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-25
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND
- -------------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 453 --
Momentum Plus Contracts 135 BP.............................. 1,191 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 971,105 228,577
EQUI-VEST Contracts Series 500 145 BP....................... 86 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 84 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 863,432 119,707
EQUI-VEST Contracts Series 500 145 BP....................... 2 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE AGGRESSIVE STOCK FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... 7,874,975 12,306,387
Momentum Contracts.......................................... 567,249 663,082
Momentum Plus Contracts 135 BP.............................. 444,735 574,827
Momentum Plus Contracts 100 BP.............................. 10,329 36,380
Momentum Plus Contracts 90 BP............................... 2,726 9,299
EQUI-VEST Contracts Series 300 & 400 135 BP................. 2,038,278 2,341,814
EQUI-VEST Contracts Series 500 145 BP....................... 1,374 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 10,271,285 12,221,170
Momentum Contracts.......................................... 604,014 506,394
Momentum Plus Contracts 135 BP.............................. 567,458 369,618
Momentum Plus Contracts 100 BP.............................. 8,422 107,896
Momentum Plus Contracts 90 BP............................... 1,959 2,386
EQUI-VEST Contracts Series 300 & 400 135 BP................. 1,922,386 1,583,469
EQUI-VEST Contracts Series 500 145 BP....................... 2 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-26
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
WARBURG PINCUS SMALL COMPANY VALUE FUND
- ---------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 423 --
Momentum Plus Contracts 135 BP.............................. 2,025 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 612,043 944,293
EQUI-VEST Contracts Series 500 145 BP....................... 327 --
EQUI-VEST Contracts Series 600 120 BP....................... 2 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 61 --
Momentum Plus Contracts 135 BP.............................. 482 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 329,886 367,754
EQUI-VEST Contracts Series 500 145 BP....................... 7 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE SMALL CAP GROWTH FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 28,706 6,275
Momentum Plus Contracts 135 BP.............................. 47,698 8,595
Momentum Plus Contracts 100 BP.............................. 305 --
Momentum Plus Contracts 90 BP............................... 977 466
EQUI-VEST Contracts Series 300 & 400 134 BP................. 3,265,688 1,187,782
EQUI-VEST Contracts Series 500 145 BP....................... 603 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 7,539 139
Momentum Plus Contracts 135 BP.............................. 14,989 743
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... 119 700,040
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,652,769 --
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-27
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Concluded):
MFS EMERGING GROWTH COMPANIES FUND
- ----------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,123 --
Momentum Plus Contracts 135 BP.............................. 8,576 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,078,356 424,497
EQUI-VEST Contracts Series 500 145 BP....................... 1,523 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 1,491 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,244,873 168,426
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Asset Allocation Series:
ALLIANCE CONSERVATIVE INVESTORS FUND
- ------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 8,324 8,745
Momentum Plus Contracts 135 BP.............................. 40,973 45,283
Momentum Plus Contracts 100 BP.............................. 1,546 1,777
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 213,369 114,868
EQUI-VEST Contracts Series 500 145 BP....................... 49 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 7,000 4,397
Momentum Plus Contracts 135 BP.............................. 45,023 52,105
Momentum Plus Contracts 100 BP.............................. 2,688 1,102
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 105,278 128,454
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-28
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Asset Allocation Series (Continued):
EQ/PUTNAM BALANCED FUND
- -----------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 442 --
Momentum Plus Contracts 135 BP.............................. 1,376 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 290,577 175,775
EQUI-VEST Contracts Series 500 145 BP....................... 174 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 116 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 124,887 66,296
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE GROWTH INVESTORS FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 50,095 70,069
Momentum Plus Contracts 135 BP.............................. 148,895 206,206
Momentum Plus Contracts 100 BP.............................. 4,888 3,369
Momentum Plus Contracts 90 BP............................... 685 2,935
EQUI-VEST Contracts Series 300 & 400 134 BP................. 882,636 1,019,421
EQUI-VEST Contracts Series 500 145 BP....................... 744 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 38,654 33,111
Momentum Plus Contracts 135 BP.............................. 192,540 138,201
Momentum Plus Contracts 100 BP.............................. 3,629 3,482
Momentum Plus Contracts 90 BP............................... 118 1,446
EQUI-VEST Contracts Series 300 & 400 134 BP................. 624,987 640,400
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-29
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Concluded):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Asset Allocation Series (Concluded):
ALLIANCE BALANCED FUND
- ----------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... 4,212,025 3,643,409
Momentum Contracts.......................................... 226,716 272,369
Momentum Plus Contracts 135 BP.............................. 155,854 168,722
Momentum Plus Contracts 100 BP.............................. 4,058 15,895
Momentum Plus Contracts 90 BP............................... 487 2,030
EQUI-VEST Contracts Series 300 & 400 135 BP................. 357,343 263,741
EQUI-VEST Contracts Series 500 145 BP....................... 493 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 5,887,319 5,926,775
Momentum Contracts.......................................... 292,550 277,292
Momentum Plus Contracts 135 BP.............................. 220,244 131,565
Momentum Plus Contracts 100 BP.............................. 3,530 52,839
Momentum Plus Contracts 90 BP............................... 61 1,298
EQUI-VEST Contracts Series 300 & 400 135 BP................. 260,878 156,561
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
MERRILL LYNCH WORLD STRATEGY FUND
- ---------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 112 --
Momentum Plus Contracts 135 BP.............................. 841 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 85,123 98,231
EQUI-VEST Contracts Series 500 145 BP....................... 25 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 50 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 53,481 45,952
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-30
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets
Net assets consist of net assets attributable to: (i) Contracts in the
accumulation period, which are represented by Contract accumulation units
outstanding multiplied by net unit values and (ii) actuarial reserves and
other liabilities attributable to Contracts in the payout period which are
not represented by accumulation units or unit values.
Listed below are components of net assets:
<TABLE>
<CAPTION>
FIXED INCOME SERIES: EQUITY SERIES:
------------------------------------------------------------ ----------------------------
ALLIANCE
INTER- EQ/PUTNAM
MEDIATE ALLIANCE ALLIANCE T. ROWE GROWTH &
ALLIANCE GOVERNMENT QUALITY HIGH PRICE EQUITY INCOME
MONEY SECURITIES BOND YIELD INCOME VALUE
MARKET FUND FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ............. 38,523,428 -- -- -- -- --
Net assets attributable
to Old Contracts in
accumulation period ............. 4,312,389 -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ............. -- 2,616,986 -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ............. 11,218,510 1,437,192 1,964,317 5,501,246 149,136 65,510
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ............. 38,847,043 9,240,280 6,425,658 16,040,479 276,389 175,260
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ............. 1,159,113 427,602 179,813 761,000 -- --
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ............. -- -- -- -- -- --
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ............. 31,535,332 39,758,609 72,429,089 175,147,544 139,347,246 74,544,834
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ............. 39,859 3,410 13,160 33,807 42,218 40,895
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ............. -- -- -- 89 101 101
Net assets attributable
to actuarial reserves,
financial reserves, and
other contract
liabilities
attributable to
Contracts in payout ............. 271,442 17,915 454,340 699,291 -- --
------------ ----------- ----------- ------------ ------------ -----------
$125,907,116 $53,501,994 $81,466,377 $198,183,456 $139,815,090 $74,826,600
============ =========== =========== ============ ============ ===========
</TABLE>
FSA-31
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Continued):
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------------------------------------------
MERRILL
ALLIANCE ALLIANCE LYNCH BASIC
GROWTH & EQUITY VALUE ALLIANCE MFS ALLIANCE
INCOME INDEX EQUITY COMMON STOCK RESEARCH GLOBAL
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- 5,578,588,050 -- --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- 107,448,483 -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- 30,994,430 -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 20,534,526 36,675,445 393,479 191,376,071 536,562 28,455,218
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 44,797,660 76,744,192 191,344 299,298,111 264,368 75,882,027
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... 1,128,819 2,312,294 -- 8,221,702 -- 1,769,643
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... 297,636 800,229 -- 1,267,407 -- 471,680
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 529,235,127 1,032,108,886 56,734,346 1,468,792,789 101,361,254 619,628,198
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 143,000 233,384 33,448 486,472 87,507 48,890
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... -- 311 98 206 -- 98
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... 2,885,763 3,413,426 -- 39,299,681 -- 544,414
------------ -------------- ----------- -------------- ------------ ------------
$599,022,531 $1,152,288,167 $57,352,715 $7,725,773,402 $102,249,691 $726,800,168
============ ============== =========== ============== ============ ============
</TABLE>
FSA-32
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Continued):
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------------------------------------------
T. ROWE MORGAN WARBURG
PRICE STANLEY PINCUS ALLIANCE
ALLIANCE INTER- EMERGING ALLIANCE SMALL SMALL
INTER- NATIONAL MARKETS AGGRESSIVE COMPANY CAP
NATIONAL STOCK EQUITY STOCK VALUE GROWTH
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- 2,304,985,451 -- --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 4,377,889 55,292 25,903 125,948,516 38,050 3,237,317
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 10,184,498 261,030 95,457 186,727,114 128,276 4,808,507
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... 450,353 -- -- 5,101,533 -- 36,371
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... 114,042 -- -- 911,462 -- 158,152
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 114,319,069 73,451,923 12,381,723 540,090,983 90,009,744 130,505,375
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 13,485 23,040 6,756 123,823 26,572 52,506
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... -- -- 81 -- 166 87
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... 562,451 -- -- 4,609,704 -- 108,367
------------ ----------- ----------- -------------- ----------- ------------
$130,021,787 $73,791,285 $12,509,920 $3,168,498,586 $90,202,808 $138,906,682
============ =========== =========== ============== =========== ============
</TABLE>
FSA-33
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Concluded):
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED): ASSET ALLOCATION SERIES:
------------------------------- ------------------------------------------------------------------
MFS ALLIANCE MERRILL
EMERGING CONSER- ALLIANCE LYNCH
GROWTH VATIVE EQ/PUTNAM GROWTH ALLIANCE WORLD
COMPANIES INVESTORS BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- -- 1,097,942,924 --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 825,008 3,489,106 55,321 28,639,790 44,449,206 12,249
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 763,267 17,445,149 128,104 92,985,008 59,417,722 76,157
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... -- 576,228 -- 2,373,243 1,662,704 --
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... -- -- -- 307,598 166,289 --
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 175,456,981 97,305,713 34,439,759 715,666,898 118,465,723 9,178,694
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 157,390 5,034 17,482 75,836 50,581 2,372
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... 104 103 -- 102 -- 95
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... -- 1,042,019 -- 2,169,556 580,524 --
------------ ------------ ----------- ------------ -------------- ----------
$177,202,750 $119,863,352 $34,640,666 $842,218,031 $1,322,735,673 $9,269,567
============ ============ =========== ============ ============== ==========
</TABLE>
FSA-34
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values
Shown below is accumulation unit value information for units outstanding.
<TABLE>
<CAPTION>
ALLIANCE MONEY MARKET FUND -- OLD CONTRACTS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $35.12 $33.52 $32.00 $30.44 $29.43 $28.75 $27.92 $26.47 $24.59 $22.66
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Unit value, end of period....... $36.76 $35.12 $33.52 $32.00 $30.44 $29.43 $28.75 $27.92 $26.47 $24.59
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of units outstanding,
end of period (000's)........ 117 119 129 140 147 168 204 246 289 310
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
<CAPTION>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 100 AND 200/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $29.41 $28.28 $27.22 $26.08 $25.41 $25.01 $24.48 $23.38 $21.89 $20.32
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Unit value, end of period....... $30.55 $29.41 $28.28 $27.22 $26.08 $25.41 $25.01 $24.48 $23.38 $21.89
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of EQUI-VEST units
outstanding, end of period
(000's)...................... 1,261 973 1,013 1,021 1,000 1,065 1,201 1,325 1,307 1,045
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of Momentum units
outstanding, end of
period (000's)............... 367 308 240 188 166 56
======= ======= ======= ======= ======= =======
<CAPTION>
ALLIANCE MONEY MARKET FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $116.21 $111.75 $107.55 $103.10 $100.47 $100.00
======== ======== ======== ======== ======== ========
Unit value, end of period........................ $120.76 $116.21 $111.75 $107.55 $103.10 $100.47
======== ======== ======== ======== ======== ========
Number of units outstanding, end of period (000's) 322 325 307 299 474 62
======== ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE MONEY MARKET FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $110.26 $105.65 $100.00
======== ======== ========
Unit value, end of period........................ $114.98 $110.26 $105.65
======== ======== ========
Number of units outstanding, end of period (000's) 10 13 13
======== ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-35
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $115.66 $111.21 $107.04 $102.61 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $120.19 $115.66 $111.21 $107.04 $102.61
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 262 146 165 81 63
======== ========= ========= ======== ========
</TABLE>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.68
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.68
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- EQUIPLAN CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- ------- -------- -------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $54.83 $51.34 $49.69 $44.04 $46.25 $42.04 $40.00 $35.17 $33.12 $28.89
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Unit value, end of period....... $58.81 $54.83 $51.34 $49.69 $44.04 $46.25 $42.04 $40.00 $35.17 $33.12
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Number of units outstanding,
end of period (000's)........ 45 50 55 50 54 58 66 74 82 91
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $118.98 $112.40 $109.80 $ 98.19 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $126.48 $118.98 $112.40 $109.80 $ 98.19
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 11 10 10 7 1
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-36
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $114.78 $108.45 $105.94 $ 94.76 $100.44 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $122.00 $114.78 $108.45 $105.94 $ 94.76 $100.44
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 76 77 81 88 64 1
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $112.32 $105.75 $100.00
======== ======== =========
Unit value, end of period........................ $119.81 $112.32 $105.75
======== ======== =========
Number of units outstanding, end of period (000's) 4 2 2
======== ======== =========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- EQUI-VEST
SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $118.98 $112.40 $109.80 $ 98.19 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $126.48 $118.98 $112.40 $109.80 $ 98.19
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 314 202 146 89 32
======== ========= ========= ======== ========
</TABLE>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.32
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-37
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.32
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $121.30 $112.65 $108.38 $ 93.87 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $130.07 $121.30 $112.65 $108.38 $ 93.87
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 15 10 7 4 1
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $127.99 $118.87 $114.38 $ 99.07 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $137.23 $127.99 $118.87 $114.38 $ 99.07
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 47 37 28 17 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-38
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $117.60 $108.84 $100.00
======== ======== =========
Unit value, end of period........................ $126.54 $117.60 $108.84
======== ======== =========
Number of units outstanding, end of period (000's) 1 1 1
======== ======== =========
<CAPTION>
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $121.30 $112.65 $108.38 $ 93.87 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $130.07 $121.30 $112.65 $108.38 $ 93.87
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 557 283 196 135 53
======== ========= ========= ======== ========
</TABLE>
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.62
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.62
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994* TO
1998 1997 1996 1995 DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $160.74 $137.53 $113.44 $ 95.88 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $150.42 $160.74 $137.53 $113.44 $ 95.88
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 37 29 18 7 1
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-39
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $171.56 $146.80 $121.10 $102.37 $106.74 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $160.53 $171.56 $146.80 $121.10 $102.37 $106.74
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 100 110 94 70 38 1
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996
1998 1997 TO DECEMBER 31, 1996*
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $149.49 $127.46 $100.00
======== ======== =========
Unit value, end of period........................ $140.38 $149.49 $127.46
======== ======== =========
Number of units outstanding, end of period (000's) 5 5 5
======== ======== =========
<CAPTION>
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $160.74 $137.53 $113.44 $ 95.88 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $150.42 $160.74 $137.53 $113.44 $ 95.88
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 1,164 831 444 209 99
======== ========= ========= ======== ========
</TABLE>
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 89.20
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-40
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 89.20
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $130.25
=========
Number of units outstanding, end of period (000's) 1
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.39
=========
Number of units outstanding, end of period (000's) 3
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.56
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-41
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.61
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------
<S> <C> <C>
Unit value, beginning of period.................. $121.04 $100.00
========= =========
Unit value, end of period........................ $130.25 $121.04
========= =========
Number of units outstanding, end of period (000's) 1,070 475
========= =========
</TABLE>
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.00
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.12
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-42
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $128.20
=========
Number of units outstanding, end of period (000's) 1
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.60
=========
Number of units outstanding, end of period (000's) 2
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.77
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.82
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-43
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.17 $100.00
========= ========
Unit value, end of period........................ $128.20 $115.17
========= ========
Number of units outstanding, end of period (000's) 581 250
========= ========
</TABLE>
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.48
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.60
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.30 $143.37 $121.02 $ 98.86 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $213.81 $179.30 $143.37 $121.02 $ 98.86
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 96 69 41 17 4
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-44
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- -------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.60 $143.63 $121.25 $ 99.06 $100.00
======== ======== ========= ======== ========
Unit value, end of period........................ $214.14 $179.60 $143.63 $121.25 $ 99.06
======== ======== ========= ======== ========
Number of units outstanding, end of period (000's) 209 183 121 67 9
======== ======== ========= ======== ========
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $155.11 $123.61 $100.00
======== ======== =========
Unit value, end of period........................ $185.60 $155.11 $123.61
======== ======== =========
Number of units outstanding, end of period (000's) 6 3 3
======== ======== =========
</TABLE>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $145.48 $115.81
======== ========
Unit value, end of period........................ $174.26 $145.48
======== ========
Number of units outstanding, end of period (000's) 2 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.30 $143.37 $121.02 $ 98.86 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $213.81 $179.30 $143.37 $121.02 $ 98.86
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 2,475 1,800 975 498 210
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-45
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.73
=========
Number of units outstanding, end of period (000's) 1
=========
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.73
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.66 $164.12 $135.94 $100.95 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.24 $214.66 $164.12 $135.94 $100.95
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 135 94 51 12 1
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.58 $164.08 $135.92 $100.94 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.11 $214.58 $164.08 $135.92 $100.94
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 283 231 128 44 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-46
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $170.23 $139.70 $100.00
======== ======== =========
Unit value, end of period........................ $215.84 $170.23 $139.70
======== ======== =========
Number of units outstanding, end of period (000's) 11 5 4
======== ======== =========
</TABLE>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $150.05 $114.21
======== ========
Unit value, end of period........................ $190.44 $150.05
======== ========
Number of units outstanding, end of period (000's) 4 3
======== ========
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.66 $164.12 $135.94 $100.95 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.24 $214.66 $164.12 $135.94 $100.95
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,805 2,686 1,486 592 47
======== ========= ========= ======== ========
</TABLE>
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.68
=========
Number of units outstanding, end of period (000's) 2
=========
- ------------------
*Date on which units were made available for sale.
FSA-47
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.69
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $127.67
=========
Number of units outstanding, end of period (000's) 3
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.58
=========
Number of units outstanding, end of period (000's) 2
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.75
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-48
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.80
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MERRILL LYNCH BASIC VALUE EQUITY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.97 $100.00
========= ========
Unit value, end of period........................ $127.67 $115.97
========= ========
Number of units outstanding, end of period (000's) 444 145
========= ========
</TABLE>
MERRILL LYNCH BASIC VALUE EQUITY FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 97.80
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 97.91
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-49
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- OLD CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $316.64 $246.57 $199.66 $151.67 $155.96 $125.72 $122.56 $ 89.56 $97.97 $78.37
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Unit value, end of period....... $407.19 $316.64 $246.57 $199.66 $151.67 $155.96 $125.72 $122.56 $89.56 $97.97
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of units outstanding,
end of period (000's)........ 264 307 345 387 438 467 525 598 694 780
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 100 AND 200/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $253.68 $199.05 $162.42 $124.32 $128.81 $104.63 $102.76 $ 75.67 $83.40 $67.22
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Unit value, end of period....... $323.75 $253.68 $199.05 $162.42 $124.32 $128.81 $104.63 $102.76 $75.67 $83.40
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 17,231 17,386 16,933 16,292 15,749 13,917 11,841 10,292 9,670 8,645
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of Momentum units
outstanding, end of
period (000's)............... 591 519 403 270 120
======== ======== ========= ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUIPLAN CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $342.99 $267.08 $216.27 $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05 $ 84.83
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
Unit value, end of period....... $441.07 $342.99 $267.08 $216.27 $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
Number of units outstanding,
end of period (000's)........ 70 85 96 108 119 124 135 144 157 177
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-50
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $207.00 $162.39 $132.47 $101.38 $105.01 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $264.22 $207.00 $162.39 $132.47 $101.38 $105.01
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 1,133 1,192 1,039 706 330 12
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $161.04 $125.89 $100.00
======== ======== =========
Unit value, end of period........................ $206.28 $161.04 $125.89
======== ======== =========
Number of units outstanding, end of period (000's) 40 37 140
======== ======== =========
</TABLE>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $148.44 $115.92
======== ========
Unit value, end of period........................ $190.33 $148.44
======== ========
Number of units outstanding, end of period (000's) 7 5
======== ========
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $198.12 $155.42 $126.78 $ 97.03 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $252.88 $198.12 $155.42 $126.78 $ 97.03
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 5,808 4,765 3,457 1,989 948
======== ========= ========= ======== ========
</TABLE>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.87
=========
Number of units outstanding, end of period (000's) 5
=========
- ------------------
*Date on which units were made available for sale.
FSA-51
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.87
=========
Number of units outstanding, end of period (000's) --
=========
MFS RESEARCH FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $140.83
=========
Number of units outstanding, end of period (000's) 4
=========
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.75
=========
Number of units outstanding, end of period (000's) 3
=========
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.92
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-52
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.97
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MFS RESEARCH FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.01 $100.00
========= ========
Unit value, end of period........................ $140.83 $115.01
========= ========
Number of units outstanding, end of period (000's) 720 236
========= ========
</TABLE>
MFS RESEARCH FUND -- EQUI-VEST SERIES 500 CONTRACTS: 134 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.99
=========
Number of units outstanding, end of period (000's) 1
=========
MFS RESEARCH FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.10
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-53
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $151.87 $138.00 $122.06 $104.12 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $182.50 $151.87 $138.00 $122.06 $104.12
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 156 147 116 62 16
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $154.12 $140.51 $124.30 $106.04 $102.14 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $185.78 $154.12 $140.51 $124.30 $106.04 $102.14
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 408 464 459 391 223 8
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $128.51 $116.37 $100.00
======== ======== =========
Unit value, end of period........................ $154.96 $128.51 $116.37
======== ======== =========
Number of units outstanding, end of period (000's) 11 12 13
======== ======== =========
</TABLE>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $122.12 $110.47
======== ========
Unit value, end of period........................ $147.40 $122.12
======== ========
Number of units outstanding, end of period (000's) 3 2
======== ========
<TABLE>
<CAPTION>
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $151.87 $138.00 $122.06 $104.12 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $182.50 $151.87 $138.00 $122.06 $104.12
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,395 3,369 2,995 2,121 1,305
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-54
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.37
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.37
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.92 $112.82 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.72 $107.92 $112.82 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 37 32 19 0
======== ========= ========= ========
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.89 $112.81 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.68 $107.89 $112.81 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 87 85 54 3
======== ========= ========= ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-55
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $108.42 $112.96 $100.00
======== ======== =========
Unit value, end of period........................ $118.67 $108.42 $112.96
======== ======== =========
Number of units outstanding, end of period (000's) 4 3 21
======== ======== =========
</TABLE>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $104.70 $108.98
======== ========
Unit value, end of period........................ $114.73 $104.70
======== ========
Number of units outstanding, end of period (000's) 1 788
======== ========
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.92 $112.83 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.72 $107.92 $112.83 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 971 968 763 141
======== ========= ========= ========
</TABLE>
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 93.00
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 93.00
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-56
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $109.49
=========
Number of units outstanding, end of period (000's) 1
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.95
=========
Number of units outstanding, end of period (000's) 3
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.11
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.16
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-57
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
T. ROWE PRICE INTERNATIONAL STOCK FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $ 97.61 $100.00
========= ========
Unit value, end of period........................ $109.49 $ 97.61
========= ========
Number of units outstanding, end of period (000's) 671 387
========= ========
</TABLE>
T. ROWE PRICE INTERNATIONAL STOCK FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.04
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.15
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 57.18
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.23
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-58
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.38
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.42
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED AUGUST 20, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $ 79.41 $100.00
========= ========
Unit value, end of period........................ $ 57.18 $ 79.41
========= ========
Number of units outstanding, end of period (000's) 217 109
========= ========
</TABLE>
MORGAN STANLEY EMERGING MARKETS EQUITY FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 81.40
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-59
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 81.49
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $90.75 $82.91 $68.73 $52.88 $55.68 $48.30 $50.51 $27.36 $25.86 $18.09
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Unit value, end of period....... $89.92 $90.75 $82.91 $68.73 $52.88 $55.68 $48.30 $50.51 $27.36 $25.86
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 25,634 28,030 27,945 25,821 24,787 21,496 17,986 12,962 9,545 8,134
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Number of Momentum units
outstanding, end of
period (000's)............... 1,401 1,437 1,281 969 620 258
======== ======== ========= ======== ======== =========
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $171.96 $157.31 $130.50 $100.49 $105.90 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $170.12 $171.96 $157.31 $130.50 $100.49 $105.90
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 1,098 1,220 1,070 718 350 12
======== ========= ========= ======== ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-60
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $137.72 $125.54 $100.00
======== ======== =========
Unit value, end of period........................ $136.73 $137.72 $125.54
======== ======== =========
Number of units outstanding, end of period (000's) 37 35 109
======== ======== =========
</TABLE>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $119.41 $108.74
======== ========
Unit value, end of period........................ $118.68 $119.41
======== ========
Number of units outstanding, end of period (000's) 8 7
======== ========
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $163.33 $149.41 $123.95 $ 95.45 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $161.59 $163.33 $149.41 $123.95 $ 95.45
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,342 3,226 2,468 1,310 664
======== ========= ========= ======== ========
</TABLE>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 90.25
=========
Number of units outstanding, end of period (000's) 1
=========
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 90.25
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-61
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $104.82
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.08
=========
Number of units outstanding, end of period (000's) 2
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.22
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.26
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-62
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
WARBURG PINCUS SMALL COMPANY VALUE FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $118.06 $100.00
========= ========
Unit value, end of period........................ $104.82 $118.06
========= ========
Number of units outstanding, end of period (000's) 859 577
========= ========
</TABLE>
WARBURG PINCUS SMALL COMPANY VALUE FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 82.78
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 82.88
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.55 $100.00
========= ========
Unit value, end of period........................ $118.57 $125.55
========= ========
Number of units outstanding, end of period (000's) 27 6
========= ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-63
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.54 $100.00
========= ========
Unit value, end of period........................ $118.55 $125.54
========= ========
Number of units outstanding, end of period (000's) 41 8
========= ========
</TABLE>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $119.25
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $119.45
=========
Number of units outstanding, end of period (000's) 1
=========
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.55 $100.00
========= ========
Unit value, end of period........................ $118.57 $125.55
========= ========
Number of units outstanding, end of period (000's) 1,101 488
========= ========
</TABLE>
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.93
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-64
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.94
=========
Number of units outstanding, end of period (000's) --
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $161.04
=========
Number of units outstanding, end of period (000's) 5
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.73
=========
Number of units outstanding, end of period (000's) 7
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.91
=========
Number of units outstanding, end of period (000's) --
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.96
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-65
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $121.34 $100.00
========= ========
Unit value, end of period........................ $161.04 $121.34
========= ========
Number of units outstanding, end of period (000's) 1,090 256
========= ========
</TABLE>
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.41
=========
Number of units outstanding, end of period (000's) 1
=========
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.53
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $130.98 $117.25 $112.97 $ 95.10 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $147.17 $130.98 $117.25 $112.97 $ 95.10
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 24 22 18 11 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-66
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $128.45 $114.99 $110.81 $ 93.29 $ 98.60 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $144.30 $128.45 $114.99 $110.81 $ 93.29 $ 98.60
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 121 125 136 129 92 10
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $122.71 $109.47 $100.00
======== ======== =========
Unit value, end of period........................ $138.35 $122.71 $109.47
======== ======== =========
Number of units outstanding, end of period (000's) 4 5 5
======== ======== =========
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------------------
1998 1997 1996 1995 1994
-------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $130.98 $117.25 $112.97 $ 95.10 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $147.17 $130.98 $117.25 $112.97 $ 95.10
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 661 553 567 491 325
======== ========= ========= ======== ========
</TABLE>
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.74
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.74
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-67
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
EQ/PUTNAM BALANCED FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $125.16
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.67
=========
Number of units outstanding, end of period (000's) 1
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.84
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.89
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-68
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $113.46 $100.00
========= ========
Unit value, end of period........................ $125.16 $113.46
========= ========
Number of units outstanding, end of period (000's) 275 109
========= ========
</TABLE>
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.05
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.17
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $153.69 $133.40 $120.08 $ 96.31 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $180.63 $153.69 $133.40 $120.08 $ 96.31
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 159 147 110 57 10
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-69
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $155.46 $134.95 $121.49 $ 97.45 $101.99 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $182.69 155.46 $134.95 $121.49 $ 97.45 $101.99
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 509 553 508 375 188 13
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $135.20 $116.95 $100.00
======== ======== =========
Unit value, end of period........................ $159.46 $135.20 $116.95
======== ======== =========
Number of units outstanding, end of period (000's) 15 14 15
======== ======== =========
</TABLE>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $126.72 $109.51
======== ========
Unit value, end of period........................ $149.61 $126.72
======== ========
Number of units outstanding, end of period (000's) 2 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $153.69 $133.40 $120.08 $ 96.31 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $180.63 $153.69 $133.40 $120.08 $ 96.31
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,962 3,704 3,325 2,113 1,023
======== ========= ========= ======== ========
</TABLE>
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.93
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-70
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.93
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE BALANCED FUND -- EQUI-VEST/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
------- -------- -------- -------- -------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $38.66 $34.06 $30.92 $26.18 $28.85 $26.04 $27.17 $19.40 $19.69 $15.80
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Unit value, end of period....... $45.07 $38.66 $34.06 $30.92 $26.18 $28.85 $26.04 $27.17 $19.40 $19.69
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 24,361 26,036 28,319 30,212 32,664 31,259 25,975 21,100 19,423 16,810
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Number of Momentum units
outstanding, end of
period (000's)............... 986 1,052 1,057 957 776 348
======= ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $136.14 $120.01 $108.95 $ 92.22 $101.63 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $158.63 $136.14 $120.01 $108.95 $ 92.22 $101.63
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 375 439 417 336 188 9
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $129.97 $114.16 $100.00
======== ======== =========
Unit value, end of period........................ $151.97 $129.97 $114.16
======== ======== =========
Number of units outstanding, end of period (000's) 11 10 48
======== ======== =========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-71
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $122.68 $100.00
======== ========
Unit value, end of period........................ $143.60 $122.68
======== ========
Number of units outstanding, end of period (000's) 1 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $135.29 $119.26 $108.26 $ 91.64 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $157.63 $135.29 $119.26 $108.26 $ 91.64
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 752 655 548 386 289
======== ========= ========= ======== ========
</TABLE>
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.39
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.39
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-72
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $109.37
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.28
=========
Number of units outstanding, end of period (000's) 1
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.44
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.49
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-73
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Concluded):
<TABLE>
<CAPTION>
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $103.77 $100.00
========= ========
Unit value, end of period........................ $109.37 $103.77
========= ========
Number of units outstanding, end of period (000's) 84 52
========= ========
</TABLE>
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.86
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.96
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-74
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and comprehensive
income and of cash flows present fairly, in all material respects, the financial
position of The Equitable Life Assurance Society of the United States and its
subsidiaries ("Equitable Life") at December 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of Equitable
Life's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, Equitable Life
changed its method of accounting for long-lived assets in 1996.
/s/PricewaterhouseCoopers LLP
- -----------------------------
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 18,993.7 $ 19,630.9
Held to maturity, at amortized cost..................................... 125.0 -
Mortgage loans on real estate............................................. 2,809.9 2,611.4
Equity real estate........................................................ 1,676.9 2,495.1
Policy loans.............................................................. 2,086.7 2,422.9
Other equity investments.................................................. 713.3 951.5
Investment in and loans to affiliates..................................... 928.5 731.1
Other invested assets..................................................... 808.2 612.2
----------------- -----------------
Total investments..................................................... 28,142.2 29,455.1
Cash and cash equivalents................................................... 1,245.5 300.5
Deferred policy acquisition costs........................................... 3,563.8 3,236.6
Amounts due from discontinued operations.................................... 2.7 572.8
Other assets................................................................ 3,051.9 2,687.4
Closed Block assets......................................................... 8,632.4 8,566.6
Separate Accounts assets.................................................... 43,302.3 36,538.7
----------------- -----------------
Total Assets................................................................ $ 87,940.8 $ 81,357.7
================= =================
LIABILITIES
Policyholders' account balances............................................. $ 20,889.7 $ 21,579.5
Future policy benefits and other policyholders' liabilities................. 4,694.2 4,553.8
Short-term and long-term debt............................................... 1,181.7 1,716.7
Other liabilities........................................................... 3,474.3 3,267.2
Closed Block liabilities.................................................... 9,077.0 9,073.7
Separate Accounts liabilities............................................... 43,211.3 36,306.3
----------------- -----------------
Total liabilities..................................................... 82,528.2 76,497.2
----------------- -----------------
Commitments and contingencies (Notes 11, 13, 14, 15 and 16)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 3,110.2 3,105.8
Retained earnings........................................................... 1,944.1 1,235.9
Accumulated other comprehensive income...................................... 355.8 516.3
----------------- -----------------
Total shareholder's equity............................................ 5,412.6 4,860.5
----------------- -----------------
Total Liabilities and Shareholder's Equity.................................. $ 87,940.8 $ 81,357.7
================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 1,056.2 $ 950.6 $ 874.0
Premiums...................................................... 588.1 601.5 597.6
Net investment income......................................... 2,228.1 2,282.8 2,203.6
Investment gains (losses), net................................ 100.2 (45.2) (9.8)
Commissions, fees and other income............................ 1,503.0 1,227.2 1,081.8
Contribution from the Closed Block............................ 87.1 102.5 125.0
----------------- ----------------- -----------------
Total revenues.......................................... 5,562.7 5,119.4 4,872.2
----------------- ----------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,153.0 1,266.2 1,270.2
Policyholders' benefits....................................... 1,024.7 978.6 1,317.7
Other operating costs and expenses............................ 2,201.2 2,203.9 2,075.7
----------------- ----------------- -----------------
Total benefits and other deductions..................... 4,378.9 4,448.7 4,663.6
----------------- ----------------- -----------------
Earnings from continuing operations before Federal
income taxes, minority interest and cumulative
effect of accounting change................................. 1,183.8 670.7 208.6
Federal income taxes.......................................... 353.1 91.5 9.7
Minority interest in net income of consolidated subsidiaries.. 125.2 54.8 81.7
----------------- ----------------- -----------------
Earnings from continuing operations before cumulative
effect of accounting change................................. 705.5 524.4 117.2
Discontinued operations, net of Federal income taxes.......... 2.7 (87.2) (83.8)
Cumulative effect of accounting change, net of Federal
income taxes................................................ - - (23.1)
----------------- ----------------- -----------------
Net Earnings.................................................. $ 708.2 $ 437.2 $ 10.3
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
Common stock, at par value, beginning and end of year......... $ 2.5 $ 2.5 $ 2.5
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year............. 3,105.8 3,105.8 3,105.8
Additional capital in excess of par value..................... 4.4 - -
----------------- ----------------- -----------------
Capital in excess of par value, end of year................... 3,110.2 3,105.8 3,105.8
Retained earnings, beginning of year.......................... 1,235.9 798.7 788.4
Net earnings.................................................. 708.2 437.2 10.3
----------------- ----------------- -----------------
Retained earnings, end of year................................ 1,944.1 1,235.9 798.7
----------------- ----------------- -----------------
Accumulated other comprehensive income,
beginning of year........................................... 516.3 177.0 361.4
Other comprehensive income.................................... (160.5) 339.3 (184.4)
----------------- ----------------- -----------------
Accumulated other comprehensive income, end of year........... 355.8 516.3 177.0
----------------- ----------------- -----------------
Total Shareholder's Equity, End of Year....................... $ 5,412.6 $ 4,860.5 $ 4,084.0
================= ================= =================
COMPREHENSIVE INCOME
Net earnings.................................................. $ 708.2 $ 437.2 $ 10.3
----------------- ----------------- -----------------
Change in unrealized gains (losses), net of reclassification
adjustment.................................................. (149.5) 343.7 (206.6)
Minimum pension liability adjustment.......................... (11.0) (4.4) 22.2
----------------- ----------------- -----------------
Other comprehensive income.................................... (160.5) 339.3 (184.4)
----------------- ----------------- -----------------
Comprehensive Income.......................................... $ 547.7 $ 776.5 $ (174.1)
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
Net earnings.................................................. $ 708.2 $ 437.2 $ 10.3
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Interest credited to policyholders' account balances........ 1,153.0 1,266.2 1,270.2
Universal life and investment-type product
policy fee income......................................... (1,056.2) (950.6) (874.0)
Investment (gains) losses................................... (100.2) 45.2 9.8
Change in Federal income tax payable........................ 123.1 (74.4) (197.1)
Other, net.................................................. (324.9) 169.4 330.2
----------------- ----------------- -----------------
Net cash provided by operating activities..................... 503.0 893.0 549.4
----------------- ----------------- -----------------
Cash flows from investing activities:
Maturities and repayments................................... 2,289.0 2,702.9 2,275.1
Sales....................................................... 16,972.1 10,385.9 8,964.3
Purchases................................................... (18,578.5) (13,205.4) (12,559.6)
Decrease (increase) in short-term investments............... 102.4 (555.0) 450.3
Decrease in loans to discontinued operations................ 660.0 420.1 1,017.0
Sale of subsidiaries........................................ - 261.0 -
Other, net.................................................. (341.8) (612.6) (281.0)
----------------- ----------------- -----------------
Net cash provided (used) by investing activities.............. 1,103.2 (603.1) (133.9)
----------------- ----------------- -----------------
Cash flows from financing activities:
Policyholders' account balances:
Deposits.................................................. 1,508.1 1,281.7 1,925.4
Withdrawals............................................... (1,724.6) (1,886.8) (2,385.2)
Net (decrease) increase in short-term financings............ (243.5) 419.9 (.3)
Repayments of long-term debt................................ (24.5) (196.4) (124.8)
Payment of obligation to fund accumulated deficit of
discontinued operations................................... (87.2) (83.9) -
Other, net.................................................. (89.5) (62.7) (66.5)
----------------- ----------------- -----------------
Net cash used by financing activities......................... (661.2) (528.2) (651.4)
----------------- ----------------- -----------------
Change in cash and cash equivalents........................... 945.0 (238.3) (235.9)
Cash and cash equivalents, beginning of year.................. 300.5 538.8 774.7
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Year........................ $ 1,245.5 $ 300.5 $ 538.8
================= ================= =================
Supplemental cash flow information
Interest Paid............................................... $ 130.7 $ 217.1 $ 109.9
================= ================= =================
Income Taxes Paid (Refunded)................................ $ 254.3 $ 170.0 $ (10.0)
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") is a wholly owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). Equitable Life's insurance
business is conducted principally by Equitable Life and its wholly owned
life insurance subsidiaries, Equitable of Colorado ("EOC"), and, prior
to December 31, 1996, Equitable Variable Life Insurance Company
("EVLICO"). Effective January 1, 1997, EVLICO was merged into Equitable
Life, which continues to conduct the Company's insurance business.
Equitable Life's investment management business, which comprises the
Investment Services segment, is conducted principally by Alliance
Capital Management L.P. ("Alliance"), in which Equitable Life has a
57.7% ownership interest, and Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), an investment banking and brokerage affiliate in which
Equitable Life has a 32.5% ownership interest. AXA ("AXA"), a French
holding company for an international group of insurance and related
financial services companies, is the Holding Company's largest
shareholder, owning approximately 58.5% at December 31, 1998 (53.4% if
all securities convertible into, and options on, common stock were to be
converted or exercised).
The Insurance segment offers a variety of traditional, variable and
interest-sensitive life insurance products, disability income, annuity
products, mutual fund and other investment products to individuals and
small groups. It also administers traditional participating group
annuity contracts with conversion features, generally for corporate
qualified pension plans, and association plans which provide full
service retirement programs for individuals affiliated with professional
and trade associations. This segment includes Separate Accounts for
individual insurance and annuity products.
The Investment Services segment includes Alliance, the results of DLJ
which are accounted for on an equity basis, and, through June 10, 1997,
Equitable Real Estate Investment Management, Inc. ("EREIM"), a real
estate investment management subsidiary which was sold. Alliance
provides diversified investment fund management services to a variety of
institutional clients, including pension funds, endowments, and foreign
financial institutions, as well as to individual investors, principally
through a broad line of mutual funds. This segment includes
institutional Separate Accounts which provide various investment options
for large group pension clients, primarily deferred benefit contribution
plans, through pooled or single group accounts. DLJ's businesses include
securities underwriting, sales and trading, merchant banking, financial
advisory services, investment research, venture capital, correspondent
brokerage services, online interactive brokerage services and asset
management. DLJ serves institutional, corporate, governmental and
individual clients both domestically and internationally. EREIM provided
real estate investment management services, property management
services, mortgage servicing and loan asset management, and agricultural
investment management.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP") which
require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The accompanying consolidated financial statements include the accounts
of Equitable Life and its wholly owned life insurance subsidiary
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance and EREIM (see Note 5); and those partnerships and
joint ventures in which Equitable Life or its subsidiaries has control
F-6
<PAGE>
and a majority economic interest (collectively, including its
consolidated subsidiaries, the "Company"). The Company's investment in
DLJ is reported on the equity basis of accounting. Closed Block assets,
liabilities and results of operations are presented in the consolidated
financial statements as single line items (see Note 7). Unless
specifically stated, all other footnote disclosures contained herein
exclude the Closed Block related amounts.
All significant intercompany transactions and balances except those with
the Closed Block and discontinued operations (see Note 8) have been
eliminated in consolidation. The years "1998," "1997" and "1996" refer
to the years ended December 31, 1998, 1997 and 1996, respectively.
Certain reclassifications have been made in the amounts presented for
prior periods to conform these periods with the 1998 presentation.
Closed Block
On July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain individual participating policies which were in force
on that date. The assets allocated to the Closed Block, together with
anticipated revenues from policies included in the Closed Block, were
reasonably expected to be sufficient to support such business, including
provision for payment of claims, certain expenses and taxes, and for
continuation of dividend scales payable in 1991, assuming the experience
underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
Closed Block policyholders and will not revert to the benefit of the
Holding Company. No reallocation, transfer, borrowing or lending of
assets can be made between the Closed Block and other portions of
Equitable Life's General Account, any of its Separate Accounts or any
affiliate of Equitable Life without the approval of the New York
Superintendent of Insurance (the "Superintendent"). Closed Block assets
and liabilities are carried on the same basis as similar assets and
liabilities held in the General Account. The excess of Closed Block
liabilities over Closed Block assets represents the expected future
post-tax contribution from the Closed Block which would be recognized in
income over the period the policies and contracts in the Closed Block
remain in force.
Discontinued Operations
Discontinued operations include the Group Non-Participating Wind-Up
Annuities ("Wind-Up Annuities") and the Guaranteed Interest Contract
("GIC") lines of business. An allowance was established for the premium
deficiency reserve for Wind-Up Annuities and estimated future losses of
the GIC line of business. Management reviews the adequacy of the
allowance each quarter and believes the allowance for future losses at
December 31, 1998 is adequate to provide for all future losses; however,
the quarterly allowance review continues to involve numerous estimates
and subjective judgments regarding the expected performance of
Discontinued Operations Investment Assets. There can be no assurance the
losses provided for will not differ from the losses ultimately realized.
To the extent actual results or future projections of the discontinued
operations differ from management's current best estimates and
assumptions underlying the allowance for future losses, the difference
would be reflected in the consolidated statements of earnings in
discontinued operations. In particular, to the extent income, sales
proceeds and holding periods for equity real estate differ from
management's previous assumptions, periodic adjustments to the allowance
are likely to result (see Note 8).
Accounting Changes
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosures about Segments of an Enterprise and Related Information".
SFAS No. 131 establishes standards for public companies to report
information about operating segments in annual and interim financial
statements issued to shareholders. It also specifies related disclosure
requirements for products and services, geographic areas and major
customers. Generally, financial information must be reported using the
basis management uses to make operating decisions and to evaluate
business performance. The Company implemented SFAS No. 131 effective
December 31, 1998 and continues to identify two operating segments to
reflect its major businesses: Insurance and Investment Services. While
the segment descriptions are the same as those previously reported,
certain amounts have been reattributed between the two reportable
segments. Prior period comparative segment information has been
restated.
F-7
<PAGE>
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use,"
which requires capitalization of external and certain internal costs
incurred to obtain or develop internal-use computer software during the
application development stage. The Company applied the provisions of SOP
98-1 prospectively effective January 1, 1998. The adoption of SOP 98-1
did not have a material impact on the Company's consolidated financial
statements. Capitalized internal-use software is amortized on a
straight-line basis over the estimated useful life of the software.
The Company implemented SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," as of
January 1, 1996. SFAS No. 121 requires long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate the carrying value of such assets may
not be recoverable. Effective with SFAS No. 121's adoption, impaired
real estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Before implementing SFAS No.
121, valuation allowances on real estate held for the production of
income were computed using the forecasted cash flows of the respective
properties discounted at a rate equal to the Company's cost of funds.
Adoption of the statement resulted in the release of valuation
allowances of $152.4 million and recognition of impairment losses of
$144.0 million on real estate held for production of income. Real estate
which management intends to sell or abandon is classified as real estate
held for sale. Valuation allowances on real estate held for sale
continue to be computed using the lower of depreciated cost or estimated
fair value, net of disposition costs. Initial adoption of the impairment
requirements of SFAS No. 121 to other assets to be disposed of resulted
in a charge for the cumulative effect of an accounting change of $23.1
million, net of a Federal income tax benefit of $12.4 million, due to
the writedown to fair value of building improvements relating to
facilities vacated in 1996.
New Accounting Pronouncements
In October 1998, the FASB issued SFAS No. 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage
Loans Held for Sale by a Mortgage Banking Enterprise," which amends
existing accounting and reporting standards for certain activities of
mortgage banking enterprises and other enterprises that conduct
operations that are substantially similar to the primary operations of a
mortgage banking enterprise. This statement is effective for the first
fiscal quarter beginning after December 15, 1998. This statement is not
expected to have a material impact on the Company's consolidated
financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain
derivatives embedded in other contracts, and for hedging activities. It
requires all derivatives to be recognized on the balance sheet at fair
value. The accounting for changes in the fair value of a derivative
depends on its intended use. Derivatives not used in hedging activities
must be adjusted to fair value through earnings. Changes in the fair
value of derivatives used in hedging activities will, depending on the
nature of the hedge, either be offset in earnings against the change in
fair value of the hedged item attributable to the risk being hedged or
recognized in other comprehensive income until the hedged item affects
earnings. For all hedging activities, the ineffective portion of a
derivative's change in fair value will be immediately recognized in
earnings.
SFAS No. 133 requires adoption in fiscal years beginning after June 15,
1999 and permits early adoption as of the beginning of any fiscal
quarter following issuance of the statement. Retroactive application to
financial statements of prior periods is prohibited. The Company expects
to adopt SFAS No. 133 effective January 1, 2000. Adjustments resulting
from initial adoption of the new requirements will be reported in a
manner similar to the cumulative effect of a change in accounting
principle and will be reflected in net income or accumulated other
comprehensive income based upon existing hedging relationships, if any.
Management currently is assessing the impact of adoption. However,
Alliance's adoption is not expected to have a significant impact on the
Company's consolidated balance sheet or statement of earnings. Also,
since most of DLJ's derivatives are carried at fair values, the
Company's consolidated earnings and financial position are not expected
to be significantly affected by DLJ's adoption of the new requirements.
F-8
<PAGE>
In late 1998, the AICPA issued SOP 98-7, "Deposit Accounting: Accounting
for Insurance and Reinsurance Contracts that Do Not Transfer Insurance
Risk". This SOP, effective for fiscal years beginning after June 15,
1999, provides guidance to both the insured and insurer on how to apply
the deposit method of accounting when it is required for insurance and
reinsurance contracts that do not transfer insurance risk. The SOP does
not address or change the requirements as to when deposit accounting
should be applied. SOP 98-7 applies to all entities and all insurance
and reinsurance contracts that do not transfer insurance risk except for
long-duration life and health insurance contracts. This SOP is not
expected to have a material impact on the Company's consolidated
financial statements.
In December 1997, the AICPA issued SOP 97-3, "Accounting by Insurance
and Other Enterprises for Insurance-Related Assessments". SOP 97-3
provides guidance for assessments related to insurance activities and
requirements for disclosure of certain information. SOP 97-3 is
effective for financial statements issued for periods beginning after
December 31, 1998. Restatement of previously issued financial statements
is not required. SOP 97-3 is not expected to have a material impact on
the Company's consolidated financial statements.
Valuation of Investments
Fixed maturities identified as available for sale are reported at
estimated fair value. Fixed maturities, which the Company has both the
ability and the intent to hold to maturity, are stated principally at
amortized cost. The amortized cost of fixed maturities is adjusted for
impairments in value deemed to be other than temporary.
Valuation allowances are netted against the asset categories to which
they apply.
Mortgage loans on real estate are stated at unpaid principal balances,
net of unamortized discounts and valuation allowances. Valuation
allowances are based on the present value of expected future cash flows
discounted at the loan's original effective interest rate or the
collateral value if the loan is collateral dependent. However, if
foreclosure is or becomes probable, the measurement method used is
collateral value.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired
in satisfaction of debt is valued at estimated fair value. Impaired real
estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Valuation allowances on real
estate held for sale are computed using the lower of depreciated cost or
current estimated fair value, net of disposition costs. Depreciation is
discontinued on real estate held for sale. Prior to the adoption of SFAS
No. 121, valuation allowances on real estate held for production of
income were computed using the forecasted cash flows of the respective
properties discounted at a rate equal to the Company's cost of funds.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control or a majority economic interest are reported on the equity
basis of accounting and are included either with equity real estate or
other equity investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
F-9
<PAGE>
Cash and cash equivalents includes cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity
of three months or less.
All securities are recorded in the consolidated financial statements on
a trade date basis.
Net Investment Income, Investment Gains, Net and Unrealized Investment
Gains (Losses)
Net investment income and realized investment gains (losses)
(collectively, "investment results") related to certain participating
group annuity contracts which are passed through to the contractholders
are reflected as interest credited to policyholders' account balances.
Realized investment gains (losses) are determined by specific
identification and are presented as a component of revenue. Changes in
valuation allowances are included in investment gains (losses).
Unrealized investment gains and losses on equity securities and fixed
maturities available for sale held by the Company are accounted for as a
separate component of accumulated comprehensive income, net of related
deferred Federal income taxes, amounts attributable to discontinued
operations, participating group annuity contracts and deferred policy
acquisition costs ("DAC") related to universal life and investment-type
products and participating traditional life contracts.
Recognition of Insurance Income and Related Expenses
Premiums from universal life and investment-type contracts are reported
as deposits to policyholders' account balances. Revenues from these
contracts consist of amounts assessed during the period against
policyholders' account balances for mortality charges, policy
administration charges and surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the
period in excess of related policyholders' account balances.
Premiums from participating and non-participating traditional life and
annuity policies with life contingencies generally are recognized as
income when due. Benefits and expenses are matched with such income so
as to result in the recognition of profits over the life of the
contracts. This match is accomplished by means of the provision for
liabilities for future policy benefits and the deferral and subsequent
amortization of policy acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period
over which benefits are provided, premiums are recorded as income when
due with any excess profit deferred and recognized in income in a
constant relationship to insurance in force or, for annuities, the
amount of expected future benefit payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with
and are primarily related to the production of new business, are
deferred. DAC is subject to recoverability testing at the time of policy
issue and loss recognition testing at the end of each accounting period.
For universal life products and investment-type products, DAC is
amortized over the expected total life of the contract group (periods
ranging from 25 to 35 years and 5 to 17 years, respectively) as a
constant percentage of estimated gross profits arising principally from
investment results, mortality and expense margins and surrender charges
based on historical and anticipated future experience, updated at the
end of each accounting period. The effect on the amortization of DAC of
revisions to estimated gross profits is reflected in earnings in the
period such estimated gross profits are revised. The effect on the DAC
asset that would result from realization of unrealized gains (losses) is
recognized with an offset to accumulated other comprehensive income in
consolidated shareholder's equity as of the balance sheet date.
F-10
<PAGE>
For participating traditional life policies (substantially all of which
are in the Closed Block), DAC is amortized over the expected total life
of the contract group (40 years) as a constant percentage based on the
present value of the estimated gross margin amounts expected to be
realized over the life of the contracts using the expected investment
yield. At December 31, 1998, the expected investment yield, excluding
policy loans, generally ranged from 7.29% grading to 6.5% over a 20 year
period. Estimated gross margin includes anticipated premiums and
investment results less claims and administrative expenses, changes in
the net level premium reserve and expected annual policyholder
dividends. The effect on the amortization of DAC of revisions to
estimated gross margins is reflected in earnings in the period such
estimated gross margins are revised. The effect on the DAC asset that
would result from realization of unrealized gains (losses) is recognized
with an offset to accumulated comprehensive income in consolidated
shareholder's equity as of the balance sheet date.
For non-participating traditional life and annuity policies with life
contingencies, DAC is amortized in proportion to anticipated premiums.
Assumptions as to anticipated premiums are estimated at the date of
policy issue and are consistently applied during the life of the
contracts. Deviations from estimated experience are reflected in
earnings in the period such deviations occur. For these contracts, the
amortization periods generally are for the total life of the policy.
For individual health benefit insurance, DAC is amortized over the
expected average life of the contracts (10 years for major medical
policies and 20 years for disability income ("DI") products) in
proportion to anticipated premium revenue at time of issue.
Policyholders' Account Balances and Future Policy Benefits
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account
values represents an accumulation of gross premium payments plus
credited interest less expense and mortality charges and withdrawals.
For participating traditional life policies, future policy benefit
liabilities are calculated using a net level premium method on the basis
of actuarial assumptions equal to guaranteed mortality and dividend fund
interest rates. The liability for annual dividends represents the
accrual of annual dividends earned. Terminal dividends are accrued in
proportion to gross margins over the life of the contract.
For non-participating traditional life insurance policies, future policy
benefit liabilities are estimated using a net level premium method on
the basis of actuarial assumptions as to mortality, persistency and
interest established at policy issue. Assumptions established at policy
issue as to mortality and persistency are based on the Insurance Group's
experience which, together with interest and expense assumptions,
includes a margin for adverse deviation. When the liabilities for future
policy benefits plus the present value of expected future gross premiums
for a product are insufficient to provide for expected future policy
benefits and expenses for that product, DAC is written off and
thereafter, if required, a premium deficiency reserve is established by
a charge to earnings. Benefit liabilities for traditional annuities
during the accumulation period are equal to accumulated contractholders'
fund balances and after annuitization are equal to the present value of
expected future payments. Interest rates used in establishing such
liabilities range from 2.25% to 11.5% for life insurance liabilities and
from 2.25% to 13.5% for annuity liabilities.
During the fourth quarter of 1996 a loss recognition study of
participating group annuity contracts and conversion annuities ("Pension
Par") was completed which included management's revised estimate of
assumptions, such as expected mortality and future investment returns.
The study's results prompted management to establish a premium
deficiency reserve which decreased earnings from continuing operations
and net earnings by $47.5 million ($73.0 million pre-tax).
Individual health benefit liabilities for active lives are estimated
using the net level premium method and assumptions as to future
morbidity, withdrawals and interest. Benefit liabilities for disabled
lives are estimated using the present value of benefits method and
experience assumptions as to claim terminations, expenses and interest.
F-11
<PAGE>
During the fourth quarter of 1996, the Company completed a loss
recognition study of the DI business which incorporated management's
revised estimates of future experience with regard to morbidity,
investment returns, claims and administration expenses and other
factors. The study indicated DAC was not recoverable and the reserves
were not sufficient. Earnings from continuing operations and net
earnings decreased by $208.0 million ($320.0 million pre-tax) as a
result of strengthening DI reserves by $175.0 million and writing off
unamortized DAC of $145.0 million related to DI products issued prior to
July 1993. The determination of DI reserves requires making assumptions
and estimates relating to a variety of factors, including morbidity and
interest rates, claims experience and lapse rates based on then known
facts and circumstances. Such factors as claim incidence and termination
rates can be affected by changes in the economic, legal and regulatory
environments and work ethic. While management believes its Pension Par
and DI reserves have been calculated on a reasonable basis and are
adequate, there can be no assurance reserves will be sufficient to
provide for future liabilities.
Claim reserves and associated liabilities for individual DI and major
medical policies were $938.6 million and $886.7 million at December 31,
1998 and 1997, respectively. Incurred benefits (benefits paid plus
changes in claim reserves) and benefits paid for individual DI and major
medical policies (excluding reserve strengthening in 1996) are
summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 202.1 $ 190.2 $ 189.0
Incurred benefits related to prior years........... 22.2 2.1 69.1
----------------- ---------------- -----------------
Total Incurred Benefits............................ $ 224.3 $ 192.3 $ 258.1
================= ================ =================
Benefits paid related to current year.............. $ 17.0 $ 28.8 $ 32.6
Benefits paid related to prior years............... 155.4 146.2 153.3
----------------- ---------------- -----------------
Total Benefits Paid................................ $ 172.4 $ 175.0 $ 185.9
================= ================ =================
</TABLE>
Policyholders' Dividends
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by
Equitable Life's board of directors. The aggregate amount of
policyholders' dividends is related to actual interest, mortality,
morbidity and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by Equitable Life.
At December 31, 1998, participating policies, including those in the
Closed Block, represent approximately 19.9% ($49.3 billion) of directly
written life insurance in force, net of amounts ceded.
Federal Income Taxes
The Company files a consolidated Federal income tax return with the
Holding Company and its consolidated subsidiaries. Current Federal
income taxes are charged or credited to operations based upon amounts
estimated to be payable or recoverable as a result of taxable operations
for the current year. Deferred income tax assets and liabilities are
recognized based on the difference between financial statement carrying
amounts and income tax bases of assets and liabilities using enacted
income tax rates and laws.
Separate Accounts
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that
arise from any other business of the Insurance Group. Separate Accounts
assets are subject to General Account claims only to the extent the
value of such assets exceeds Separate Accounts liabilities.
F-12
<PAGE>
Assets and liabilities of the Separate Accounts, representing net
deposits and accumulated net investment earnings less fees, held
primarily for the benefit of contractholders, and for which the
Insurance Group does not bear the investment risk, are shown as separate
captions in the consolidated balance sheets. The Insurance Group bears
the investment risk on assets held in one Separate Account; therefore,
such assets are carried on the same basis as similar assets held in the
General Account portfolio. Assets held in the other Separate Accounts
are carried at quoted market values or, where quoted values are not
available, at estimated fair values as determined by the Insurance
Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate
Accounts liabilities. For 1998, 1997 and 1996, investment results of
such Separate Accounts were $4,591.0 million, $3,411.1 million and
$2,970.6 million, respectively.
Deposits to Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are
included in revenues.
Employee Stock Option Plan
The Company accounts for stock option plans sponsored by the Holding
Company, DLJ and Alliance in accordance with the provisions of
Accounting Principles Board Opinion ("APB") No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. In accordance
with the Statement, compensation expense is recorded on the date of
grant only if the current market price of the underlying stock exceeds
the option price. See Note 22 for the pro forma disclosures for the
Holding Company, DLJ and Alliance required by SFAS No. 123, "Accounting
for Stock-Based Compensation".
F-13
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
----------------- ----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C> <C>
December 31, 1998
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,520.8 $ 793.6 $ 379.6 $ 14,934.8
Mortgage-backed.................... 1,807.9 23.3 .9 1,830.3
U.S. Treasury securities and
U.S. government and
agency securities................ 1,464.1 107.6 .7 1,571.0
States and political subdivisions.. 55.0 9.9 - 64.9
Foreign governments................ 363.3 20.9 30.0 354.2
Redeemable preferred stock......... 242.7 7.0 11.2 238.5
----------------- ----------------- ---------------- -----------------
Total Available for Sale............... $ 18,453.8 $ 962.3 $ 422.4 $ 18,993.7
================= ================= ================ =================
Held to Maturity: Corporate......... $ 125.0 $ - $ - $ 125.0
================= ================= ================ =================
Equity Securities:
Common stock......................... $ 58.3 $ 114.9 $ 22.5 $ 150.7
================= ================= ================ =================
December 31, 1997
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,850.5 $ 785.0 $ 74.5 $ 15,561.0
Mortgage-backed.................... 1,702.8 23.5 1.3 1,725.0
U.S. Treasury securities and
U.S. government and
agency securities................ 1,583.2 83.9 .6 1,666.5
States and political subdivisions.. 52.8 6.8 .1 59.5
Foreign governments................ 442.4 44.8 2.0 485.2
Redeemable preferred stock......... 128.0 6.7 1.0 133.7
----------------- ----------------- ---------------- -----------------
Total Available for Sale............... $ 18,759.7 $ 950.7 $ 79.5 $ 19,630.9
================= ================= ================ =================
Equity Securities:
Common stock......................... $ 408.4 $ 48.7 $ 15.0 $ 442.1
================= ================= ================ =================
</TABLE>
For publicly traded fixed maturities and equity securities, estimated
fair value is determined using quoted market prices. For fixed
maturities without a readily ascertainable market value, the Company
determines an estimated fair value using a discounted cash flow
approach, including provisions for credit risk, generally based on the
assumption such securities will be held to maturity. Estimated fair
values for equity securities, substantially all of which do not have a
readily ascertainable market value, have been determined by the Company.
Such estimated fair values do not necessarily represent the values for
which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1998 and 1997, securities
without a readily ascertainable market value having an amortized cost of
$3,539.9 million and $3,759.2 million, respectively, had estimated fair
values of $3,748.5 million and $3,903.9 million, respectively.
F-14
<PAGE>
The contractual maturity of bonds at December 31, 1998 is shown below:
<TABLE>
<CAPTION>
Available for Sale
------------------------------------
Amortized Estimated
Cost Fair Value
---------------- -----------------
(In Millions)
<S> <C> <C>
Due in one year or less................................................ $ 324.8 $ 323.4
Due in years two through five.......................................... 3,778.2 3,787.9
Due in years six through ten........................................... 6,543.4 6,594.1
Due after ten years.................................................... 5,756.8 6,219.5
Mortgage-backed securities............................................. 1,807.9 1,830.3
---------------- -----------------
Total.................................................................. $ 18,211.1 $ 18,755.2
================ =================
</TABLE>
Corporate bonds held to maturity with an amortized cost and estimated
fair value of $125.0 million are due in one year or less.
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher
than normal credit risks associated with such securities by monitoring
concentrations in any single issuer or a particular industry group.
Certain of these corporate high yield securities are classified as other
than investment grade by the various rating agencies, i.e., a rating
below Baa or National Association of Insurance Commissioners ("NAIC")
designation of 3 (medium grade), 4 or 5 (below investment grade) or 6
(in or near default). At December 31, 1998, approximately 15.1% of the
$18,336.1 million aggregate amortized cost of bonds held by the Company
was considered to be other than investment grade.
In addition, the Insurance Group is an equity investor in limited
partnership interests which primarily invest in securities considered to
be other than investment grade.
Fixed maturity investments with restructured or modified terms are not
material.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 384.5 $ 137.1 $ 325.3
SFAS No. 121 release............................... - - (152.4)
Additions charged to income........................ 86.2 334.6 125.0
Deductions for writedowns and
asset dispositions............................... (240.1) (87.2) (160.8)
----------------- ---------------- -----------------
Balances, End of Year.............................. $ 230.6 $ 384.5 $ 137.1
================= ================ =================
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 34.3 $ 55.8 $ 50.4
Equity real estate............................... 196.3 328.7 86.7
----------------- ---------------- -----------------
Total.............................................. $ 230.6 $ 384.5 $ 137.1
================= ================ =================
</TABLE>
F-15
<PAGE>
At December 31, 1998, the carrying value of fixed maturities which are
non-income producing for the twelve months preceding the consolidated
balance sheet date was $60.8 million.
At December 31, 1998 and 1997, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more
past due or in foreclosure (collectively, "problem mortgage loans on
real estate") had an amortized cost of $7.0 million (0.2% of total
mortgage loans on real estate) and $23.4 million (0.9% of total mortgage
loans on real estate), respectively.
The payment terms of mortgage loans on real estate may from time to time
be restructured or modified. The investment in restructured mortgage
loans on real estate, based on amortized cost, amounted to $115.1
million and $183.4 million at December 31, 1998 and 1997, respectively.
Gross interest income on restructured mortgage loans on real estate that
would have been recorded in accordance with the original terms of such
loans amounted to $10.3 million, $17.2 million and $35.5 million in
1998, 1997 and 1996, respectively. Gross interest income on these loans
included in net investment income aggregated $8.3 million, $12.7 million
and $28.2 million in 1998, 1997 and 1996, respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------------------
1998 1997
------------------- -------------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses.................. $ 125.4 $ 196.7
Impaired mortgage loans without provision for losses............... 8.6 3.6
------------------- -------------------
Recorded investment in impaired mortgage loans..................... 134.0 200.3
Provision for losses............................................... (29.0) (51.8)
------------------- -------------------
Net Impaired Mortgage Loans........................................ $ 105.0 $ 148.5
=================== ===================
</TABLE>
Impaired mortgage loans without provision for losses are loans where the
fair value of the collateral or the net present value of the expected
future cash flows related to the loan equals or exceeds the recorded
investment. Interest income earned on loans where the collateral value
is used to measure impairment is recorded on a cash basis. Interest
income on loans where the present value method is used to measure
impairment is accrued on the net carrying value amount of the loan at
the interest rate used to discount the cash flows. Changes in the
present value attributable to changes in the amount or timing of
expected cash flows are reported as investment gains or losses.
During 1998, 1997 and 1996, respectively, the Company's average recorded
investment in impaired mortgage loans was $161.3 million, $246.9 million
and $552.1 million. Interest income recognized on these impaired
mortgage loans totaled $12.3 million, $15.2 million and $38.8 million
($.9 million, $2.3 million and $17.9 million recognized on a cash basis)
for 1998, 1997 and 1996, respectively.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1998 and 1997, the carrying value of equity real estate
held for sale amounted to $836.2 million and $1,023.5 million,
respectively. For 1998, 1997 and 1996, respectively, real estate of $7.1
million, $152.0 million and $58.7 million was acquired in satisfaction
of debt. At December 31, 1998 and 1997, the Company owned $552.3 million
and $693.3 million, respectively, of real estate acquired in
satisfaction of debt.
Depreciation of real estate held for production of income is computed
using the straight-line method over the estimated useful lives of the
properties, which generally range from 40 to 50 years. Accumulated
depreciation on real estate was $374.8 million and $541.1 million at
December 31, 1998 and 1997, respectively. Depreciation expense on real
estate totaled $30.5 million, $74.9 million and $91.8 million for 1998,
1997 and 1996, respectively.
F-16
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information for real estate joint ventures
(25 and 29 individual ventures as of December 31, 1998 and 1997,
respectively) and for limited partnership interests accounted for under
the equity method, in which the Company has an investment of $10.0
million or greater and an equity interest of 10% or greater, is as
follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
BALANCE SHEETS
Investments in real estate, at depreciated cost........................ $ 913.7 $ 1,700.9
Investments in securities, generally at estimated fair value........... 636.9 1,374.8
Cash and cash equivalents.............................................. 85.9 105.4
Other assets........................................................... 279.8 584.9
---------------- -----------------
Total Assets........................................................... $ 1,916.3 $ 3,766.0
================ =================
Borrowed funds - third party........................................... $ 367.1 $ 493.4
Borrowed funds - the Company........................................... 30.1 31.2
Other liabilities...................................................... 197.2 284.0
---------------- -----------------
Total liabilities...................................................... 594.4 808.6
---------------- -----------------
Partners' capital...................................................... 1,321.9 2,957.4
---------------- -----------------
Total Liabilities and Partners' Capital................................ $ 1,916.3 $ 3,766.0
================ =================
Equity in partners' capital included above............................. $ 312.9 $ 568.5
Equity in limited partnership interests not included above............. 442.1 331.8
Other.................................................................. .7 4.3
---------------- -----------------
Carrying Value......................................................... $ 755.7 $ 904.6
================ =================
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 246.1 $ 310.5 $ 348.9
Revenues of other limited partnership interests.... 128.9 506.3 386.1
Interest expense - third party..................... (33.3) (91.8) (111.0)
Interest expense - the Company..................... (2.6) (7.2) (30.0)
Other expenses..................................... (197.0) (263.6) (282.5)
----------------- ---------------- -----------------
Net Earnings....................................... $ 142.1 $ 454.2 $ 311.5
================= ================ =================
Equity in net earnings included above.............. $ 59.6 $ 76.7 $ 73.9
Equity in net earnings of limited partnership
interests not included above..................... 22.7 69.5 35.8
Other.............................................. - (.9) .9
----------------- ---------------- -----------------
Total Equity in Net Earnings....................... $ 82.3 $ 145.3 $ 110.6
================= ================ =================
</TABLE>
F-17
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,489.0 $ 1,459.4 $ 1,307.4
Mortgage loans on real estate...................... 235.4 260.8 303.0
Equity real estate................................. 356.1 390.4 442.4
Other equity investments........................... 83.8 156.9 122.0
Policy loans....................................... 144.9 177.0 160.3
Other investment income............................ 185.7 181.7 217.4
----------------- ---------------- -----------------
Gross investment income.......................... 2,494.9 2,626.2 2,552.5
Investment expenses.............................. (266.8) (343.4) (348.9)
----------------- ---------------- -----------------
Net Investment Income.............................. $ 2,228.1 $ 2,282.8 $ 2,203.6
================= ================ =================
</TABLE>
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Fixed maturities................................... $ (24.3) $ 88.1 $ 60.5
Mortgage loans on real estate...................... (10.9) (11.2) (27.3)
Equity real estate................................. 74.5 (391.3) (79.7)
Other equity investments........................... 29.9 14.1 18.9
Sale of subsidiaries............................... (2.6) 252.1 -
Issuance and sales of Alliance Units............... 19.8 - 20.6
Issuance and sale of DLJ common stock.............. 18.2 3.0 -
Other.............................................. (4.4) - (2.8)
----------------- ---------------- -----------------
Investment Gains (Losses), Net..................... $ 100.2 $ (45.2) $ (9.8)
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $101.6 million, $11.7 million
and $29.9 million for 1998, 1997 and 1996, respectively, and writedowns
of equity real estate subsequent to the adoption of SFAS No. 121
amounted to $136.4 million for 1997. In the fourth quarter of 1997, the
Company reclassified $1,095.4 million depreciated cost of equity real
estate from real estate held for the production of income to real estate
held for sale. Additions to valuation allowances of $227.6 million were
recorded upon these transfers. Additionally, in fourth quarter 1997,
$132.3 million of writedowns on real estate held for production of
income were recorded.
For 1998, 1997 and 1996, respectively, proceeds received on sales of
fixed maturities classified as available for sale amounted to $15,961.0
million, $9,789.7 million and $8,353.5 million. Gross gains of $149.3
million, $166.0 million and $154.2 million and gross losses of $95.1
million, $108.8 million and $92.7 million, respectively, were realized
on these sales. The change in unrealized investment gains (losses)
related to fixed maturities classified as available for sale for 1998,
1997 and 1996 amounted to $(331.7) million, $513.4 million and $(258.0)
million, respectively.
For 1998, 1997 and 1996, investment results passed through to certain
participating group annuity contracts as interest credited to
policyholders' account balances amounted to $136.9 million, $137.5
million and $136.7 million, respectively.
F-18
<PAGE>
On June 10, 1997, Equitable Life sold EREIM (other than its interest in
Column Financial, Inc.) ("ERE") to Lend Lease Corporation Limited ("Lend
Lease"), a publicly traded, international property and financial
services company based in Sydney, Australia. The total purchase price
was $400.0 million and consisted of $300.0 million in cash and a $100.0
million note which was paid in 1998. The Company recognized an
investment gain of $162.4 million, net of Federal income tax of $87.4
million as a result of this transaction. Equitable Life entered into
long-term advisory agreements whereby ERE continues to provide
substantially the same services to Equitable Life's General Account and
Separate Accounts, for substantially the same fees, as provided prior to
the sale.
Through June 10, 1997 and for the year ended December 31, 1996,
respectively, the businesses sold reported combined revenues of $91.6
million and $226.1 million and combined net earnings of $10.7 million
and $30.7 million.
In 1996, Alliance acquired the business of Cursitor Holdings L.P. and
Cursitor Holdings Limited (collectively, "Cursitor") for approximately
$159.0 million. The purchase price consisted of $94.3 million in cash,
1.8 million of Alliance's publicly traded units ("Alliance Units"), 6%
notes aggregating $21.5 million payable ratably over four years, and
additional consideration to be determined at a later date but currently
estimated to not exceed $10.0 million. The excess of the purchase price,
including acquisition costs and minority interest, over the fair value
of Cursitor's net assets acquired resulted in the recognition of
intangible assets consisting of costs assigned to contracts acquired and
goodwill of approximately $122.8 million and $38.3 million,
respectively. The Company recognized an investment gain of $20.6 million
as a result of the issuance of Alliance Units in this transaction. On
June 30, 1997, Alliance reduced the recorded value of goodwill and
contracts associated with Alliance's acquisition of Cursitor by $120.9
million. This charge reflected Alliance's view that Cursitor's
continuing decline in assets under management and its reduced
profitability, resulting from relative investment underperformance, no
longer supported the carrying value of its investment. As a result, the
Company's earnings from continuing operations before cumulative effect
of accounting change for 1997 included a charge of $59.5 million, net of
a Federal income tax benefit of $10.0 million and minority interest of
$51.4 million. The remaining balance of intangible assets is being
amortized over its estimated useful life of 20 years. At December 31,
1998, the Company's ownership of Alliance Units was approximately 56.7%.
F-19
<PAGE>
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of accumulated comprehensive income and
the changes for the corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Balance, beginning of year......................... $ 533.6 $ 189.9 $ 396.5
Changes in unrealized investment gains (losses).... (242.4) 543.3 (297.6)
Changes in unrealized investment losses
(gains) attributable to:
Participating group annuity contracts.......... (5.7) 53.2 -
DAC............................................ 13.2 (89.0) 42.3
Deferred Federal income taxes.................. 85.4 (163.8) 48.7
----------------- ---------------- -----------------
Balance, End of Year............................... $ 384.1 $ 533.6 $ 189.9
================= ================ =================
Balance, end of year comprises:
Unrealized investment gains on:
Fixed maturities............................... $ 539.9 $ 871.2 $ 357.8
Other equity investments....................... 92.4 33.7 31.6
Other, principally Closed Block................ 111.1 80.9 53.1
----------------- ---------------- -----------------
Total........................................ 743.4 985.8 442.5
Amounts of unrealized investment gains
attributable to:
Participating group annuity contracts........ (24.7) (19.0) (72.2)
DAC.......................................... (127.8) (141.0) (52.0)
Deferred Federal income taxes................ (206.8) (292.2) (128.4)
----------------- ---------------- -----------------
Total.............................................. $ 384.1 $ 533.6 $ 189.9
================= ================ =================
</TABLE>
6) ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income represents cumulative gains and
losses on items that are not reflected in earnings. The balances for the
years 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Unrealized gains on investments.................... $ 384.1 $ 533.6 $ 189.9
Minimum pension liability.......................... (28.3) (17.3) (12.9)
----------------- ---------------- -----------------
Total Accumulated Other
Comprehensive Income............................. $ 355.8 $ 516.3 $ 177.0
================= ================ =================
</TABLE>
F-20
<PAGE>
The components of other comprehensive income for the years 1998, 1997
and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Net unrealized gains (losses) on investment
securities:
Net unrealized gains (losses) arising during
the period..................................... $ (186.1) $ 564.0 $ (249.8)
Reclassification adjustment for (gains) losses
included in net earnings....................... (56.3) (20.7) (47.8)
----------------- ---------------- -----------------
Net unrealized gains (losses) on investment
securities....................................... (242.4) 543.3 (297.6)
Adjustments for policyholder liabilities,
DAC and deferred
Federal income taxes............................. 92.9 (199.6) 91.0
----------------- ---------------- -----------------
Change in unrealized gains (losses), net of
reclassification and adjustments................. (149.5) 343.7 (206.6)
Change in minimum pension liability................ (11.0) (4.4) 22.2
----------------- ---------------- -----------------
Total Other Comprehensive Income................... $ (160.5) $ 339.3 $ (184.4)
================= ================ =================
</TABLE>
7) CLOSED BLOCK
Summarized financial information for the Closed Block follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$4,149.0 and $4,059.4)........................................... $ 4,373.2 $ 4,231.0
Mortgage loans on real estate........................................ 1,633.4 1,341.6
Policy loans......................................................... 1,641.2 1,700.2
Cash and other invested assets....................................... 86.5 282.0
DAC.................................................................. 676.5 775.2
Other assets......................................................... 221.6 236.6
----------------- -----------------
Total Assets......................................................... $ 8,632.4 $ 8,566.6
================= =================
Liabilities
Future policy benefits and policyholders' account balances........... $ 9,013.1 $ 8,993.2
Other liabilities.................................................... 63.9 80.5
----------------- -----------------
Total Liabilities.................................................... $ 9,077.0 $ 9,073.7
================= =================
</TABLE>
F-21
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Revenues
Premiums and other revenue......................... $ 661.7 $ 687.1 $ 724.8
Investment income (net of investment
expenses of $15.5, $27.0 and $27.3).............. 569.7 574.9 546.6
Investment losses, net............................. .5 (42.4) (5.5)
----------------- ---------------- -----------------
Total revenues............................... 1,231.9 1,219.6 1,265.9
----------------- ---------------- -----------------
Benefits and Other Deductions
Policyholders' benefits and dividends.............. 1,082.0 1,066.7 1,106.3
Other operating costs and expenses................. 62.8 50.4 34.6
----------------- ---------------- -----------------
Total benefits and other deductions.......... 1,144.8 1,117.1 1,140.9
----------------- ---------------- -----------------
Contribution from the Closed Block................. $ 87.1 $ 102.5 $ 125.0
================= ================ =================
</TABLE>
At December 31, 1998 and 1997, problem mortgage loans on real estate had
an amortized cost of $5.1 million and $8.1 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had an amortized cost of $26.0 million and $70.5 million,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 55.5 $ 109.1
Impaired mortgage loans without provision for losses................... 7.6 .6
---------------- -----------------
Recorded investment in impaired mortgages.............................. 63.1 109.7
Provision for losses................................................... (10.1) (17.4)
---------------- -----------------
Net Impaired Mortgage Loans............................................ $ 53.0 $ 92.3
================ =================
</TABLE>
During 1998, 1997 and 1996, the Closed Block's average recorded
investment in impaired mortgage loans was $85.5 million, $110.2 million
and $153.8 million, respectively. Interest income recognized on these
impaired mortgage loans totaled $4.7 million, $9.4 million and $10.9
million ($1.5 million, $4.1 million and $4.7 million recognized on a
cash basis) for 1998, 1997 and 1996, respectively.
Valuation allowances amounted to $11.1 million and $18.5 million on
mortgage loans on real estate and $15.4 million and $16.8 million on
equity real estate at December 31, 1998 and 1997, respectively. As of
January 1, 1996, the adoption of SFAS No. 121 resulted in the
recognition of impairment losses of $5.6 million on real estate held for
production of income. Writedowns of fixed maturities amounted to $3.5
million and $12.8 million for 1997 and 1996, respectively. Writedowns of
equity real estate subsequent to the adoption of SFAS No. 121 amounted
to $28.8 million for 1997.
In the fourth quarter of 1997, $72.9 million depreciated cost of equity
real estate held for production of income was reclassified to equity
real estate held for sale. Additions to valuation allowances of $15.4
million were recorded upon these transfers. Additionally, in fourth
quarter 1997, $28.8 million of writedowns on real estate held for
production of income were recorded.
Many expenses related to Closed Block operations are charged to
operations outside of the Closed Block; accordingly, the contribution
from the Closed Block does not represent the actual profitability of the
Closed Block operations. Operating costs and expenses outside of the
Closed Block are, therefore, disproportionate to the business outside of
the Closed Block.
F-22
<PAGE>
8) DISCONTINUED OPERATIONS
Summarized financial information for discontinued operations follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Assets
Mortgage loans on real estate........................................ $ 553.9 $ 635.2
Equity real estate................................................... 611.0 874.5
Other equity investments............................................. 115.1 209.3
Other invested assets................................................ 24.9 152.4
----------------- -----------------
Total investments.................................................. 1,304.9 1,871.4
Cash and cash equivalents............................................ 34.7 106.8
Other assets......................................................... 219.0 243.8
----------------- -----------------
Total Assets......................................................... $ 1,558.6 $ 2,222.0
================= =================
Liabilities
Policyholders' liabilities........................................... $ 1,021.7 $ 1,048.3
Allowance for future losses.......................................... 305.1 259.2
Amounts due to continuing operations................................. 2.7 572.8
Other liabilities.................................................... 229.1 341.7
----------------- -----------------
Total Liabilities.................................................... $ 1,558.6 $ 2,222.0
================= =================
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Revenues
Investment income (net of investment
expenses of $63.3, $97.3 and $127.5)............. $ 160.4 $ 188.6 $ 245.4
Investment gains (losses), net..................... 35.7 (173.7) (18.9)
Policy fees, premiums and other income............. (4.3) .2 .2
----------------- ---------------- -----------------
Total revenues..................................... 191.8 15.1 226.7
Benefits and other deductions...................... 141.5 169.5 250.4
Earnings added (losses charged) to allowance
for future losses................................ 50.3 (154.4) (23.7)
----------------- ---------------- -----------------
Pre-tax loss from operations....................... - - -
Pre-tax earnings from releasing (loss from
strengthening) of the allowance for future
losses........................................... 4.2 (134.1) (129.0)
Federal income tax (expense) benefit............... (1.5) 46.9 45.2
----------------- ---------------- -----------------
Earnings (Loss) from Discontinued Operations....... $ 2.7 $ (87.2) $ (83.8)
================= ================ =================
</TABLE>
The Company's quarterly process for evaluating the allowance for future
losses applies the current period's results of the discontinued
operations against the allowance, re-estimates future losses and adjusts
the allowance, if appropriate. Additionally, as part of the Company's
annual planning process which takes place in the fourth quarter of each
year, investment and benefit cash flow projections are prepared. These
updated assumptions and estimates resulted in a release of allowance in
1998 and strengthening of allowance in 1997 and 1996.
F-23
<PAGE>
In the fourth quarter of 1997, $329.9 million depreciated cost of equity
real estate was reclassified from equity real estate held for production
of income to real estate held for sale. Additions to valuation
allowances of $79.8 million were recognized upon these transfers.
Additionally, in fourth quarter 1997, $92.5 million of writedowns on
real estate held for production of income were recognized.
Benefits and other deductions includes $26.6 million, $53.3 million and
$114.3 million of interest expense related to amounts borrowed from
continuing operations in 1998, 1997 and 1996, respectively.
Valuation allowances amounted to $3.0 million and $28.4 million on
mortgage loans on real estate and $34.8 million and $88.4 million on
equity real estate at December 31, 1998 and 1997, respectively. As of
January 1, 1996, the adoption of SFAS No. 121 resulted in a release of
existing valuation allowances of $71.9 million on equity real estate and
recognition of impairment losses of $69.8 million on real estate held
for production of income. Writedowns of equity real estate subsequent to
the adoption of SFAS No. 121 amounted to $95.7 million and $12.3 million
for 1997 and 1996, respectively.
At December 31, 1998 and 1997, problem mortgage loans on real estate had
amortized costs of $1.1 million and $11.0 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had amortized costs of $3.5 million and $109.4 million,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 6.7 $ 101.8
Impaired mortgage loans without provision for losses................... 8.5 .2
---------------- -----------------
Recorded investment in impaired mortgages.............................. 15.2 102.0
Provision for losses................................................... (2.1) (27.3)
---------------- -----------------
Net Impaired Mortgage Loans............................................ $ 13.1 $ 74.7
================ =================
</TABLE>
During 1998, 1997 and 1996, the discontinued operations' average
recorded investment in impaired mortgage loans was $73.3 million, $89.2
million and $134.8 million, respectively. Interest income recognized on
these impaired mortgage loans totaled $4.7 million, $6.6 million and
$10.1 million ($3.4 million, $5.3 million and $7.5 million recognized on
a cash basis) for 1998, 1997 and 1996, respectively.
At December 31, 1998 and 1997, discontinued operations had carrying
values of $50.0 million and $156.2 million, respectively, of real estate
acquired in satisfaction of debt.
F-24
<PAGE>
9) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Short-term debt...................................................... $ 179.3 $ 422.2
----------------- -----------------
Long-term debt:
Equitable Life:
6.95% surplus notes scheduled to mature 2005....................... 399.4 399.4
7.70% surplus notes scheduled to mature 2015....................... 199.7 199.7
Other.............................................................. .3 .3
----------------- -----------------
Total Equitable Life........................................... 599.4 599.4
----------------- -----------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 5.91% - 12.00%, due through 2017................... 392.2 676.6
----------------- -----------------
Alliance:
Other.............................................................. 10.8 18.5
----------------- -----------------
Total long-term debt................................................. 1,002.4 1,294.5
----------------- -----------------
Total Short-term and Long-term Debt.................................. $ 1,181.7 $ 1,716.7
================= =================
</TABLE>
Short-term Debt
Equitable Life has a $350.0 million bank credit facility available to
fund short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of
borrowing options with varying interest rates and expires in September
2000. The interest rates are based on external indices dependent on the
type of borrowing and at December 31, 1998 range from 5.23% to 7.75%.
There were no borrowings outstanding under this bank credit facility at
December 31, 1998.
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate purposes
used to support Equitable Life's liquidity needs and is supported by
Equitable Life's existing $350.0 million bank credit facility. At
December 31, 1998, there were no borrowings outstanding under this
program.
During July 1998, Alliance entered into a $425.0 million five-year
revolving credit facility with a group of commercial banks which
replaced a $250.0 million revolving credit facility. Under the facility,
the interest rate, at the option of Alliance, is a floating rate
generally based upon a defined prime rate, a rate related to the London
Interbank Offered Rate ("LIBOR") or the Federal Funds Rate. A facility
fee is payable on the total facility. During September 1998, Alliance
increased the size of its commercial paper program from $250.0 million
to $425.0 million. Borrowings from these two sources may not exceed
$425.0 million in the aggregate. The revolving credit facility provides
backup liquidity for commercial paper issued under Alliance's commercial
paper program and can be used as a direct source of borrowing. The
revolving credit facility contains covenants which require Alliance to,
among other things, meet certain financial ratios. As of December 31,
1998, Alliance had commercial paper outstanding totaling $179.5 million
at an effective interest rate of 5.5% and there were no borrowings
outstanding under Alliance's revolving credit facility.
Long-term Debt
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other
matters. The Company is in compliance with all debt covenants.
F-25
<PAGE>
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $640.2 million and $1,164.0 million at December 31, 1998
and 1997, respectively, as collateral for certain short-term and
long-term debt.
At December 31, 1998, aggregate maturities of the long-term debt based
on required principal payments at maturity for 1999 and the succeeding
four years are $322.8 million, $6.9 million, $1.7 million, $1.8 million
and $2.0 million, respectively, and $668.0 million thereafter.
10) FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated
statements of earnings is shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ 283.3 $ 186.5 $ 97.9
Deferred......................................... 69.8 (95.0) (88.2)
----------------- ---------------- -----------------
Total.............................................. $ 353.1 $ 91.5 $ 9.7
================= ================ =================
</TABLE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and minority interest by the expected Federal
income tax rate of 35%. The sources of the difference and the tax
effects of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 414.3 $ 234.7 $ 73.0
Non-taxable minority interest...................... (33.2) (38.0) (28.6)
Adjustment of tax audit reserves................... 16.0 (81.7) 6.9
Equity in unconsolidated subsidiaries.............. (39.3) (45.1) (32.3)
Other.............................................. (4.7) 21.6 (9.3)
----------------- ---------------- -----------------
Federal Income Tax Expense......................... $ 353.1 $ 91.5 $ 9.7
================= ================ =================
</TABLE>
The components of the net deferred Federal income taxes are as follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
--------------------------------- ---------------------------------
Assets Liabilities Assets Liabilities
--------------- ---------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C> <C>
Compensation and related benefits...... $ 235.3 $ - $ 257.9 $ -
Other.................................. 27.8 - 30.7 -
DAC, reserves and reinsurance.......... - 231.4 - 222.8
Investments............................ - 364.4 - 405.7
--------------- ---------------- --------------- ---------------
Total.................................. $ 263.1 $ 595.8 $ 288.6 $ 628.5
=============== ================ =============== ===============
</TABLE>
F-26
<PAGE>
The deferred Federal income taxes impacting operations reflect the net
tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The sources of these temporary differences
and the tax effects of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
DAC, reserves and reinsurance...................... $ (7.7) $ 46.2 $ (156.2)
Investments........................................ 46.8 (113.8) 78.6
Compensation and related benefits.................. 28.6 3.7 22.3
Other.............................................. 2.1 (31.1) (32.9)
----------------- ---------------- -----------------
Deferred Federal Income Tax
Expense (Benefit)................................ $ 69.8 $ (95.0) $ (88.2)
================= ================ =================
</TABLE>
The Internal Revenue Service (the "IRS") is in the process of examining
the Holding Company's consolidated Federal income tax returns for the
years 1992 through 1996. Management believes these audits will have no
material adverse effect on the Company's results of operations.
11) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. Ceded reinsurance does not relieve the originating insurer
of liability. The effect of reinsurance (excluding group life and
health) is summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Direct premiums.................................... $ 438.8 $ 448.6 $ 461.4
Reinsurance assumed................................ 203.6 198.3 177.5
Reinsurance ceded.................................. (54.3) (45.4) (41.3)
----------------- ---------------- -----------------
Premiums........................................... $ 588.1 $ 601.5 $ 597.6
================= ================ =================
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 75.7 $ 61.0 $ 48.2
================= ================ =================
Policyholders' Benefits Ceded...................... $ 85.9 $ 70.6 $ 54.1
================= ================ =================
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 39.5 $ 36.4 $ 32.3
================= ================ =================
</TABLE>
Beginning in May 1997, the Company began reinsuring on a yearly renewal
term basis 90% of the mortality risk on new issues of certain term,
universal and variable life products. During 1996, the Company's
retention limit on joint survivorship policies was increased to $15.0
million. Effective January 1, 1994, all in force business above $5.0
million was reinsured. The Insurance Group also reinsures the entire
risk on certain substandard underwriting risks as well as in certain
other cases.
The Insurance Group cedes 100% of its group life and health business to
a third party insurance company. Premiums ceded totaled $1.3 million,
$1.6 million and $2.4 million for 1998, 1997 and 1996, respectively.
Ceded death and disability benefits totaled $15.6 million, $4.3 million
and $21.2 million for 1998, 1997 and 1996, respectively. Insurance
liabilities ceded totaled $560.3 million and $593.8 million at December
31, 1998 and 1997, respectively.
F-27
<PAGE>
12) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified
part-time employees), managers and certain agents. The pension plans are
non-contributory. Equitable Life's benefits are based on a cash balance
formula or years of service and final average earnings, if greater,
under certain grandfathering rules in the plans. Alliance's benefits are
based on years of credited service, average final base salary and
primary social security benefits. The Company's funding policy is to
make the minimum contribution required by the Employee Retirement Income
Security Act of 1974 ("ERISA").
Components of net periodic pension cost (credit) for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Service cost....................................... $ 33.2 $ 32.5 $ 33.8
Interest cost on projected benefit obligations..... 129.2 128.2 120.8
Actual return on assets............................ (175.6) (307.6) (181.4)
Net amortization and deferrals..................... 6.1 166.6 43.4
----------------- ---------------- -----------------
Net Periodic Pension Cost (Credit)................. $ (7.1) $ 19.7 $ 16.6
================= ================ =================
</TABLE>
The plan's projected benefit obligation under the qualified and
non-qualified plans was comprised of:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Benefit obligation, beginning of year.................................. $ 1,801.3 $ 1,765.5
Service cost........................................................... 33.2 32.5
Interest cost.......................................................... 129.2 128.2
Actuarial (gains) losses............................................... 108.4 (15.5)
Benefits paid.......................................................... (138.7) (109.4)
---------------- -----------------
Benefit Obligation, End of Year........................................ $ 1,933.4 $ 1,801.3
================ =================
</TABLE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Plan assets at fair value, beginning of year........................... $ 1,867.4 $ 1,626.0
Actual return on plan assets........................................... 338.9 307.5
Contributions.......................................................... - 30.0
Benefits paid and fees................................................. (123.2) (96.1)
---------------- -----------------
Plan assets at fair value, end of year................................. 2,083.1 1,867.4
Projected benefit obligations.......................................... 1,933.4 1,801.3
---------------- -----------------
Projected benefit obligations less than plan assets.................... 149.7 66.1
Unrecognized prior service cost........................................ (7.5) (9.9)
Unrecognized net loss from past experience different
from that assumed.................................................... 38.7 95.0
Unrecognized net asset at transition................................... 1.5 3.1
---------------- -----------------
Prepaid Pension Cost.................................................. $ 182.4 $ 154.3
================ =================
</TABLE>
The discount rate and rate of increase in future compensation levels
used in determining the actuarial present value of projected benefit
obligations were 7.0% and 3.83%, respectively, at December 31, 1998 and
7.25% and 4.07%, respectively, at December 31, 1997. As of January 1,
1998 and 1997, the expected long-term rate of return on assets for the
retirement plan was 10.25%.
F-28
<PAGE>
The Company recorded, as a reduction of shareholders' equity an
additional minimum pension liability of $28.3 million and $17.3 million,
net of Federal income taxes, at December 31, 1998 and 1997,
respectively, primarily representing the excess of the accumulated
benefit obligation of the qualified pension plan over the accrued
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of group
trusts managed by Alliance.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $31.8 million,
$33.2 million and $34.7 million for 1998, 1997 and 1996, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company (i) on or after attaining
age 55 who have at least 10 years of service or (ii) on or after
attaining age 65 or (iii) whose jobs have been abolished and who have
attained age 50 with 20 years of service. The life insurance benefits
are related to age and salary at retirement. The costs of postretirement
benefits are recognized in accordance with the provisions of SFAS No.
106. The Company continues to fund postretirement benefits costs on a
pay-as-you-go basis and, for 1998, 1997 and 1996, the Company made
estimated postretirement benefits payments of $28.4 million, $18.7
million and $18.9 million, respectively.
The following table sets forth the postretirement benefits plan's
status, reconciled to amounts recognized in the Company's consolidated
financial statements:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Service cost....................................... $ 4.6 $ 4.5 $ 5.3
Interest cost on accumulated postretirement
benefits obligation.............................. 33.6 34.7 34.6
Net amortization and deferrals..................... .5 1.9 2.4
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 38.7 $ 41.1 $ 42.3
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Accumulated postretirement benefits obligation, beginning
of year.............................................................. $ 490.8 $ 388.5
Service cost........................................................... 4.6 4.5
Interest cost.......................................................... 33.6 34.7
Contributions and benefits paid........................................ (28.4) 72.1
Actuarial (gains) losses............................................... (10.2) (9.0)
---------------- -----------------
Accumulated postretirement benefits obligation, end of year............ 490.4 490.8
Unrecognized prior service cost........................................ 31.8 40.3
Unrecognized net loss from past experience different
from that assumed and from changes in assumptions.................... (121.2) (140.6)
---------------- -----------------
Accrued Postretirement Benefits Cost................................... $ 401.0 $ 390.5
================ =================
</TABLE>
Since January 1, 1994, costs to the Company for providing these medical
benefits available to retirees under age 65 are the same as those
offered to active employees and medical benefits will be limited to 200%
of 1993 costs for all participants.
F-29
<PAGE>
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefits obligation was 8.0% in 1998,
gradually declining to 2.5% in the year 2009, and in 1997 was 8.75%,
gradually declining to 2.75% in the year 2009. The discount rate used in
determining the accumulated postretirement benefits obligation was 7.0%
and 7.25% at December 31, 1998 and 1997, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1998
would be increased 4.83%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 4.57%. If the
health care cost trend rate assumptions were decreased by 1% the
accumulated postretirement benefits obligation as of December 31, 1998
would be decreased by 5.6%. The effect of this change on the sum of the
service cost and interest cost would be a decrease of 5.4%.
13) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap
transactions are amortized as yield adjustments over the remaining life
of the underlying hedged security. Income and expense resulting from
interest rate swap activities are reflected in net investment income.
The notional amount of matched interest rate swaps outstanding at
December 31, 1998 and 1997, respectively, was $880.9 million and
$1,353.4 million. The average unexpired terms at December 31, 1998
ranged from 1 month to 4.3 years. At December 31, 1998, the cost of
terminating swaps in a loss position was $8.0 million. Equitable Life
has implemented an interest rate cap program designed to hedge crediting
rates on interest-sensitive individual annuities contracts. The
outstanding notional amounts at December 31, 1998 of contracts purchased
and sold were $8,450.0 million and $875.0 million, respectively. The net
premium paid by Equitable Life on these contracts was $54.8 million and
is being amortized ratably over the contract periods ranging from 1 to 5
years. Income and expense resulting from this program are reflected as
an adjustment to interest credited to policyholders' account balances.
Substantially all of DLJ's activities related to derivatives are, by
their nature trading activities which are primarily for the purpose of
customer accommodations. DLJ enters into certain contractual agreements
referred to as derivatives or off-balance-sheet financial instruments
involving futures, forwards and options. DLJ's derivative activities
consist of writing over-the-counter ("OTC") options to accommodate its
customer needs, trading in forward contracts in U.S. government and
agency issued or guaranteed securities and in futures contracts on
equity-based indices, interest rate instruments and currencies and
issuing structured products based on emerging market financial
instruments and indices. DLJ's involvement in swap contracts and
commodity derivative instruments is not significant.
Fair Value of Financial Instruments
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases
where quoted market prices are not available, fair values are estimated
using present value or other valuation techniques. The fair value
estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument,
including estimates of the timing and amount of expected future cash
flows and the credit standing of counterparties. Such estimates do not
reflect any premium or discount that could result from offering for sale
at one time the Company's entire holdings of a particular financial
instrument, nor do they consider the tax impact of the realization of
unrealized gains or losses. In many cases, the fair value estimates
cannot be substantiated by comparison to independent markets, nor can
the disclosed value be realized in immediate settlement of the
instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts.
Fair market value of off-balance-sheet financial instruments of the
Insurance Group was not material at December 31, 1998 and 1997.
F-30
<PAGE>
Fair values for mortgage loans on real estate are estimated by
discounting future contractual cash flows using interest rates at which
loans with similar characteristics and credit quality would be made.
Fair values for foreclosed mortgage loans and problem mortgage loans are
limited to the estimated fair value of the underlying collateral if
lower.
Fair values of policy loans are estimated by discounting the face value
of the loans from the time of the next interest rate review to the
present, at a rate equal to the excess of the current estimated market
rates over the current interest rate charged on the loan.
The estimated fair values for the Company's association plan contracts,
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain, which are included in policyholders' account
balances, and guaranteed interest contracts are estimated using
projected cash flows discounted at rates reflecting expected current
offering rates.
The estimated fair values for variable deferred annuities and single
premium deferred annuities ("SPDA"), which are included in
policyholders' account balances, are estimated by discounting the
account value back from the time of the next crediting rate review to
the present, at a rate equal to the excess of current estimated market
rates offered on new policies over the current crediting rates.
Fair values for long-term debt are determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt
are determined by discounting contractual cash flows at a rate which
takes into account the level of current market interest rates and
collateral risk. The estimated fair values for recourse mortgage debt
are determined by discounting contractual cash flows at a rate based
upon current interest rates of other companies with credit ratings
similar to the Company. The Company's carrying value of short-term
borrowings approximates their estimated fair value.
The following table discloses carrying value and estimated fair value
for financial instruments not otherwise disclosed in Notes 3, 7 and 8:
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------------
1998 1997
--------------------------------- ---------------------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
--------------- ---------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
Mortgage loans on real estate.......... $ 2,809.9 $ 2,961.8 $ 2,611.4 $ 2,822.8
Other limited partnership interests.... 562.6 562.6 509.4 509.4
Policy loans........................... 2,086.7 2,370.7 2,422.9 2,493.9
Policyholders' account balances -
investment contracts................. 12,892.0 13,396.0 12,611.0 12,714.0
Long-term debt......................... 1,002.4 1,025.2 1,294.5 1,257.0
Closed Block Financial Instruments:
Mortgage loans on real estate.......... 1,633.4 1,703.5 1,341.6 1,420.7
Other equity investments............... 56.4 56.4 86.3 86.3
Policy loans........................... 1,641.2 1,929.7 1,700.2 1,784.2
SCNILC liability....................... 25.0 25.0 27.6 30.3
Discontinued Operations Financial
Instruments:
Mortgage loans on real estate.......... 553.9 599.9 655.5 779.9
Fixed maturities....................... 24.9 24.9 38.7 38.7
Other equity investments............... 115.1 115.1 209.3 209.3
Guaranteed interest contracts.......... 37.0 34.0 37.0 34.0
Long-term debt......................... 147.1 139.8 296.4 297.6
</TABLE>
F-31
<PAGE>
14) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements
include commitments by the Company, under certain conditions: to make
capital contributions of up to $142.9 million to affiliated real estate
joint ventures; and to provide equity financing to certain limited
partnerships of $287.3 million at December 31, 1998, under existing loan
or loan commitment agreements.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance
companies and beneficiaries. To satisfy its obligations under these
agreements, Equitable Life owns single premium annuities issued by
previously wholly owned life insurance subsidiaries. Equitable Life has
directed payment under these annuities to be made directly to the
beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the previously
wholly owned subsidiaries be unable to meet their obligations.
Management believes the satisfaction of those obligations by Equitable
Life is remote.
The Insurance Group had $24.7 million of letters of credit outstanding
at December 31, 1998.
15) LITIGATION
Major Medical Insurance Cases
Equitable Life agreed to settle, subject to court approval, previously
disclosed cases involving lifetime guaranteed renewable major medical
insurance policies issued by Equitable Life in five states. Plaintiffs
in these cases claimed that Equitable Life's method for determining
premium increases breached the terms of certain forms of the policies
and was misrepresented. In certain cases plaintiffs also claimed that
Equitable Life misrepresented to policyholders that premium increases
had been approved by insurance departments, and that it determined
annual rate increases in a manner that discriminated against the
policyholders.
In December 1997, Equitable Life entered into a settlement agreement,
subject to court approval, which would result in creation of a
nationwide class consisting of all persons holding, and paying premiums
on, the policies at any time since January 1, 1988 and the dismissal
with prejudice of the pending actions and the resolution of all similar
claims on a nationwide basis. Under the terms of the settlement, which
involves approximately 127,000 former and current policyholders,
Equitable Life would pay $14.2 million in exchange for release of all
claims and will provide future relief to certain current policyholders
by restricting future premium increases, estimated to have a present
value of $23.3 million. This estimate is based upon assumptions about
future events that cannot be predicted with certainty and accordingly
the actual value of the future relief may vary. In October 1998, the
court entered a judgment approving the settlement agreement and, in
November, a member of the national class filed a notice of appeal of the
judgment. In January 1999, the Court of Appeals granted Equitable Life's
motion to dismiss the appeal.
Life Insurance and Annuity Sales Cases
A number of lawsuits are pending as individual claims and purported
class actions against Equitable Life and its subsidiary insurance
companies Equitable Variable Life Insurance Company ("EVLICO," which was
merged into Equitable Life effective January 1, 1997) and The Equitable
of Colorado, Inc. ("EOC"). These actions involve, among other things,
sales of life and annuity products for varying periods from 1980 to the
present, and allege, among other things, sales practice
misrepresentation primarily involving: the number of premium payments
required; the propriety of a product as an investment vehicle; the
propriety of a product as a replacement of an existing policy; and
failure to disclose a product as life insurance. Some actions are in
state courts and others are in U.S. District Courts in varying
jurisdictions, and are in varying stages of discovery and motions for
class certification.
F-32
<PAGE>
In general, the plaintiffs request an unspecified amount of damages,
punitive damages, enjoinment from the described practices, prohibition
against cancellation of policies for non-payment of premium or other
remedies, as well as attorneys' fees and expenses. Similar actions have
been filed against other life and health insurers and have resulted in
the award of substantial judgments, including material amounts of
punitive damages, or in substantial settlements. Although the outcome of
litigation cannot be predicted with certainty, particularly in the early
stages of an action, The Equitable's management believes that the
ultimate resolution of these cases should not have a material adverse
effect on the financial position of The Equitable. The Equitable's
management cannot make an estimate of loss, if any, or predict whether
or not any such litigation will have a material adverse effect on The
Equitable's results of operations in any particular period.
Discrimination Case
Equitable Life is a defendant in an action, certified as a class action
in September 1997, in the United States District Court for the Northern
District of Alabama, Southern Division, involving alleged discrimination
on the basis of race against African-American applicants and potential
applicants in hiring individuals as sales agents. Plaintiffs seek a
declaratory judgment and affirmative and negative injunctive relief,
including the payment of back-pay, pension and other compensation.
Although the outcome of litigation cannot be predicted with certainty,
The Equitable's management believes that the ultimate resolution of this
matter should not have a material adverse effect on the financial
position of The Equitable. The Equitable's management cannot make an
estimate of loss, if any, or predict whether or not such matter will
have a material adverse effect on The Equitable's results of operations
in any particular period.
Alliance Capital
In July 1995, a class action complaint was filed against Alliance North
American Government Income Trust, Inc. (the "Fund"), Alliance and
certain other defendants affiliated with Alliance, including the Holding
Company, alleging violations of Federal securities laws, fraud and
breach of fiduciary duty in connection with the Fund's investments in
Mexican and Argentine securities. The original complaint was dismissed
in 1996; on appeal, the dismissal was affirmed. In October 1996,
plaintiffs filed a motion for leave to file an amended complaint,
alleging the Fund failed to hedge against currency risk despite
representations that it would do so, the Fund did not properly disclose
that it planned to invest in mortgage-backed derivative securities and
two Fund advertisements misrepresented the risks of investing in the
Fund. In October 1998, the U.S. Court of Appeals for the Second Circuit
issued an order granting plaintiffs' motion to file an amended complaint
alleging that the Fund misrepresented its ability to hedge against
currency risk and denying plaintiffs' motion to file an amended
complaint containing the other allegations. Alliance believes that the
allegations in the amended complaint, which was filed in February 1999,
are without merit and intends to defend itself vigorously against these
claims. While the ultimate outcome of this matter cannot be determined
at this time, Alliance's management does not expect that it will have a
material adverse effect on Alliance's results of operations or financial
condition.
DLJSC
DLJSC is a defendant along with certain other parties in a class action
complaint involving the underwriting of units, consisting of notes and
warrants to purchase common shares, of Rickel Home Centers, Inc.
("Rickel"), which filed a voluntary petition for reorganization pursuant
to Chapter 11 of the Bankruptcy Code. The complaint seeks unspecified
compensatory and punitive damages from DLJSC, as an underwriter and as
an owner of 7.3% of the common stock, for alleged violation of Federal
securities laws and common law fraud for alleged misstatements and
omissions contained in the prospectus and registration statement used in
the offering of the units. DLJSC is defending itself vigorously against
all the allegations contained in the complaint. Although there can be no
assurance, DLJ's management does not believe that the ultimate outcome
of this litigation will have a material adverse effect on DLJ's
consolidated financial condition. Due to the early stage of this
litigation, based on the information currently available to it, DLJ's
management cannot predict whether or not such litigation will have a
material adverse effect on DLJ's results of operations in any particular
period.
F-33
<PAGE>
DLJSC is a defendant in a purported class action filed in a Texas State
Court on behalf of the holders of $550 million principal amount of
subordinated redeemable discount debentures of National Gypsum
Corporation ("NGC"). The debentures were canceled in connection with a
Chapter 11 plan of reorganization for NGC consummated in July 1993. The
litigation seeks compensatory and punitive damages for DLJSC's
activities as financial advisor to NGC in the course of NGC's Chapter 11
proceedings. Trial is expected in early May 1999. DLJSC intends to
defend itself vigorously against all the allegations contained in the
complaint. Although there can be no assurance, DLJ's management does not
believe that the ultimate outcome of this litigation will have a
material adverse effect on DLJ's consolidated financial condition. Based
upon the information currently available to it, DLJ's management cannot
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
DLJSC is a defendant in a complaint which alleges that DLJSC and a
number of other financial institutions and several individual defendants
violated civil provisions of RICO by inducing plaintiffs to invest over
$40 million in The Securities Groups, a number of tax shelter limited
partnerships, during the years 1978 through 1982. The plaintiffs seek
recovery of the loss of their entire investment and an approximately
equivalent amount of tax-related damages. Judgment for damages under
RICO are subject to trebling. Discovery is complete. Trial has been
scheduled for May 17, 1999. DLJSC believes that it has meritorious
defenses to the complaints and will continue to contest the suits
vigorously. Although there can be no assurance, DLJ's management does
not believe that the ultimate outcome of this litigation will have a
material adverse effect on DLJ's consolidated financial condition. Based
upon the information currently available to it, DLJ's management cannot
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
DLJSC is a defendant along with certain other parties in four actions
involving Mid-American Waste Systems, Inc. ("Mid-American"), which filed
a voluntary petition for reorganization pursuant to Chapter 11 of the
Bankruptcy Code in January 1997. Three actions seek rescission,
compensatory and punitive damages for DLJSC's role in underwriting notes
of Mid-American. The other action, filed by the Plan Administrator for
the bankruptcy estate of Mid-American, alleges that DLJSC is liable as
an underwriter for alleged misrepresentations and omissions in the
prospectus for the notes, and liable as financial advisor to
Mid-American for allegedly failing to advise Mid-American about its
financial condition. DLJSC believes that it has meritorious defenses to
the complaints and will continue to contest the suits vigorously.
Although there can be no assurance, DLJ's management does not believe
that the ultimate outcome of this litigation will have a material
adverse effect on DLJ's consolidated financial condition. Based upon
information currently available to it, DLJ's management cannot predict
whether or not such litigation will have a material adverse effect on
DLJ's results of operations in any particular period.
Other Matters
In addition to the matters described above, the Holding Company and its
subsidiaries are involved in various legal actions and proceedings in
connection with their businesses. Some of the actions and proceedings
have been brought on behalf of various alleged classes of claimants and
certain of these claimants seek damages of unspecified amounts. While
the ultimate outcome of such matters cannot be predicted with certainty,
in the opinion of management no such matter is likely to have a material
adverse effect on the Company's consolidated financial position or
results of operations.
16) LEASES
The Company has entered into operating leases for office space and
certain other assets, principally data processing equipment and office
furniture and equipment. Future minimum payments under noncancelable
leases for 1999 and the succeeding four years are $98.7 million, $92.7
million, $73.4 million, $59.9 million, $55.8 million and $550.1 million
thereafter. Minimum future sublease rental income on these noncancelable
leases for 1999 and the succeeding four years is $7.6 million, $5.6
million, $4.6 million, $2.3 million, $2.3 million and $25.4 million
thereafter.
F-34
<PAGE>
At December 31, 1998, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1999
and the succeeding four years is $189.2 million, $177.0 million, $165.5
million, $145.4 million, $122.8 million and $644.7 million thereafter.
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Compensation costs................................. $ 772.0 $ 721.5 $ 704.8
Commissions........................................ 478.1 409.6 329.5
Short-term debt interest expense................... 26.1 31.7 8.0
Long-term debt interest expense.................... 84.6 121.2 137.3
Amortization of policy acquisition costs........... 292.7 287.3 405.2
Capitalization of policy acquisition costs......... (609.1) (508.0) (391.9)
Rent expense, net of sublease income............... 100.0 101.8 113.7
Cursitor intangible assets writedown............... - 120.9 -
Other.............................................. 1,056.8 917.9 769.1
----------------- ---------------- -----------------
Total.............................................. $ 2,201.2 $ 2,203.9 $ 2,075.7
================= ================ =================
</TABLE>
During 1997 and 1996, the Company restructured certain operations in
connection with cost reduction programs and recorded pre-tax provisions
of $42.4 million and $24.4 million, respectively. The amounts paid
during 1998, associated with cost reduction programs, totaled $22.6
million. At December 31, 1998, the liabilities associated with cost
reduction programs amounted to $39.4 million. The 1997 cost reduction
program included costs related to employee termination and exit costs.
The 1996 cost reduction program included restructuring costs related to
the consolidation of insurance operations' service centers. Amortization
of DAC in 1996 included a $145.0 million writeoff of DAC related to DI
contracts.
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends
to the Holding Company. Under the New York Insurance Law, the
Superintendent has broad discretion to determine whether the financial
condition of a stock life insurance company would support the payment of
dividends to its shareholders. For 1998, 1997 and 1996, statutory net
income (loss) totaled $384.4 million, $(351.7) million and $(351.1)
million, respectively. Statutory surplus, capital stock and Asset
Valuation Reserve ("AVR") totaled $4,728.0 million and $3,907.1 million
at December 31, 1998 and 1997, respectively. No dividends have been paid
by Equitable Life to the Holding Company to date.
At December 31, 1998, the Insurance Group, in accordance with various
government and state regulations, had $25.6 million of securities
deposited with such government or state agencies.
The differences between statutory surplus and capital stock determined
in accordance with Statutory Accounting Principles ("SAP") and total
shareholders' equity on a GAAP basis are primarily attributable to: (a)
inclusion in SAP of an AVR intended to stabilize surplus from
fluctuations in the value of the investment portfolio; (b) future policy
benefits and policyholders' account balances under SAP differ from GAAP
due to differences between actuarial assumptions and reserving
methodologies; (c) certain policy acquisition costs are expensed under
SAP but deferred under GAAP and amortized over future periods to achieve
a matching of revenues and expenses; (d) Federal income taxes are
generally accrued under SAP based upon revenues and expenses in the
Federal income tax return while under GAAP deferred taxes are provided
for timing differences between recognition of revenues and expenses for
financial reporting and income tax purposes; (e) valuation of assets
under SAP and GAAP differ due to different investment valuation and
depreciation methodologies, as well as the deferral of interest-related
realized capital gains and losses on fixed income investments; and (f)
differences in the accrual methodologies for post-employment and
retirement benefit plans.
F-35
<PAGE>
19) BUSINESS SEGMENT INFORMATION
The Company's operations consist of Insurance and Investment Services.
The Company's management evaluates the performance of each of these
segments independently and allocates resources based on current and
future requirements of each segment. Management evaluates the
performance of each segment based upon operating results adjusted to
exclude the effect of unusual or non-recurring events and transactions
and certain revenue and expense categories not related to the base
operations of the particular business net of minority interest.
Information for all periods is presented on a comparable basis.
Intersegment investment advisory and other fees of approximately $61.8
million, $84.1 million and $129.2 million for 1998, 1997 and 1996,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to discontinued
operations of $.5 million, $4.2 million and $13.3 million for 1998, 1997
and 1996, respectively, are eliminated in consolidation.
The following tables reconcile each segment's revenues and operating
earnings to total revenues and earnings from continuing operations
before Federal income taxes and cumulative effect of accounting change
as reported on the consolidated statements of earnings and the segments'
assets to total assets on the consolidated balance sheets, respectively.
<TABLE>
<CAPTION>
Investment
Insurance Services Elimination Total
--------------- ----------------- --------------- ----------------
(In Millions)
<S> <C> <C> <C> <C>
1998
Segment revenues..................... $ 4,029.8 $ 1,438.4 $ (5.7) $ 5,462.5
Investment gains..................... 64.8 35.4 - 100.2
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 4,094.6 $ 1,473.8 $ (5.7) $ 5,562.7
=============== ================= =============== ================
Pre-tax operating earnings........... $ 688.6 $ 284.3 $ - $ 972.9
Investment gains , net of
DAC and other charges.............. 41.7 27.7 - 69.4
Pre-tax minority interest............ - 141.5 - 141.5
--------------- ----------------- --------------- ----------------
Earnings from Continuing
Operations......................... $ 730.3 $ 453.5 $ - $ 1,183.8
=============== ================= =============== ================
Total Assets......................... $ 75,626.0 $ 12,379.2 $ (64.4) $ 87,940.8
=============== ================= =============== ================
1997
Segment revenues..................... $ 3,990.8 $ 1,200.0 $ (7.7) $ 5,183.1
Investment gains (losses)............ (318.8) 255.1 - (63.7)
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 3,672.0 $ 1,455.1 $ (7.7) $ 5,119.4
=============== ================= =============== ================
Pre-tax operating earnings........... $ 507.0 $ 258.3 $ - $ 765.3
Investment gains (losses), net of
DAC and other charges.............. (292.5) 252.7 - (39.8)
Non-recurring costs and expenses..... (41.7) (121.6) - (163.3)
Pre-tax minority interest............ - 108.5 - 108.5
--------------- ----------------- --------------- ----------------
Earnings from Continuing
Operations......................... $ 172.8 $ 497.9 $ - $ 670.7
=============== ================= =============== ================
Total Assets......................... $ 67,762.4 $ 13,691.4 $ (96.1) $ 81,357.7
=============== ================= =============== ================
</TABLE>
F-36
<PAGE>
<TABLE>
<CAPTION>
Investment
Insurance Services Elimination Total
--------------- ----------------- --------------- ----------------
(In Millions)
<S> <C> <C> <C> <C>
1996
Segment revenues..................... $ 3,789.1 $ 1,105.5 $ (12.6) $ 4,882.0
Investment gains (losses)............ (30.3) 20.5 - (9.8)
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 3,758.8 $ 1,126.0 $ (12.6) $ 4,872.2
=============== ================= =============== ================
Pre-tax operating earnings........... $ 337.1 $ 224.6 $ - $ 561.7
Investment gains (losses), net of
DAC and other charges.............. (37.2) 16.9 - (20.3)
Reserve strengthening and DAC
writeoff........................... (393.0) - - (393.0)
Non-recurring costs and
expenses........................... (22.3) (1.1) - (23.4)
Pre-tax minority interest............ - 83.6 - 83.6
--------------- ----------------- --------------- ----------------
Earnings (Loss) from
Continuing Operations.............. $ (115.4) $ 324.0 $ - $ 208.6
=============== ================= =============== ================
</TABLE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1998 and 1997 are summarized
below:
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------------
March 31 June 30 September 30 December 31
----------------- ----------------- ------------------ ------------------
(In Millions)
<S> <C> <C> <C> <C>
1998
Total Revenues................ $ 1,470.2 $ 1,422.9 $ 1,297.6 $ 1,372.0
================= ================= ================== ==================
Earnings from Continuing
Operations before
Cumulative Effect
of Accounting Change........ $ 212.8 $ 197.0 $ 136.8 $ 158.9
================= ================= ================== ==================
Net Earnings.................. $ 213.3 $ 198.3 $ 137.5 $ 159.1
================= ================= ================== ==================
1997
Total Revenues................ $ 1,266.0 $ 1,552.8 $ 1,279.0 $ 1,021.6
================= ================= ================== ==================
Earnings from Continuing
Operations before
Cumulative Effect
of Accounting Change........ $ 117.4 $ 222.5 $ 145.1 $ 39.4
================= ================= ================== ==================
Net Earnings (Loss)........... $ 114.1 $ 223.1 $ 144.9 $ (44.9)
================= ================= ================== ==================
</TABLE>
Net earnings for the three months ended December 31, 1997 includes a
charge of $212.0 million related to additions to valuation allowances on
and writeoffs of real estate of $225.2 million, and reserve
strengthening on discontinued operations of $84.3 million offset by a
reversal of prior years tax reserves of $97.5 million.
F-37
<PAGE>
21) INVESTMENT IN DLJ
At December 31, 1998, the Company's ownership of DLJ interest was
approximately 32.5%. The Company's ownership interest will be further
reduced upon the issuance of common stock after the vesting of
forfeitable restricted stock units acquired by and/or the exercise of
options granted to certain DLJ employees. DLJ restricted stock units
represents forfeitable rights to receive approximately 5.2 million
shares of DLJ common stock through February 2000.
The results of operations of DLJ are accounted for on the equity basis
and are included in commissions, fees and other income in the
consolidated statements of earnings. The Company's carrying value of DLJ
is included in investment in and loans to affiliates in the consolidated
balance sheets.
Summarized balance sheets information for DLJ, reconciled to the
Company's carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 13,195.1 $ 16,535.7
Securities purchased under resale agreements........................... 20,063.3 22,628.8
Broker-dealer related receivables...................................... 34,264.5 28,159.3
Other assets........................................................... 4,759.3 3,182.0
---------------- -----------------
Total Assets........................................................... $ 72,282.2 $ 70,505.8
================ =================
Liabilities:
Securities sold under repurchase agreements............................ $ 35,775.6 $ 36,006.7
Broker-dealer related payables......................................... 26,161.5 26,127.2
Short-term and long-term debt.......................................... 3,997.6 3,249.5
Other liabilities...................................................... 3,219.8 2,860.9
---------------- -----------------
Total liabilities...................................................... 69,154.5 68,244.3
DLJ's company-obligated mandatorily redeemed preferred
securities of subsidiary trust holding solely debentures of DLJ...... 200.0 200.0
Total shareholders' equity............................................. 2,927.7 2,061.5
---------------- -----------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 72,282.2 $ 70,505.8
================ =================
DLJ's equity as reported............................................... $ 2,927.7 $ 2,061.5
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 23.7 23.5
The Holding Company's equity ownership in DLJ.......................... (1,002.4) (740.2)
Minority interest in DLJ............................................... (1,118.2) (729.3)
---------------- -----------------
The Company's Carrying Value of DLJ.................................... $ 830.8 $ 615.5
================ =================
</TABLE>
F-38
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Commission, fees and other income...................................... $ 3,184.7 $ 2,430.7
Net investment income.................................................. 2,189.1 1,652.1
Dealer, trading and investment gains, net.............................. 33.2 557.7
---------------- -----------------
Total revenues......................................................... 5,407.0 4,640.5
Total expenses including income taxes.................................. 5,036.2 4,232.2
---------------- -----------------
Net earnings........................................................... 370.8 408.3
Dividends on preferred stock........................................... 21.3 12.2
---------------- -----------------
Earnings Applicable to Common Shares................................... $ 349.5 $ 396.1
================ =================
DLJ's earnings applicable to common shares as reported................. $ 349.5 $ 396.1
Amortization of cost in excess of net assets acquired in 1985.......... (.8) (1.3)
The Holding Company's equity in DLJ's earnings......................... (136.8) (156.8)
Minority interest in DLJ............................................... (99.5) (109.1)
---------------- -----------------
The Company's Equity in DLJ's Earnings................................. $ 112.4 $ 128.9
================ =================
</TABLE>
22) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock option plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option
plans for certain employees. The Company has elected to continue to
account for stock-based compensation using the intrinsic value method
prescribed in APB No. 25. Had compensation expense for the Holding
Company, DLJ and Alliance Stock Option Incentive Plan options been
determined based on SFAS No. 123's fair value based method, the
Company's pro forma net earnings for 1998, 1997 and 1996 would have
been:
<TABLE>
<CAPTION>
1998 1997 1996
--------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C>
Net Earnings:
As reported............................................. $ 708.2 $ 437.2 $ 10.3
Pro forma............................................... 678.4 426.3 3.3
</TABLE>
The fair values of options granted after December 31, 1994, used as a
basis for the above pro forma disclosures, were estimated as of the
dates of grant using the Black-Scholes option pricing model. The option
pricing assumptions for 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Holding Company DLJ Alliance
------------------------------ ------------------------------- ----------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
--------- ---------- --------- ---------- -------------------- ---------------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend yield...... 0.32% 0.48% 0.80% 0.69% 0.86% 1.54% 6.50% 8.00% 8.00%
Expected volatility. 28% 20% 20% 40% 33% 25% 29% 26% 23%
Risk-free interest
rate.............. 5.48% 5.99% 5.92% 5.53% 5.96% 6.07% 4.40% 5.70% 5.80%
Expected life
in years.......... 5 5 5 5 5 5 7.2 7.2 7.4
Weighted average
fair value per
option at
grant-date........ $22.64 $12.25 $6.94 $16.27 $10.81 $4.03 $3.86 $2.18 $1.35
</TABLE>
F-39
<PAGE>
A summary of the Holding Company, DLJ and Alliance's option plans is as
follows:
<TABLE>
<CAPTION>
Holding Company DLJ Alliance
----------------------------- ----------------------------- -----------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Price of Price of Price of
Shares Options Shares Options Units Options
(In Millions) Outstanding (In Millions) Outstanding (In Millions) Outstanding
--------------- ------------- --------------- ------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of
January 1, 1996........ 6.7 $20.27 18.4 $13.50 9.6 $ 8.86
Granted................ .7 $24.94 4.2 $16.27 1.4 $12.56
Exercised.............. (.1) $19.91 - (.8) $ 6.82
Expired................ - - -
Forfeited.............. (.6) $20.21 (.4) $13.50 (.2) $ 9.66
--------------- ------------- ---------------
Balance as of
December 31, 1996...... 6.7 $20.79 22.2 $14.03 10.0 $ 9.54
Granted................ 3.2 $41.85 6.4 $30.54 2.2 $18.28
Exercised.............. (1.6) $20.26 (.2) $16.01 (1.2) $ 8.06
Forfeited.............. (.4) $23.43 (.2) $13.79 (.4) $10.64
--------------- ------------- ---------------
Balance as of
December 31, 1997...... 7.9 $29.05 28.2 $17.78 10.6 $11.41
Granted................ 4.3 $66.26 1.5 $38.59 2.8 $26.28
Exercised.............. (1.1) $21.18 (1.4) $14.91 (.9) $ 8.91
Forfeited.............. (.4) $47.01 (.1) $17.31 (.2) $13.14
--------------- ------------- ---------------
Balance as of
December 31, 1998...... 10.7 $44.00 28.2 $19.04 12.3 $14.94
=============== ============= ===============
</TABLE>
F-40
<PAGE>
Information about options outstanding and exercisable at December 31,
1998 is as follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
---------------------------------------------------- -----------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices (In Millions) Life (Years) Price (In Millions) Price
--------------------------------------- ----------------- ---------------- ------------------- ---------------
Holding
Company
----------------------
<S> <C> <C> <C> <C> <C>
$18.125 -$27.75 3.7 5.19 $20.97 3.0 $20.33
$28.50 -$45.25 3.0 8.68 $41.79 -
$50.63 -$66.75 2.1 9.21 $52.73 -
$81.94 -$82.56 1.9 9.62 $82.56 -
----------------- -------------------
$18.125 -$82.56 10.7 7.75 $44.00 3.0 $20.33
================= ================= ================ ==================== ==============
DLJ
----------------------
$13.50 -$25.99 22.3 7.1 $14.59 21.4 $15.05
$26.00 -$38.99 5.0 8.8 $33.94 -
$39.00 -$52.875 .9 9.4 $44.65 -
----------------- -------------------
$13.50 -$52.875 28.2 7.5 $19.04 21.4 $15.05
================= ================== ============== ===================== =============
Alliance
----------------------
$ 3.03 -$ 9.69 3.1 4.5 $ 8.03 2.4 $ 7.57
$ 9.81 -$10.69 2.0 5.3 $10.05 1.6 $10.07
$11.13 -$13.75 2.4 7.5 $11.92 1.0 $11.77
$18.47 -$18.78 2.0 9.0 $18.48 .4 $18.48
$22.50 -$26.31 2.8 9.9 $26.28 - -
----------------- -------------------
$ 3.03 -$26.31 12.3 7.2 $14.94 5.4 $ 9.88
================= =================== ============= ===================== =============
</TABLE>
F-41
