<PAGE>
Registration No. 33-83750
Registration No. 811-8754
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 5 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 7 [X]
(Check appropriate box or boxes)
--------------------
SEPARATE ACCOUNT No. 45
of
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact Name of Registrant)
--------------------
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Name of Depositor)
787 Seventh Avenue, New York, New York 10019
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (212) 554-1234
--------------------
JONATHAN E. GAINES
VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas, New York, New York 10104
(Name and Address of Agent for Service)
--------------------
Please send copies of all communications to:
PETER E. PANARITES
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036
--------------------
<PAGE>
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective (check appropriate
box):
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485 .
[ ] On (date) pursuant to paragraph (b) of Rule 485.
[X] 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
[ ] On (date) pursuant to paragraph (a)(1) of Rule 485.
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
[ ] On (date) pursuant to paragraph (a)(3) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
previously filed post-effective amendment.
------------------------------------------------------
The Registrant has registered an indefinite number of securities under
the Securities Act of 1933 pursuant to Rule 24f-2.
The Rule 24f-2 Notice of the Registrant for fiscal year 1996 was filed on
February 28, 1997.
<PAGE>
NOTE
This Post-Effect Amendment No. 5 to the Form N-4 Registration Statement
No. 33-83750 ("Registration Statement") of The Equitable Life Assurance
Society of the United States ("Equitable Life") and its Separate Account No. 45
("Separate Account") is being filed for the purpose of including in the
Registration Statement two new prospectuses and statements of additional
information ("SAI") of Equitable Life and the Separate Account, and exhibits,
relating to Equitable Life's Rollover IRA and Accumulator fixed and variable
annuity products. The Registration Statement, which was declared effective on
October 17, 1996, contained Rollover IRA and Accumulator prospectuses and
SAIs, each dated October 17, 1996, for offerings of fixed and variable annuity
products currently in progress. For purposes of the continued effectiveness of
the aforesaid two October 17, 1996, prospectuses and SAIs, this Post-Effective
Amendment No. 5 shall not be deemed to amend such prospectuses and SAIs.
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUSES
FORM N-4 ITEM PROSPECTUS CAPTION
------------- ------------------
1. Cover Page Cover Page
2. Definitions General Terms
3. Synopsis (See Profile of
Prospectus)
4. Condensed Financial Not Applicable.
Information
5. General Description of Part 1: Equitable Life,
Registrant, Depositor and The Separate Account
Portfolio Companies and The Investment
Funds
6. Deductions and Expenses Part 4: Provisions of
the Certificates and
Services We Provide -
Distribution of the
Certificates, Part 5:
Deductions and Charges
7. General Description of Part 4: Provisions of
Variable Annuity Contracts the Certificates and
Services We Provide
8. Annuity Period Part 4: Provisions of
the Certificates and
Services We Provide
9. Death Benefit Part 4: Provisions of
the Certificates and
Services We Provide -
Death Benefit
10. Purchases and Contract Value Part 2: Investment
Performance, Part 4:
Provisions of the
Certificates and
Services We Provide
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUSES
FORM N-4 ITEM PROSPECTUS CAPTION
------------- ------------------
11. Redemptions Part 4: Provisions of
the Certificates and
Services We Provide -
Surrendering the
Certificates to
Receive the Cash
Value,- Income Annuity
Options, Part 5:
Deductions and Charges
12. Taxes Part 7: Tax Aspects
of the Certificates
13. Legal Proceedings Not Applicable
14. Table of Contents of the Statement of
Statement of Additional Additional
Information Information Table of
Contents
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION
IN STATEMENTS OF ADDITIONAL INFORMATION
STATEMENT OF ADDITIONAL
FORM N-4 ITEM INFORMATION CAPTION
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information Prospectus - Part 1:
and History Equitable Life, The
Separate Account and
The Investment Funds
18. Services Not Applicable
19. Purchases of Securities Prospectus - Part
Being Offered 4: Provisions of the
Certificates and
Services We Provide -
Distribution of the
Certificates
20. Underwriters Prospectus - Part 4:
Provisions of the
Certificates and
Services We Provide -
Distribution of the
Certificates
21. Calculation of Performance Accumulation
Data Unit Values, Annuity
Unit Values, Money
Market Fund Yield
Information,
Intermediate
Government Securities
Fund Yield Information
22. Annuity Payments Annuity Unit Values
23. Financial Statements Financial Statements
<PAGE>
May 1, 1997
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PROFILE OF THE INCOME MANAGER (SERVICE MARK)
ROLLOVER IRA AND CHOICE INCOME PLAN
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
This Profile is a summary of some of the more important points that you should
know and consider before purchasing a Certificate. The Certificate is more
fully described in the prospectus which accompanies this Profile. Please read
the prospectus carefully.
1. THE ANNUITY CERTIFICATE. The Rollover IRA Certificate is a qualified
deferred annuity issued by Equitable Life. It is designed to provide for
retirement income through the investment, during an accumulation phase, of
rollover contributions, direct transfers from other individual retirement
arrangements and additional individual retirement annuity, or IRA,
contributions. You may invest in Investment Funds where your Certificate's
value may vary up or down depending upon investment performance. You may also
invest in Guarantee Periods, or "GIRO's" that when held to maturity provide
guaranteed interest rates that we have set and a guarantee of principal. If
you make any transfers or withdrawals, the GIRO's investment value may
increase or decrease until maturity due to interest rate changes. Earnings
accumulate under your Certificate on a tax-deferred basis until amounts are
distributed. All amounts distributed are subject to income tax.
The Investment Funds offer a potential for better returns than those
guaranteed under GIRO's, but the Investment Funds involve risk and you can
lose money. You may make transfers among the Investment Funds and GIRO's, but
certain age restrictions apply to transfers to, from or among GIRO's.
The Certificate provides a number of distribution methods during the
accumulation phase and for converting to annuity income. You can elect at
issue of the Certificate for an additional charge, a guaranteed minimum income
benefit, or "GMIB," which guarantees a minimum amount of future lifetime
income regardless of investment performance when converting to the IRA ASSURED
PAYMENT OPTION at specified times. The IRA Assured Payment Option may also be
elected if you desire to start receiving lifetime income immediately. When you
elect the IRA Assured Payment Option, your Certificate's value will be reduced
for guarantee lifetime income.
You may also elect IRA APO PLUS whereby a portion of your money is invested
under the IRA Assured Payment Option, and the remaining amount is allocated to
the Investment Funds. Every three years during the fixed period of the IRA
Assured Payment Option, a portion of your money in the Investment Funds is
applied to increase the guaranteed payments under the IRA Assured Payment
Option.
1
<PAGE>
2. ANNUITY PAYMENTS. You can have your Certificate's value applied to any of
the following five INCOME ANNUITY OPTIONS: (1) Life Annuity - payments for
your life, (2) Life Annuity - Period Certain - payments for your life, but
with payments continuing to the beneficiary for the balance of the 5, 10, 15
or 20 years (as you select) if you die before the end of the selected period;
(3) Life Annuity - Refund Certain - payments for your life, with payments
continuing to the beneficiary after your death until any remaining amount
applied to this option runs out; and (4) Period Certain Annuity - payments for
a specified period of time, usually 5, 10, 15 or 20 years, with no life
contingencies. Options (2) and (3) are also available as a Joint and Survivor
Annuity - payments for your life, and after your death, continuation of
payments to the survivor for life. Income Annuity Options (other than the
Refund Certain only available on a fixed basis) are available as a fixed
annuity, or as a variable annuity, where the dollar amount of your payments
will depend upon the investment performance of the Investment Funds. Once you
begin receiving income annuity payments, you cannot change your annuity
option.
3. PURCHASE. You can purchase a Certificate by rolling over or transferring at
least $5,000 or more from one or more individual retirement arrangements. You
may add additional amounts of $1,000 or more at any time (subject to certain
restrictions). Additional amounts are limited to $2,000 per year, but
additional rollover or transfer amounts are unlimited. Subject to certain age
restrictions, there are two ways to purchase a Certificate, as a Combined
guaranteed minimum death benefit, or "GMDB" and GMIB Benefit, or "Plan A," or
as a GMDB Only Benefit, or "Plan B." Both benefits are discussed below.
4. INVESTMENT OPTIONS. You may invest in any or all of the following
Investment Funds, which invest in shares of corresponding portfolios of The
Hudson River Trust (HR Trust) and EQ Advisors Trust, (EQ Trust). The
portfolios are described in the prospectuses for HR Trust and EQ Trust.
<TABLE>
<CAPTION>
HR TRUST INVESTMENT FUNDS EQ TRUST INVESTMENT FUNDS
- ---------------------------------- ------------------------------------------------------------------------
<S> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors T. Rowe Price International Stock Merrill Lynch Basic Value
(Alliance) Growth Investors T. Rowe Price Equity Income
EQUITY SERIES:
(Alliance) Growth & Income EQ/Putnam Growth & Income Value
(Alliance) Common Stock EQ/Putnam International Equity
(Alliance) Global EQ/Putnam Investors Growth
(Alliance) International EQ/ Putnam Balanced
(Alliance) Aggressive Stock MFS Research
(Alliance) Small Cap Growth MFS Emerging Growth Companies
(Alliance) Equity Index Morgan Stanley Emerging Markets Equity
FIXED INCOME SERIES:
(Alliance) Money Market Warburg Pincus Small Company Value
(Alliance) Intermediate Gov't Merrill Lynch Global Allocation
Securities
</TABLE>
You may also invest in one or more GIRO's currently maturing in years 1998
through 2007.
2
<PAGE>
5. EXPENSES. The Certificate has expenses as follows: For Plan A--there is an
annual charge as a percentage of the GMDB. The percentage is equal to 0.45%
for the 6% to Age 80 Benefit; and 0.30% for the 6% to Age 70 Benefit. For Plan
B-- the percentage is equal to 0.20% (for ages 20 through 75) and 0.45% (for
ages 76 through 78). As a percentage of assets in the Investment Funds, a
daily charge is deducted for mortality and expense risks at an annual rate of
0.90%; a daily charge is deducted for administration expenses at an annual
rate of 0.25%.
The charges for the portfolios of HR Trust range from 0.67% to 0.86% of the
average daily assets of HR Trust portfolios, depending upon HR Trust
portfolios selected (based on 1996 other expenses). The charges for the
portfolios of EQ Trust range from 0.85% to 1.75% of the average daily assets
of EQ Trust portfolio. These amounts are based on estimates and, for EQ Trust,
a current expense cap. The Rule 12b-1 Plan fees for the portfolios of HR Trust
and EQ Trust are 0.25% of the average daily assets of HR Trust and EQ Trust,
respectively. Charges for state premium and other applicable taxes may also
apply at the time you elect to start receiving income annuity payments.
A withdrawal charge is imposed as a percentage of each contribution withdrawn
in excess of a free corridor amount, or if the Certificate is surrendered. The
free corridor amount for withdrawals is 15% of the Certificate's value at the
beginning of the year, except that under the IRA Assured Payment Option and
IRA APO Plus it is 10%. The withdrawal charge does not apply under certain of
the distribution methods available under the Certificate. When applicable, the
withdrawal charge is determined in accordance with the table below, based on
the year a contribution is withdrawn. The year in which we receive your
contribution is "Year 1."
Year of Contribution Withdrawal
1 2 3 4 5 6 7 8+
------------------------------------------------------------
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
The following chart is designed to help you understand the charges in the
Certificate. The "Total Annual Charges" column shows the combined total of the
Certificate charges and the portfolio charges, as shown in the first two
columns. The last two columns show you two examples of the charges, in
dollars, that you would pay under a Certificate. The examples assume that you
invested $1,000 in a Certificate which earns 5% annually and that you withdraw
your money: (1) at the end of year 1, and (2) at the end of year 10. For year
1, the Total Annual Charges are assessed as well as the withdrawal charge. For
year 10, the example shows the aggregate of all the annual charges assessed
for the 10 years, but there is no withdrawal charge. No charges for state
premium and other applicable taxes are assumed in the examples.
3
<PAGE>
<TABLE>
<CAPTION>
EXAMPLES
TOTAL ANNUAL TOTAL ANNUAL TOTAL Total Annual
CERTIFICATE PORTFOLIO ANNUAL Expenses at End of:
INVESTMENT FUND CHARGES CHARGES CHARGES (1) (2)
1 Year 10 Years
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative
Investors
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock
(Alliance) Global
(Alliance) International [TO BE INSERTED BY AMENDMENT]
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES:
(Alliance) Money Market
(Alliance) Intermediate Gov't
Securities
EQ/Putnam Investors Growth
EQ/ Putnam Balanced
MFS Research
MFS Emerging Growth
Companies
Morgan Stanley Emerging
Markets Equity
Warburg Pincus Small
Company Value
Merrill Lynch Global
Allocation
Merrill Lynch Basic Value
</TABLE>
For Investment Funds investing in portfolios with less than 10 years of
operations, charges have been estimated. The charges reflect any expense
reimbursement or waiver. Portfolio charges to Investment Funds investing in EQ
Trust portfolios reflect the expenses of publicly available mutual funds that
are managed by the respective EQ fund advisers. These public funds are
substantially similar to the EQ Trust portfolios whose shares are purchased by
Investment funds of the Separate Account. For more detailed information, see
the Fee Table in the prospectus.
4
<PAGE>
6. TAXES. Your earnings are not taxed until distributions are made from your
Certificate. If you are younger than age 59 1/2 when you receive any
distributions, you may be charged a 10% Federal tax penalty on the amount
received.
7. ACCESS TO YOUR MONEY. During the accumulation phase, you also may receive
distributions under a Certificate through the following WITHDRAWAL OPTIONS:
(1) Lump Sum Withdrawals of at least $1,000 may be taken at any time. Lump Sum
Withdrawals are also available under the Choice Income Plan. (2) Substantially
Equal Payment Withdrawals (if you are less than age 59 1/2), paid monthly,
quarterly or annually based on life expectancy; (3) Systematic Withdrawals (if
you are age 59 1/2 to 70), paid monthly, quarterly or annually, subject to
certain restrictions, including a maximum percentage of your Certificate's
value; and (4) Minimum Distribution Withdrawals (after you are age 70 1/2),
which pays the minimum amount necessary to meet minimum distribution
requirements in the Internal Revenue Cole. You also have access to your
Certificate's value by surrendering the Certificate. All or a portion of
certain withdrawals may be subject to a withdrawal charge to the extent that
the withdrawal exceeds the free corridor amount. A free corridor amount does
not apply to a surrender. Withdrawals and surrenders are subject to income tax
and may be subject to a tax penalty.
8. PERFORMANCE. During the accumulation phase, your Certificate's value in the
Investment Funds may vary up or down depending upon the investment performance
of the Investment Funds you have selected. The following chart shows total
returns for each Investment Fund for the time periods shown. The results
indicated reflect all of the charges (including the combined GMDB/GMIB charge
for the optional GMIB benefit), except for the withdrawal charge. If included,
the withdrawal charge would reduce the performance numbers shown below. Past
performance is not a guarantee of future results.
For periods prior to October 1996, the performance data for Investment Funds
investing in HR Trust portfolios does not reflect Rule 12b-1 fees. Performance
data for Investment Funds investing in EQ Trust portfolios are presented on a
hypothetical basis that reflect the actual investment experience of
substantially similar publicly available mutual funds managed by the
respective EQ Trust portfolio advisers.
5
<PAGE>
CALENDAR YEAR
<TABLE>
<CAPTION>
INVESTMENT FUND 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock
(Alliance) Global
(Alliance) International
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES:
(Alliance) Money Market
(Alliance) Intermediate Gov't
Securities
T. Rowe Price International Stock
T. Rowe Price Equity Income
EQ/Putnam Growth & Income Value
EQ/Putnam International Equity
EQ/Putnam Investors Growth
EQ/ Putnam Balanced
MFS Research
MFS Emerging Growth Companies
Morgan Stanley Emerging Markets Equity
Warburg Pincus Small Company Value
Merrill Lynch Global Allocation
Merrill Lynch Basic Value
</TABLE>
9. DEATH BENEFIT. If you die before amounts are applied under an income
annuity option, the named beneficiary will be paid a death benefit. The death
benefit is equal to (1) your Certificate's value in the Investment Funds, or
if greater, the GMDB, and (2) the amount of the death benefit provided with
respect to GIRO's.
GMDB -- If you are between the ages of 20 to 75, the GMDB will be a "6% to
Age 80 Benefit." For ages 76 to 78 the GMDB benefit will grow to age 85
instead of 80. In New York the GMDB is an "Annual Ratchet to Age 80" for
ages 20 to 78.
6% to Age 80 Benefit (Not available in New York) -- We add interest to the
initial amount at 6% (3% for amounts in the Fixed Income Series) through
the Annuitant's age 80.
If you elect the Plan A and are between the ages of 20 through 65), you
may instead elect a 6% to Age 70 Benefit, for a lower charge.
Annual Ratchet to Age 80 -- This is the amount reset each year through the
Annuitant's age 80 to your Certificate's value, if it is higher than the
prior year's GMDB.
6
<PAGE>
10. OTHER INFORMATION.
GMIB. GMIB is an optional benefit that provides a minimum amount of guaranteed
lifetime income for your future. When you are ready to convert (during
specified periods of time) your Certificate's value to the IRA Assured Payment
Option the minimum amount of lifetime income that will be provided will be the
greater of (i) your GMIB or (ii) your Certificate's current value in the
Investment Funds, applied at current annuity purchase factors.
FREE LOOK. You can examine the Certificate for a period of 10 days after you
receive it, and return it to us for a refund. The free look period is longer
in some states.
Your refund will equal your Certificate's value, reflecting any investment
gain or loss, in the Investment Funds, and any increase or decrease in the
value of any amounts held in the GIRO's, through the date we receive your
Certificate. Some states or Federal income tax regulations may require that we
calculate the refund differently.
PRINCIPAL ASSURANCE. This option is designed to assure the return of your
original amount invested on a GIRO maturity date, by putting a portion of your
money in a particular GIRO, and the balance in the Investment Funds in any way
you choose. Assuming that you make no transfers or withdrawals of the portion
in the GIRO, such amount will grow to your original investment upon maturity.
REBALANCING. You can have your money automatically readjusted among the
Investment Funds and GIRO's periodically in order to retain the proportional
investments you select.
DOLLAR COST AVERAGING. You can elect at issue of your Certificate to allocate
your contribution to the Money Market Fund and have a dollar amount
transferred from the Money Market Fund into the other Investment Funds over
the first twelve months in which case Certificate charges will not be deducted
during that period from amounts in the Money Market Fund. Or, you can elect to
have a dollar amount or percentage transferred from the Money Market Fund into
the other Investment Funds on a periodic basis over a longer period of time,
and all applicable charges deducted from the value in the Money Market Fund
will apply. Dollar cost averaging does not assure a profit or protect against
a loss should market prices decline.
REPORTS. We will provide you with an annual statement of your Certificate's
values as of the last day of each year, and three additional reports of your
Certificate's values each year. You also will be provided with written
confirmations of each financial transaction, and copies of annual and
semi-annual statements of HR Trust and EQ Trust.
You may call toll-free at 1-800-789-7771 for a recording of daily Investment
Fund values and guaranteed rates applicable to GIRO's.
11. INQUIRIES. If you need more information, please contact your registered
representative. You may also contact us, at:
The Equitable Life Assurance Society of the United States
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Telephone 1-800-789-7771 and Fax 1-201-583-2224
7
<PAGE>
INCOME MANAGER (SERVICE MARK)
PROSPECTUS FOR ROLLOVER IRA
AND CHOICE INCOME PLAN
DATED MAY 1, 1997
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
Issued By:
The Equitable Life Assurance Society of the United States
This prospectus describes individual retirement annuity (IRA) certificates
The Equitable Life Assurance Society of the United States (EQUITABLE LIFE,
WE, OUR and US) offers under a combination variable and fixed deferred
annuity contract (ROLLOVER IRA) issued on a group basis or as individual
contracts. Enrollment under a group contract will be evidenced by issuance of
a certificate. Certificates and individual contracts each will be referred to
as "Certificates." Under the Rollover IRA we will accept only initial
contributions that are rollover contributions or that are direct transfers
from other individual retirement arrangements, as described in this
prospectus. A minimum initial contribution of $5,000 is required to put a
Certificate into effect.
The Rollover IRA is designed to provide retirement income. Contributions
accumulate on a tax-deferred basis and can be distributed under a number of
different methods which are designed to be responsive to the owner's
(CERTIFICATE OWNER, YOU and YOUR) objectives. The distribution methods
include the Choice Income Plan featuring the IRA ASSURED PAYMENT OPTION, IRA
Assured Payment Option Plus (IRA APO PLUS), and a variety of payout options,
including variable annuities and fixed annuities. The IRA Assured Payment
Option and IRA APO Plus are also available for election in the application if
you are interested in receiving distributions rather than accumulating funds.
The Rollover IRA offers investment options (INVESTMENT OPTIONS) that permit
you to create your own strategies. These Investment Options include 23
variable investment funds (INVESTMENT FUNDS) and each GUARANTEE PERIOD in the
GUARANTEED PERIOD ACCOUNT.
We invest each Investment Fund in Class IB shares of a corresponding
portfolio (PORTFOLIO) of The Hudson River Trust (HR TRUST) or EQ Advisors
Trust (EQ TRUST), mutual funds whose shares are purchased by separate
accounts of insurance companies. The prospectuses for HR Trust and EQ Trust,
both of which accompany this prospectus, describe the investment objectives,
policies and risks of the Portfolios.
The Investment Funds investing in corresponding Portfolios of HR Trust are:
the Asset Allocation Series--(Alliance) Conservative Investors and (Alliance)
Growth Investors Funds; the Equity Series--(Alliance) Growth & Income,
(Alliance) Common Stock, (Alliance) Global, (Alliance) International,
(Alliance) Aggressive Stock, (Alliance) Small Cap Growth and (Alliance)
Equity Index Funds; and the Fixed Income Series--(Alliance) Money Market and
(Alliance) Intermediate Government Securities Funds.
The Investment Funds investing in corresponding Portfolios of EQ Trust are:
T. Rowe Price International Stock, T. Rowe Price Equity Income, EQ/Putnam
Growth & Income Value, EQ/Putnam International Equity, EQ/Putnam Investors
Growth, EQ/Putnam Balanced, MFS Research, MFS Emerging Growth Companies,
Morgan Stanley Emerging Markets Equity, Warburg Pincus Small Company Value,
Merrill Lynch Global Allocation, and Merrill Lynch Basic Value Funds.
Amounts allocated to a Guarantee Period accumulate on a fixed basis and are
credited with interest at a rate we set (GUARANTEED RATE) for the entire
period. On each business day (BUSINESS DAY) we will determine the Guaranteed
Rates available for amounts newly allocated to Guarantee Periods. A market
value adjustment (positive or negative) will be made for withdrawals,
transfers, surrender and certain other transactions from a Guarantee Period
before its expiration date (EXPIRATION DATE). Each Guarantee Period has its
own Guaranteed Rates. The Guarantee Periods currently available have
Expiration Dates of February 15, in years 1998 through 2007 under the
Rollover IRA and 1998 through 2012 under the Choice Income Plan.
This prospectus provides information about the Rollover IRA that prospective
investors should know before investing. You should read it carefully and
retain it for future reference. The prospectus is not valid unless
accompanied by current prospectuses for HR Trust and EQ Trust, both of which
you should also read carefully.
Registration statements relating to Separate Account No. 45 (SEPARATE
ACCOUNT) and interests under the Guarantee Periods have been filed with the
Securities and Exchange Commission (SEC). The statement of additional
information (SAI), dated May 1, 1997, which is part of the registration
statement for the Separate Account, is available free of charge upon request
by writing to our Processing Office or calling 1-800-789-7771, our toll-free
number. The SAI has been incorporated by reference into this prospectus. The
Table of Contents for the SAI appears at the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE CERTIFICATES 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 INVESTED.
Copyright 1997
The Equitable Life Assurance Society of the United States,
New York, New York 10104.
All rights reserved.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable Life's Annual Report on Form 10-K for the year ended December
31, 1996 is incorporated herein by reference.
All documents or reports filed by Equitable Life pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE
ACT) after the date hereof and prior to the termination of the offering of
the securities offered hereby shall be deemed to be incorporated by reference
in this prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified and superseded, to constitute a part of this prospectus.
Equitable Life files its Exchange Act documents and reports, including its
annual and quarterly reports on Form 10-K and Form 10-Q, electronically
pursuant to EDGAR under CIK No. 0000727920.
Equitable Life will provide without charge to each person to whom this
prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits not specifically incorporated by reference
into the text of such documents). Requests for such documents should be
directed to The Equitable Life Assurance Society of the United States, 1290
Avenue of the Americas, New York, New York 10104. Attention: Corporate
Secretary (telephone: (212) ).
2
<PAGE>
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL TERMS PAGE 4
FEE TABLE PAGE 6
PART 1: EQUITABLE LIFE, THE SEPARATE
ACCOUNT AND THE
INVESTMENT FUNDS PAGE 10
Equitable Life 10
HR Trust 10
HR Trust's Investment Adviser 11
EQ Trust 11
EQ Trust's Manager and Advisers 11
Investment Policies and Objectives of
HR Trust's Portfolios and EQ Trust's
Portfolios 12
PART 2: INVESTMENT PERFORMANCE PAGE 15
Standardized Performance Data 15
Rate of Return Data for Investment
Funds 18
Communicating Performance Data 24
Money Market Fund and Intermediate
Government Securities Fund Yield
Information 24
PART 3: THE GUARANTEED PERIOD
ACCOUNT PAGE 25
Guarantee Periods 25
Market Value Adjustment For Transfers,
Withdrawals or Surrender Prior to the
Expiration Date 26
Modal Payment Portion 27
Investments 27
PART 4: PROVISIONS OF THE
CERTIFICATES AND SERVICES
WE PROVIDE PAGE 29
What is the Rollover IRA? 29
Availability of the Certificates 29
Contributions Under the Certificates 29
Methods of Payment 29
Allocation of Contributions 30
Free Look Period 31
Annuity Account Value 31
Transfers Among Investment Options 31
Dollar Cost Averaging 32
Death Benefit 32
GMIB 33
Cash Value 35
Surrendering the Certificates to
Receive the Cash Value 35
When Payments are Made 35
Assignment 36
Services We Provide 36
Distribution of the Certificates 36
PART 5: DISTRIBUTION METHODS UNDER THE
CERTIFICATES PAGE 37
IRA Assured Payment Option 37
IRA APO Plus 40
Withdrawal Options 42
Income Annuity Options 44
PART 6: DEDUCTIONS AND CHARGES PAGE 46
Charges Deducted from the Annuity
Account Value 46
Charges Deducted from the Investment
Funds 47
HR Trust Charges to Portfolios 47
EQ Trust Charges to Portfolios 47
Sponsored Arrangements 48
Other Distribution Arrangements 48
PART 7: VOTING RIGHTS PAGE 49
HR Trust and EQ Trust Voting Rights 49
Voting Rights of Others 49
Separate Account Voting Rights 49
Changes in Applicable Law 49
parT 8: TAX ASPECTS OF THE
CERTIFICATES PAGE 50
Tax-Qualified Individual Retirement
Annuities (IRAS) 50
Penalty Tax on Early Distributions 55
Tax Penalty for Insufficient
Distributions 55
Tax Penalty for Excess Distributions or
Accumulation 55
Federal and State Income Tax
Withholding 56
Other Withholding 56
Impact of Taxes to Equitable Life 56
Transfers Among Investment Options 56
Tax Changes 56
PART 9: INDEPENDENT ACCOUNTANTS PAGE 57
APPENDIX I: MARKET VALUE
ADJUSTMENT EXAMPLE PAGE 58
APPENDIX II: GUARANTEED MINIMUM
DEATH BENEFIT (GMDB) EXAMPLE PAGE 59
APPENDIX III: EXAMPLE OF PAYMENTS
UNDER THE IRA ASSURED PAYMENT
OPTION AND IRA APO PLUS PAGE 60
APPENDIX IV: IRS TAX DEDUCTION TABLE PAGE 61
STATEMENT OF ADDITIONAL
INFORMATION TABLE OF CONTENTS PAGE 62
</TABLE>
3
<PAGE>
GENERAL TERMS
ACCUMULATION UNIT--Contributions that are invested in an Investment Fund
purchase Accumulation Units in that Investment Fund.
ACCUMULATION UNIT VALUE--The dollar value of each Accumulation Unit in an
Investment Fund on a given date.
ANNUITANT--The individual who is the measuring life for determining death
benefits before the Annuity Commencement Date, and annuity benefits.
ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under
the Certificate. See "Annuity Account Value" in Part 4.
ANNUITY COMMENCEMENT DATE--The date on which amounts will be applied under an
income annuity option.
BUSINESS DAY--Generally, any day on which the New York Stock Exchange is open
for trading. For the purpose of determining the Transaction Date, our
Business Day ends at 4:00 p.m. Eastern Time or the closing of the New York
Stock Exchange, if earlier.
CASH VALUE--The Annuity Account Value minus any applicable charges.
CERTIFICATE--The Certificate issued under the terms of a group annuity
contract and any individual contract, including any endorsements.
CERTIFICATE OWNER--The person who owns a Rollover IRA Certificate and has the
right to exercise all rights under the Certificate. The Certificate Owner
must also be the Annuitant.
CODE--The Internal Revenue Code of 1986, as amended.
CONTRACT DATE--The date on which you are enrolled under the group annuity
contract, or the effective date of the individual contract. This is usually
the Business Day we receive the initial contribution at our Processing
Office.
CONTRACT YEAR--The 12-month period beginning on your Contract Date and each
anniversary of that date.
EQ TRUST--EQ Advisors Trust, a mutual fund in which the assets of separate
accounts of insurance companies are invested. EQ Financial Consultants, Inc.
(EQ Financial) is the manager to EQ Trust and has appointed advisers for each
of the Portfolios.
EXPIRATION DATE--The date on which a Guarantee Period ends.
GUARANTEED MINIMUM DEATH BENEFIT (GMDB)--The minimum amount payable with
respect to the Investment Funds, upon the death of the Annuitant.
GUARANTEED MINIMUM INCOME BENEFIT (GMIB) --A minimum amount of future
guaranteed lifetime income provided with respect to the Investment Funds.
GUARANTEE PERIOD--Any of the periods of time ending on an Expiration Date
that are available for investment under the Certificates. Guarantee Periods
may also be referred to as Guaranteed Interest Rate Options ("GIROs").
GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods
and the Modal Payment Portion of such Account.
GUARANTEED RATE--The annual interest rate established for each allocation to
a Guarantee Period.
HR TRUST--The Hudson River Trust, a mutual fund in which the assets of
separate accounts of insurance companies are invested. Alliance Capital
Management L.P. (Alliance) is the adviser to HR Trust.
INVESTMENT FUNDS--The funds of the Separate Account that are available under
the Certificates.
INVESTMENT OPTIONS--The choices for investment: the Investment Funds and each
available Guarantee Period.
IRA--An individual retirement annuity, as defined in Section 408(b) of the
Code.
IRA ASSURED PAYMENT OPTION--A distribution option which provides guaranteed
lifetime income. The IRA Assured Payment Option may be elected in the
application or elected as a distribution option at a later date. Under this
option amounts are allocated to the Guaranteed Period Account and the Life
Contingent Annuity. No amounts may be allocated to the Investment Funds.
IRA APO PLUS--A distribution option which provides guaranteed lifetime
income. IRA APO Plus may be elected in the application or as a distribution
option at a later date. Under this option amounts are allocated to the
Guaranteed Period Account, the Life Contingent Annuity and to the Investment
Funds. The amount in the Investment Funds is then systematically converted to
increase the guaranteed lifetime income.
4
<PAGE>
LIFE CONTINGENT ANNUITY--Provides guaranteed lifetime income beginning at a
future date. Amounts may only be applied under the Life Contingent Annuity
through election of the IRA Assured Payment Option and IRA APO Plus.
MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date.
MODAL PAYMENT PORTION--Under the IRA Assured Payment Option and IRA APO Plus,
the portion of the Guaranteed Period Account from which payments, other than
payments due on an Expiration Date, are made.
PORTFOLIOS--The portfolios of HR Trust and EQ Trust that correspond to the
Investment Funds of the Separate Account.
PROCESSING DATE--The day when we deduct certain charges from the Annuity
Account Value. If the Processing Date is not a Business Day, it will be on
the next succeeding Business Day. The Processing Date will be once each year
on each anniversary of the Contract Date.
PROCESSING OFFICE--The address to which all contributions, written requests
(e.g., transfers, withdrawals, etc.) or other written communications must be
sent. See "Services We Provide" in Part 4.
SAI--The statement of additional information for the Separate Account under
the Rollover IRA.
SEPARATE ACCOUNT--Equitable Life's Separate Account No. 45.
TRANSACTION DATE--The Business Day we receive a contribution or a transaction
request providing all the information we need at our Processing Office. If
your contribution or request reaches our Processing Office on a non-Business
Day, or after the close of the Business Day, the Transaction Date will be the
next following Business Day. Transaction requests must be made in a form
acceptable to us.
VALUATION PERIOD--Each Business Day together with any preceding non-business
days.
5
<PAGE>
FEE TABLE
The purpose of this fee table is to assist you in understanding the various
costs and expenses you may bear directly or indirectly under the Certificate
so that you may compare them with other similar products. The table reflects
both the charges of the Separate Account and the expenses of HR Trust and EQ
Trust. Charges for applicable taxes such as state or local premium taxes may
also apply. For a complete description of the charges under the Certificate,
see "Part 6: Deductions and Charges." For a complete description of each
trust's charges and expenses, see the prospectuses for HR Trust and EQ Trust.
As explained in Part 3, the Guarantee Periods are not a part of the Separate
Account and are not covered by the fee table and examples. The only charge
shown in the Table which will be deducted from amounts allocated to the
Guarantee Periods is the withdrawal charge. See "Part 6: Deductions and
Charges." A market value adjustment (either positive or negative) also may be
applicable as a result of a withdrawal, transfer or surrender of amounts from
a Guarantee Period. See "Part 3: The Guaranteed Period Account."
OWNER TRANSACTION EXPENSES (DEDUCTED FROM ANNUITY ACCOUNT VALUE)
- ----------------------------------------------------------------
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (percentage deducted upon
surrender or for certain withdrawals. The applicable withdrawal charge
percentage is determined by the Contract Year in which the withdrawal is
made or the Certificate is surrendered beginning with "Contract Year 1"
with respect to each contribution withdrawn or surrendered. For contribution,
the Contract Year in which we receive that contribution is "Contract
Year 1")(1)
<TABLE>
<CAPTION>
CONTRACT
YEAR
--------
<S> <C>
1 ... 7.00%
2 ... 6.00
3 ... 5.00
4 ... 4.00
5 ... 3.00
6 ... 2.00
7 ... 1.00
8+ .. 0.00
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED BENEFIT EXPENSE (DEDUCTED FROM ANNUITY ACCOUNT VALUE AS A
PERCENTAGE OF GMDB THEN IN EFFECT)(2)
- --------------------------------------------------------------------
<S> <C>
COMBINED GMDB/GMIB (PLAN A) -- AGES 20 THROUGH 75 ................................. 0.45%
GMDB ONLY (PLAN B) -- AGES 20 THROUGH 75 .......................................... 0.20%
GMDB ONLY (PLAN B) -- AGES 76 THROUGH 78 .......................................... 0.45%
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT
FUND)
MORTALITY AND EXPENSE RISKS ....................................................... 0.90%
ADMINISTRATION(3) ................................................................. 0.25%
-------
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES ........................................... 1.15%
=======
</TABLE>
- ------------
See footnotes on next page.
6
<PAGE>
HR TRUST AND EQ TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS
IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIOS
---------------------------------------------------------------------------------
(ALLIANCE) (ALLIANCE) (ALLIANCE) (ALLIANCE)
CONSERVATIVE GROWTH GROWTH & COMMON (ALLIANCE)
INVESTORS INVESTORS INCOME STOCK GLOBAL
HR TRUST ---------------- -------------- --------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory Fee X.XX% 0.52% X.XX% 0.36% 0.53%
Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25%
Other expenses X.XX% 0.07% X.XX% 0.02% 0.08%
---------------- --------------- -------------- -------------- ----------
TOTAL HR TRUST ANNUAL EXPENSES(5) X.XX% 0.84% X.XX% 0.63% 0.86%
================ ============== ================= ============== =============
(ALLIANCE)
(ALLIANCE) (ALLIANCE) (ALLIANCE) INTERMEDIATE
(ALLIANCE) AGGRESSIVE SMALL EQUITY MONEY GOVT.
HR TRUST INTERNATIONAL STOCK CAP GROWTH INDEX MARKET SECURITIES
--------------- ---------------- -------------- ----------------- -------------- --------------
Investment Advisory Fee X.XX% 0.46% X.XX% X.XX% 0.40% X.XX%
Rule 12-B Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses X.XX% 0.02% X.XX% X.XX% 0.02% X.XX%
--------------- ---------------- -------------- ----------------- -------------- --------------
TOTAL HR TRUST ANNUAL
EXPENSES(5) X.XX% 0.73% X.XX% X.XX% 0.67% X.XX%
================= ================ ============== ================= ============== ==============
T. ROWE
PRICE T. ROWE EQ/PUTNAM EQ/PUTNAM EQ/PUTNAM
INTERNATIONAL PRICE EQUITY GROWTH & INTERNATIONAL INVESTORS EQ/PUTNAM
EQ TRUST STOCK INCOME INCOME VALUE EQUITY GROWTH BALANCED
----------------- ---------------- -------------- ----------------- -------------- --------------
Investment Advisory Fee 0.75% 0.55% 0.55% 0.70% 0.55% 0.55%
Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.25% 0.05% 0.05% 0.25% 0.05% 0.10%
----------------- ---------------- -------------- ----------------- -------------- --------------
TOTAL EQ TRUST ANNUAL
EXPENSES(6) 1.25% 0.85% 0.85% 1.20% 0.85% 0.90%
================= ================ ============== ================= ============== ==============
MFS MORGAN WARBURG
EMERGING STANLEY PINCUS SMALL MERRILL LYNCH MERRILL
MFS GROWTH MARKETS COMPANY GLOBAL LYNCH
EQ TRUST RESEARCH COMPANIES EQUITY VALUE ALLOCATION BASIC VALUE
----------------- ---------------- -------------- ----------------- -------------- --------------
Investment Advisory Fee 0.55% 0.55% 1.15% 0.65% 0.70% 0.55%
RUle 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.05% 0.05% 0.35% 0.10% 0.25% 0.05%
----------------- ---------------- -------------- ----------------- -------------- --------------
TOTAL EQ TRUST ANNUAL
EXPENSES(6) 0.85% 0.85% 1.75% 1.00% 1.20% 0.85%
================= ================ ============== ================= ============== ==============
</TABLE>
[FN]
- ------------
Notes:
(1) Deducted upon a withdrawal with respect to amounts in excess of the 15%
(10% under the IRA Assured Payment Option and IRA APO Plus) free
corridor amount, and upon a surrender. See "Part 6: Deductions and
Charges," "Withdrawal Charge." We reserve the right to impose an
administration charge of the lesser of $25 and 2.0% of the amount
withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. See "Withdrawal Processing Charge" also in Part 6.
(2) This charge is deducted annually on each Processing Date. See "Combined
GMDB/GMIB Benefit Charge (Plan A)" and "GMDB Only Benefit Charge (Plan
B)" in Part 6.
(3) We reserve the right to increase this charge to an annual rate of 0.35%,
the maximum permitted under the Certificates.
(4) The Class IB shares of HR Trust and EQ Trust are subject to fees imposed
under distribution plans (herein, the "Rule 12b-1 Plan") adopted by HR
Trust and EQ Trust pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The Rule 12b-1 Plans provide that HR Trust and EQ Trust, on
behalf of each Portfolio, may pay annually up to 0.25% of the average
daily net assets of a Portfolio attributable to its Class IB shares in
respect of activities primarily intended to result in the sale of the
Class IB shares. The Rule 12b-1 Plan fee may be increased only by action
of the respective Board of Trustees of HR Trust and EQ Trust up to a
maximum of 0.50% per annum.
(5) The amounts shown for the Portfolios of HR Trust which began issuing
Class IB shares on October 2, 1996, are annualized. The investment
advisory fee for each Portfolio may vary from year to year depending
upon the average daily net assets of the respective Portfolio of HR
Trust. The maximum investment advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. The other
direct operating expenses will also fluctuate from year to year
depending on actual expenses. See "HR Trust Charges to Portfolios" in
Part 6.
(6) "Other Expenses" shown are based on estimated amounts (after expense
reimbursement or waiver) for the current fiscal year, as EQ Trust
commenced operations on . The investment advisory fee for each
Portfolio may vary from year to year depending upon the average daily
net assets of the respective Portfolio of EQ Trust. The maximum
investment advisory fees, however, cannot be increased without a vote of
that Portfolio's shareholders. The other direct operating expenses will
also fluctuate from year to year depending on actual expenses. See "EQ
Trust Charges to Portfolios" in Part 6.
7
<PAGE>
EXAMPLES
- --------
The examples below show the expenses that a hypothetical Certificate Owner
would pay under the Combined GMDB/GMIB Benefit (Plan A) and under the GMDB
Only Benefit (Plan B) in the two situations noted below assuming a $1,000
contribution invested in one of the Investment Funds listed, and a 5% annual
return on assets.(1)
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future investment
performance.
COMBINED GMDB/GMIB BENEFIT (PLAN A) ELECTION
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER
YOUR CERTIFICATE IF YOU
SURRENDER YOUR CERTIFICATE AT THE END OF EACH AT THE END OF EACH
PERIOD SHOWN, THE EXPENSES WOULD BE: PERIOD SHOWN, THE
EXPENSES WOULD BE:
1 YEAR 3 YEARS 1 YEAR 3 YEARS
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative
Investors
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock [to be inserted [to be inserted
(Alliance) Global by amendment] by amendment]
(Alliance) International
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES:
(Alliance) Money Market
(Alliance) Intermediate Govt.
Securities
T. Rowe Price
Int'l Stock
T. Rowe Price
Equity Income
EQ/Putnam Growth
& Income Value
EQ/Putnam Int'l
Equity
EQ/Putnam
Investors Growth
EQ/Putnam
Balanced
MFS Research
MFS Emerging
Growth Companies
Morgan Stanley
Emerging Markets
Equity
Warburg Pincus
Small Company
Value
Merrill Lynch
Global Allocation
Merrill Lynch
Basic Value
</TABLE>
8
<PAGE>
GMDB ONLY BENEFIT (PLAN B) ELECTION
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER
YOUR CERTIFICATE AT
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH THE END OF EACH
PERIOD SHOWN, THE EXPENSES WOULD BE: PERIOD SHOWN, THE
EXPENSES WOULD BE:
1 YEAR 3 YEARS 1 YEAR 3 YEARS
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative
Investors
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock [to be inserted [to be inserted
(Alliance) Global by amendment] by amendment]
(Alliance) International
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES:
(Alliance) Money Market
(Alliance) Intermediate Govt.
Securities
T. Rowe Price
Int'l Stock
T. Rowe Price
Equity Income
EQ/Putnam Growth
& Income Value
EQ/Putnam Int'l
Equity
EQ/Putnam
Investors Growth
EQ/Putnam
Balanced
MFS Research
MFS Emerging
Growth Companies
Morgan Stanley
Emerging Markets
Equity
Warburg Pincus
Small Company
Value
Merrill Lynch
Global Allocation
Merrill Lynch
Basic Value
</TABLE>
- ------------
Notes:
(1) The amount accumulated could not be paid in the form of an annuity at
the end of any of the periods shown in the examples. If the amount
applied to purchase an annuity is less than $2,000, or the initial
payment is less than $20 we may pay the amount to the payee in a single
sum instead of as payments under an annuity form. See "Income Annuity
Options" in Part 5. The examples do not reflect charges for applicable
taxes such as state or local premium taxes that may also be deducted in
certain jurisdictions.
9
<PAGE>
PART 1: EQUITABLE LIFE, THE SEPARATE ACCOUNT
AND THE INVESTMENT FUNDS
EQUITABLE LIFE
Equitable Life is a New York stock life insurance company that has been in
business since 1859. For more than 100 years we have been among the largest
life insurance companies in the United States. Equitable Life has been
selling annuities since the turn of the century. Our home office is located
at 1290 Avenue of the Americas, New York, New York 10104. We are authorized
to sell life insurance and annuities in all fifty states, the District of
Columbia, Puerto Rico and the Virgin Islands. We maintain local offices
throughout the United States.
Equitable Life is a wholly owned subsidiary of The Equitable Companies
Incorporated (the Holding Company). The largest stockholder of the Holding
Company is AXA-UAP. AXA-UAP beneficially owns 63.9% of the outstanding common
stock of the Holding Company plus convertible preferred stock. Under its
investment arrangements with Equitable Life and the Holding Company, AXA-UAP
is able to exercise significant influence over the operations and capital
structure of the Holding Company and its subsidiaries, including Equitable
Life. AXA-UAP, a French company, is the holding company for an international
group of insurance and related financial service companies.
Equitable Life, the Holding Company and their subsidiaries managed
approximately $239.8 billion of assets as of December 31, 1996.
SEPARATE ACCOUNT NO. 45
Separate Account No. 45 is organized as a unit investment trust, a type of
investment company, and is registered with the SEC under the Investment
Company Act of 1940, as amended (1940 Act). This registration does not
involve any supervision by the SEC of the management or investment policies
of the Separate Account. The Separate Account has several Investment Funds,
each of which invests in shares of a corresponding Portfolio of HR Trust and
EQ Trust. Because amounts allocated to the Investment Funds are invested in a
mutual fund, investment return and principal will fluctuate and the
Certificate Owner's Accumulation Units may be worth more or less than the
original cost when redeemed.
Under the New York Insurance Law, the portion of the Separate Account's
assets equal to the reserves and other liabilities relating to the
Certificates are not chargeable with liabilities arising out of any other
business we may conduct. Income, gains or losses, whether or not realized,
from assets of the Separate Account are credited to or charged against the
Separate Account without regard to our other income gains or losses. We are
the issuer of the Certificates, and the obligations set forth in the
Certificates (other than those of Annuitants or Certificate Owners) are our
obligations.
In addition to contributions made under the Rollover IRA Certificates, we may
allocate to the Separate Account monies received under other contracts,
certificates, or agreements. Owners of all such contracts, certificates or
agreements will participate in the Separate Account in proportion to the
amounts they have in the Investment Funds that relate to their contracts,
certificates or agreements. We may retain in the Separate Account assets that
are in excess of the reserves and other liabilities relating to the Rollover
IRA Certificates or to other contracts, certificates or agreements, or we may
transfer the excess to our General Account.
We reserve the right, subject to compliance with applicable law; (1) to add
Investment Funds (or sub-funds of Investment Funds) to, or to remove
Investment Funds (or sub-funds) from, the Separate Account, or to add other
separate accounts; (2) to combine any two or more Investment Funds or
sub-funds thereof; (3) to transfer the assets we determine to be the share of
the class of contracts to which the Certificate belongs from any Investment
Fund to another Investment Fund; (4) to operate the Separate Account or any
Investment Fund as a management investment company under the 1940 Act, in
which case charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against the Separate Account; (5) to
deregister the Separate Account under the 1940 Act, provided that such action
conforms with the requirements of applicable law; (6) to restrict or
eliminate any voting rights as to the Separate Account; and (7) to cause one
or more Investment Funds to invest some or all of their assets in one or more
other trusts or investment companies. If any changes are made that result in
a material change in the underlying investment policy of an Investment Fund,
you will be notified as required by law.
HR TRUST
HR Trust is an open-end diversified management investment company, more
commonly called a mu-
10
<PAGE>
tual fund. As a "series" type of mutual fund, it issues several different
series of stock, each of which relates to a different Portfolio of HR Trust.
HR Trust commenced operations in January 1976 with a predecessor of its
Common Stock Portfolio. HR Trust does not impose a sales charge or "load" for
buying and selling its shares. All dividend distributions to HR Trust are
reinvested in full and fractional shares of the Portfolio to which they
relate. Investment Funds that invest in Portfolios of HR Trust, purchase
Class IB shares of a corresponding Portfolio of HR Trust. More detailed
information about HR Trust, its investment objectives, policies,
restrictions, risks, expenses, the Rule 12b-1 Plan relating to Class IB
shares, and all other aspects of its operations appears in its prospectus
which accompanies this prospectus or in its statement of additional
information.
HR TRUST'S MANAGER AND ADVISER
HR Trust is managed and advised by Alliance Capital Management L.P.
(Alliance), which is registered with the SEC as an investment adviser under
the 1940 Act. Alliance, a publicly-traded limited partnership, is indirectly
majority-owned by Equitable Life. On December 31, 1996, Alliance was managing
approximately $182.8 billion in assets. Alliance acts as an investment
adviser to various separate accounts and general accounts of Equitable Life
and other affiliated insurance companies. Alliance also provides management
and consulting services to mutual funds, endowment funds, insurance
companies, foreign entities, qualified and non-tax qualified corporate funds,
public and private pension and profit-sharing plans, foundations and
tax-exempt organizations.
Alliance's record as an investment manager is based, in part, on its ability
to provide a diversity of investment services to domestic, international and
global markets. Alliance prides itself on its ability to attract and retain a
quality, professional work force. Alliance employs more than 194 investment
professionals, including 83 research analysts. Portfolio managers have an
average investment experience of more than 15 years.
Alliance's main office is located at 1345 Avenue of the Americas, New York,
New York 10105.
EQ TRUST
EQ Trust is an open-end management investment company. As a "series type" of
mutual fund, EQ Trust issues different series of stock, each of which relates
to a different Portfolio of EQ Trust. EQ Trust commenced operations on .
EQ Trust does not impose a sales charge or "load" for buying and selling its
shares. All dividend distributions to EQ Trust are reinvested in full and
fractional shares of the Portfolio to which they relate. Investment Funds
that invest in Portfolios of EQ Trust, purchase Class IB shares of a
corresponding Portfolio of EQ Trust. More detailed information about EQ
Trust, its investment objectives, policies and restrictions, risks, expenses,
the Rule 12b-1 Plan relating to the Class IB shares, and all other aspects of
its operations appears in its prospectus which accompanies this prospectus
and in its statement of additional information.
EQ TRUST'S MANAGER AND ADVISERS
EQ Trust is managed by EQ Financial Consultants, Inc. (EQ Financial) which,
subject to supervision and direction of the Trustees of EQ Trust, has overall
responsibility for the general management and administration of EQ Trust. EQ
Financial is an investment adviser registered under the 1940 Act, and a
broker-dealer registered under the Exchange Act. EQ Financial is a Delaware
corporation and an indirect, wholly-owned subsidiary of Equitable Life.
EQ Financial has entered into investment advisory agreements with T. Rowe
Price Associates, Inc., Putnam Investment Management, Inc., Massachusetts
Financial Services Company, Morgan Stanley Asset Management, Inc., Warburg,
Pincus Counsellors, Inc., and Merrill Lynch Asset Management, L.P. each of
which serves as an adviser to one or more of the Portfolios of EQ Trust.
11
<PAGE>
INVESTMENT POLICIES AND OBJECTIVES OF HR TRUST'S PORTFOLIOS AND EQ TRUST'S
PORTFOLIOS
Each Portfolio has a different investment objective which it tries to achieve
by following separate investment policies. The policies and objectives of
each Portfolio will affect its return and its risks. There is no guarantee
that these objectives will be achieved. Set forth below is a summary of the
investment policy and objective for each Portfolio. This summary is qualified
in its entirety by reference to the prospectuses for HR Trust and EQ Trust
both of which accompany this prospectus. Please read the prospectuses for
each of the trusts carefully before investing.
The policies and objectives of HR Trust's Portfolios may be summarized as
follows:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ------------------------------ -------------------------------------------------------- -----------------------------
<S> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative Diversified mix of publicly-traded, fixed-income and High total return without, in
Investors equity securities; asset mix and security selection are the adviser's opinion, undue
primarily based upon factors expected to reduce risk. risk to principal
The Portfolio is generally expected to hold
approximately 70% of its assets in fixed income
securities and 30% in equity securities.
(Alliance) Growth Investors Diversified mix of publicly-traded, fixed-income and High total return consistent
equity securities; asset mix and security selection with the adviser's
based upon factors expected to increase possibility of determination of reasonable
high long-term return. The Portfolio is generally risk
expected to hold approximately 70% of its assets in
equity securities and 30% in fixed income securities.
EQUITY SERIES:
(Alliance) Growth & Income Primarily income producing common stocks and securities High total return through a
convertible into common stocks. combination of current income
and capital appreciation
(Alliance) Common Stock Primarily common stock and other equity-type Long-term growth of capital
instruments. and increasing income
(Alliance) Global Primarily equity securities of non-United States as Long-term growth of capital
well as United States companies.
(Alliance) International Primarily equity securities selected principally to Long-term growth of capital
permit participation in non-United States companies with
prospects for growth.
(Alliance) Aggressive Stock Primarily common stocks and other equity-type securities Long-term growth of capital
issued by quality small and intermediate sized companies
with strong growth prospects and in covered options on
securities.
(Alliance) Small Cap Growth Primarily U.S. common stocks and other equity-type Long-term growth of capital
securities issued by small companies with favorable
growth prospects.
12
<PAGE>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ------------------------------ -------------------------------------------------------- -----------------------------
(Alliance) Equity Index Selected securities in the Standard & Poor's 500 Index Total return (before expenses)
aggregate, approximate the performance results of the that approximates the total
Index return performance of the Index
(including reinvestment of
dividends) at risk level
consistent with that of the
Index
FIXED INCOME SERIES:
(Alliance) Money Market Primarily high quality U.S. dollar denominated money High level of current income
market instruments. while preserving assets and
maintaining liquidity
(Alliance) Intermediate Primarily debt securities issued or guaranteed by the High current income
Government Securities U.S. government, its agencies and instrumentalities. consistent with relative
Each investment will have a final maturity of not more stability of principal
than 10 years or a duration not exceeding that of a
10-year Treasury note.
The policies and objectives of EQ Trust's Portfolios may be summarized as follows:
T. Rowe Price Primarily common stocks of established non-United States Long-term growth of capital
International Stock companies.
T. Rowe Price Equity Primarily dividend paying common stocks of established Substantial dividend income
Income companies. and also capital appreciation
EQ/Putnam Growth & Income Primarily common stocks that offer potential for capital Capital growth and,
Value growth and may, consistent with the Portfolio's secondarily, current income
investment objective, invest in common stocks that offer
potential for current income.
EQ/Putnam International Primarily a diversified portfolio of equity securities Capital appreciation
Equity of companies located outside the United States.
EQ/Putnam Investors Growth Primarily common stocks in view of the Portfolio Long-term growth of capital
adviser's belief that equity ownership affords the best and any increased income that
opportunity for capital growth over the long term. results from this growth
EQ/Putnam Balanced A well-diversified portfolio of stocks and bonds that Balanced investment
will produce both capital growth and current income.
MFS Research A substantial portion of assets invest in common stock Long-term growth of capital
or securities convertible into common stock of companies and future income
believed by the Portfolio adviser to possess better than
average prospects for long-term growth. A smaller
proportion of assets may invest in bonds, short-term
debt obligations, preferred stocks or common stocks
whose principal characteristic is income production
rather than growth.
13
<PAGE>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ------------------------------ -------------------------------------------------------- -----------------------------
MFS Emerging Growth Companies Primarily (i.e., at least 80% of its assets under normal Long-term growth of capital
circumstances) in common stocks of emerging growth
companies that the Portfolio adviser believes are early
in their life cycle but which have the potential to
become major enterprises.
Morgan Stanley Emerging Primarily equity securities of emerging market country Long-term capital
Markets Equity issuers. appreciation
Warburg Pincus Small Company Primarily in a portfolio of equity securities of small Long-term capital
Value capitalization companies (i.e., companies having market appreciation
capitalizations of $1 billion or less at the time of
initial purchase) that the Portfolio adviser considers
to be relatively undervalued.
Merrill Lynch Global Fully-managed investment policy utilizing United States High total investment return
Allocation and foreign equity, debt and money market securities consistent with prudent risk
the combination of which will be varied from time to
time both with respect to types of securities and markets
in response to changing market and economic trends.
Merrill Lynch Basic Value Investment in securities, primarily equities, that the Capital appreciation and,
Portfolio adviser believes are undervalued and therefore secondarily, income
represent basic investment value.
</TABLE>
14
<PAGE>
PART 2: INVESTMENT PERFORMANCE
This Part presents performance data for each of the Investment Funds,
calculated by two methods. The first method, used in calculating the data in
the tables under "Standardized Performance Data," reflects all applicable
fees and charges, but not the charge for tax such as premium taxes.
The second method, used in calculating the data in the tables under "Rate of
Return Data for Investment Funds," also reflects all applicable fees and
charges, but not the withdrawal charge, the combined GMDB/GMIB charge, or the
charge for tax such as premium taxes. These additional charges, if applicable,
would effectively reduce the rates of return credited to a particular
Certificate.
HR Trust Portfolios
The performance data shown below for the Investment Funds investing in Class
IB shares or HR Trust Portfolios are based on the actual investment results
of the Portfolios, and have been adjusted for the fees and charges applicable
under the Certificates. However, the investment results prior to October
1996, when Class IB shares were not available, reflect the performance of the
Class IA shares of Portfolios of HR Trust, without adjustment to reflect Rule
12b-1 fees. The Class IA shares are not subject to Rule 12b-1 fees, but are
otherwise identical to the Class IB shares. The Rule 12b-1 fees would
effectively reduce such investment performance.
The performance data for the Money Market and Common Stock Investment Funds
that invest in corresponding HR Trust Portfolios, for periods prior to March
22, 1985, reflect the investment results of two open-end management separate
accounts (the "predecessor separate accounts") which were reorganized in unit
investment trust form. The "Since Inception" figures for these Investment
Funds are based on the date of inception of the predecessor separate
accounts. These performance data have been adjusted to reflect the maximum
investment advisory fee payable for the corresponding Portfolio of HR Trust,
as well as an assumed charge of 0.06% for direct operating expenses.
EQ Trust Portfolios
The Investment Funds of the Separate Account that invest in Class IB shares
of Portfolios of EQ Trust have only recently been established and no
Certificates funded by those Investment Funds have been issued as of the date
of this Prospectus. EQ Trust commenced operations on May , 1997. The
performance data shown in the tables for Investment Funds investing in Class
IB shares of EQ Trust Portfolios are presented on a hypothetical basis that
reflects the actual investment experience of publicly available mutual funds
that are managed by the respective EQ Trust Portfolio advisers. These public
funds have investment objectives, policies, strategies and risks
substantially similar to those of the corresponding Portfolios of EQ Trust.
The performance data shown reflect the estimated expenses of EQ Trust
Portfolios and all of the fees and charges that would have been made under the
Certificates as if the Investment Funds and the Portfolios had been in existence
for the periods shown. The public funds performance data shown in the tables are
solely for illustrative purposes, because the Portfolios themselves have no
prior performance history.
The results shown in the tables are not an estimate or guarantee of future
investment performance, and do not reflect the actual experience of amounts
invested under a particular Certificate.
See "Part 3: The Guaranteed Period Account" for information on the Guaranteed
Period Account.
STANDARDIZED PERFORMANCE DATA
The standardized performance data in the following tables illustrate the
average annual total return of the Investment Funds over the periods shown,
assuming a single initial contribution of $1,000 and the surrender of the
Certificate at the end of each period. These tables (which reflect the first
calculation method described above) are prepared in a manner prescribed by
the SEC for use when we advertise the performance of the Separate Account. An
Investment Fund's average annual total return is the annual rate of growth of
the Investment Fund that would be necessary to achieve the ending value of a
contribution kept in the Investment Fund for the period specified.
Each calculation assumes that the $1,000 contribution was allocated to only
one Investment Fund, no transfers or subsequent contributions were made and
no amounts were allocated to any other Investment Option under the
Certificate.
In order to calculate annualized rates of return, we divide the Cash Value of
a Certificate which is surrendered on December 31, 1996 by the $1,000
contribution made at the beginning of each period illustrated. The result of
that calculation is the total growth rate for the period. Then we annualize
that growth rate to obtain the average annual percentage increase (decrease)
during the period shown. When we "annualize," we assume that a single rate of
return applied each year during the period will produce the ending value,
taking into account the effect of compounding.
15
<PAGE>
AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON
DECEMBER 31, 1996*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION
- ------------------------------------ ---------- ---------- ---------- ---------- -------------
HR TRUST**
- ------------------------------------
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors xx.xx% xx.xx% xx.xx% -- xx.xx%
(Alliance) Growth Investors xx.xx xx.xx xx.xx -- xx.xx
EQUITY SERIES: [TO BE INSERTED BY AMENDMENT]
(Alliance) Growth & Income xx.xx xx.xx -- -- xx.xx
(Alliance) Common Stock xx.xx xx.xx xx.xx xx.xx% xx.xx
(Alliance) Global xx.xx xx.xx xx.xx -- xx.xx
(Alliance) International xx.xx -- -- -- xx.xx
(Alliance) Aggressive Stock xx.xx xx.xx xx.xx -- xx.xx
(Alliance) Small Cap Growth xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(Alliance) Money Market xx.xx xx.xx xx.xx xx.xx xx.xx
(Alliance) Intermediate Govt.
Securities xx.xx xx.xx xx.xx -- xx.xx
EQ TRUST***
T. Rowe Price Int'l Stock xx.xx -- -- -- xx.xx
T. Rowe Price Equity Income xx.xx -- -- -- xx.xx
EQ/Putnam Growth & Income Value xx.xx -- -- -- xx.xx
EQ/Putnam Int'l Equity xx.xx -- -- -- xx.xx
EQ/Putnam Investors Growth xx.xx -- -- -- xx.xx
[TO BE INSERTED BY AMENDMENT]
EQ/Putnam Balanced xx.xx -- -- -- xx.xx
MFS Research xx.xx -- -- -- xx.xx
MFS Emerging Growth Companies xx.xx -- -- -- xx.xx
Morgan Stanley Emerging Markets
Equity xx.xx -- -- -- xx.xx
Warburg Pincus Small Company Value xx.xx -- -- -- xx.xx
Merrill Lynch Global Allocation xx.xx -- -- -- xx.xx
Merrill Lynch Basic Value xx.xx -- -- -- xx.xx
</TABLE>
[FN]
- ------------
* See footnotes on next page.
16
<PAGE>
The tables below illustrate the growth of an assumed investment of $1,000,
with fees and charges deducted on the standardized basis described above for
the first method of calculation.
GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1996*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION
- ------------------------------------ ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
HR TRUST**
- ------------------------------------
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors $x,xxx $x,xxx $x,xxx -- $x,xxx
(Alliance) Growth Investors x,xxx x,xxx x,xxx -- x,xxx
EQUITY SERIES: [TO BE INSERTED BY AMENDMENT]
(Alliance) Growth & Income x,xxx x,xxx -- -- x,xxx
(Alliance) Common Stock x,xxx x,xxx x,xxx $x,xxx x,xxx
(Alliance) Global x,xxx x,xxx x,xxx -- x,xxx
(Alliance) International x,xxx -- -- -- x,xxx
(Alliance) Aggressive Stock x,xxx x,xxx x,xxx x,xxx x,xxx
(Alliance) Small Cap Growth x.xxx x.xxx x.xxx x.xxx x.xxx
(Alliance) Equity Index x.xxx x.xxx x.xxx x.xxx x.xxx
FIXED INCOME SERIES: [TO BE INSERTED BY AMENDMENT]
(Alliance) Money Market x,xxx x,xxx x,xxx x,xxx x,xxx
(Alliance) Intermediate Govt.
Securities x,xxx x,xxx x,xxx -- x,xxx
EQ TRUST***
- ------------------------------------
T. Rowe Price Int'l Stock x,xxx -- -- -- x,xxx
T. Rowe Price Equity Income x,xxx -- -- -- x,xxx
EQ/Putnam Growth & Income Value x,xxx -- -- -- x,xxx
EQ/Putnam Int'l Equity x,xxx -- -- -- x,xxx
EQ/Putnam Investors Growth x,xxx -- -- -- x,xxx
EQ/Putnam Balanced x,xxx -- -- -- x,xxx
MFS Research x,xxx -- -- -- x,xxx
MFS Emerging Growth Companies x,xxx -- -- -- x,xxx
Morgan Stanley Emerging Markets
Equity x,xxx -- -- -- x,xxx
Warburg Pincus Small Company Value x,xxx -- -- -- x,xxx
Merrill Lynch Global Allocation x,xxx -- -- -- x,xxx
Merrill Lynch Basic Value x,xxx -- -- -- x,xxx
</TABLE>
- ------------
* The tables reflect charges under a Certificate with the 0.45% combined
GMDB/GMIB charge.
** The "Since Inception" dates for the Portfolios of HR Trust are as
follows: (Alliance) Conservative Investors (October 2, 1989);
(Alliance) Growth Investors (October 2, 1989); (Alliance) Growth &
Income (October 1, 1993); (Alliance) Common Stock (January 13, 1976);
Global (August 27, 1987); (Alliance) International (April 3, 1995);
(Alliance) Aggressive Stock (January 27, 1986); (Alliance) Small Cap
Growth ( ); (Alliance) Equity Index ( ); (Alliance) Money
Market (July 13, 1981); and (Alliance) Intermediate Govt. Securities
(April 1, 1991).
*** The "Since Inception" date for the Portfolios of EQ Trust is . The
publicly available fund performance data reflected in the tables for EQ
Trust Portfolios are based on the actual performance of mutual funds
comparable to the Portfolios and do not reflect performance of the
Portfolios themselves.
17
<PAGE>
RATE OF RETURN DATA FOR INVESTMENT FUNDS
The following tables (which reflect the second calculation method described
above) provide you with information on rates of return on an annualized,
cumulative and year-by-year basis.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of
return reflect performance over a stated period of time. Annualized rates of
return represent the annual rate of growth that would have produced the same
cumulative return, if performance had been constant over the entire period.
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. Nor do they reflect other charges such as the mortality
and expense risks charge and the administration charge or any withdrawal
charge under the Certificates. Comparisons with these benchmarks, therefore,
are of limited use. We include them because they are widely known and may
help you to understand the universe of securities from which each Portfolio
is likely to select its holdings. Benchmark data reflect the reinvestment of
dividend income.
PORTFOLIO INCEPTION DATES AND COMPARATIVE BENCHMARKS:
Asset Allocation Series:
(ALLIANCE) CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
(ALLIANCE) GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate
Bond Index and 70% Standard & Poor's 500 Index.
Equity Series:
(ALLIANCE) GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index
and 25% Value Line Convertible Index.
(ALLIANCE) COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index.
(ALLIANCE) GLOBAL: August 27, 1987; Morgan Stanley Capital International
World Index.
(ALLIANCE) INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International
Europe, Australia, Far East Index.
(ALLIANCE) AGGRESSIVE STOCK: January 27, 1986; 50% Standard & Poor's Mid-Cap
Total Return Index and 50% Russell 2000 Small Stock Index.
(ALLIANCE) SMALL CAP GROWTH: [to be inserted by amendment]
(ALLIANCE) EQUITY INDEX: [to be inserted by amendment]
Fixed Income Series:
(ALLIANCE) MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill
Index.
(ALLIANCE) INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman
Intermediate Government Bond Index.
T. ROWE PRICE INT'L STOCK: [to be inserted by amendment]
T. ROWE PRICE EQUITY INCOME: [to be inserted by amendment]
EQ/PUTNAM INT'L EQUITY: [to be inserted by amendment]
EQ/PUTNAM INVESTORS GROWTH & INCOME VALUE: [to be inserted by amendment]
EQ/PUTNAM BALANCED: [to be inserted by amendment]
MFS RESEARCH: [to be inserted by amendment]
MFS EMERGING GROWTH COMPANIES: [to be inserted by amendment]
MORGAN STANLEY EMERGING MARKETS: [to be inserted by amendment]
WARBURG PINCUS SMALL COMPANY VALUE: [to be inserted by amendment]
MERRILL LYNCH GLOBAL ALLOCATION: [to be inserted by amendment]
MERRILL LYNCH BASIC VALUE: [to be inserted by amendment]
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
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 Rollover IRA performance relative to other variable
annuity products.
18
<PAGE>
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% -- -- xx.xx%
Lipper Income xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(ALLIANCE) GROWTH INVESTORS xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Flexible Portfolio xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
EQUITY SERIES: [TO BE INSERTED BY AMENDMENT]
(ALLIANCE) GROWTH & INCOME xx.xx xx.xx -- -- -- xx.xx
Lipper Growth & Income xx.xx xx.xx -- -- -- xx.xx
Benchmark xx.xx xx.xx -- -- -- xx.xx
(ALLIANCE) COMMON STOCK xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Growth xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Global xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(ALLIANCE) INTERNATIONAL xx.xx -- -- -- -- xx.xx
Lipper International xx.xx -- -- -- -- xx.xx
Benchmark xx.xx -- -- -- -- xx.xx
(ALLIANCE) AGGRESSIVE STOCK xx.xx xx.xx xx.xx xx.xx -- xx.xx
Lipper Small Company Growth xx.xx xx.xx xx.xx xx.xx -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx -- xx.xx
(ALLIANCE) SMALL CAP GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Standard & Poor's 500
Index xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(ALLIANCE) MONEY MARKET xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Money Market xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERMEDIATE
GOVERNMENT SECURITIES xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Gen. U.S. Government xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
T. ROWE PRICE INT'L STOCK xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE EQUITY INCOME xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
19
<PAGE>
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM GROWTH & INCOME
VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INT'L EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INVESTORS GROWTH xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM BALANCED xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS RESEARCH xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS EMERGING GROWTH
COMPANIES xx.xx% -- -- -- -- xx.xx%
Benchmark xx.xx xx.xx% xx.xx% xx.xx% xx.xx% xx.xx
MORGAN STANLEY EMERGING
MARKETS EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
[To be inserted by amendment]
WARBURG PINCUS SMALL COMPANY
VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH GLOBAL
ALLOCATION xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH BASIC VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
[FN]
- ------------
* See footnotes on next page.
20
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES: [To be inserted by amendment]
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% -- -- xx.xx%
Lipper Income xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(ALLIANCE) GROWTH INVESTORS xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Flexible Portfolio xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
EQUITY SERIES:
(ALLIANCE) GROWTH & INCOME xx.xx xx.xx -- -- -- xx.xx
Lipper Growth & Income xx.xx xx.xx -- -- -- xx.xx
Benchmark xx.xx xx.xx -- -- -- xx.xx
(ALLIANCE) COMMON STOCK xx.xx xx.xx xx.xx xx.xx% xx.xx% xx.xx
Lipper Growth xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Global xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(ALLIANCE) INTERNATIONAL xx.xx -- -- -- -- xx.xx
Lipper International xx.xx -- -- -- -- xx.xx
Benchmark xx.xx -- -- -- -- xx.xx
(ALLIANCE) AGGRESSIVE STOCK xx.xx xx.xx xx.xx xx.xx -- xx.xx
Lipper Small Company Growth xx.xx xx.xx xx.xx xx.xx -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx -- xx.xx
(ALLIANCE) SMALL CAP GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Standard & Poor's 500
Index xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES: [TO BE INSERTED BY AMENDMENT]
(ALLIANCE) MONEY MARKET xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Money Market xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERMEDIATE
GOVERNMENT SECURITIES xx.xx xx.xx -- -- -- xx.xx
Lipper Gen. U.S. Government xx.xx xx.xx -- -- -- xx.xx
Benchmark xx.xx xx.xx -- -- -- xx.xx
T. ROWE PRICE INT'L STOCK xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE EQUITY INCOME xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM GROWTH & INCOME VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INT'L EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
21
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM INVESTORS GROWTH xx.xx% -- -- -- -- xx.xx%
Benchmark xx.xx xx.xx% xx.xx% xx.xx% xx.xx% xx.xx
EQ/PUTNAM BALANCED xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS RESEARCH xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS EMERGING GROWTH
COMPANIES xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MORGAN STANLEY EMERGING
MARKETS EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
WARBURG PINCUS SMALL COMPANY
VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH GLOBAL
ALLOCATION xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH BASIC VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
[FN]
- ------------
* See footnotes below.
22
<PAGE>
YEAR-BY-YEAR RATES OF RETURN*
<TABLE>
<CAPTION>
1984 1985 1986 1987 1988 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx%
(ALLIANCE) GROWTH
INVESTORS xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQUITY SERIES:
(ALLIANCE) GROWTH &
INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) COMMON
STOCK** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERNATIONAL xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) AGGRESSIVE
STOCK xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) SMALL CAP
GROWTH x.xx x.xx x.xx x.xx x.xx x.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(ALLIANCE) MONEY
MARKET** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERMEDIATE
GOVERNMENT
SECURITIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE INT'L
STOCK xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE EQUITY
INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM GROWTH &
INCOME VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INT'L EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INVESTORS
GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM BALANCED xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS RESEARCH [TO BE INSERTED BY AMENDMENT]
MFS EMERGING GROWTH
COMPANIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MORGAN STANLEY EMERGING
MARKETS EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
WARBURG PINCUS SMALL
COMPANY VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH GLOBAL
ALLOCATION xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH BASIC
VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx%
(ALLIANCE) GROWTH
INVESTORS xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQUITY SERIES:
(ALLIANCE) GROWTH &
INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) COMMON
STOCK** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERNATIONAL xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) AGGRESSIVE
STOCK xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) SMALL CAP
GROWTH x.xx x.xx x.xx x.xx x.xx x.xx x.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(ALLIANCE) MONEY
MARKET** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERMEDIATE
GOVERNMENT
SECURITIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE INT'L
STOCK xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE EQUITY
INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM GROWTH &
INCOME VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INT'L EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INVESTORS
GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM BALANCED xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS RESEARCH
MFS EMERGING GROWTH
COMPANIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MORGAN STANLEY EMERGING
MARKETS EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
WARBURG PINCUS SMALL
COMPANY VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH GLOBAL
ALLOCATION xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH BASIC
VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
- ------------
* Returns do not reflect the withdrawal charge, the combined GMDB/GMIB charge and any charge for tax such
as premium taxes.
** Prior to 1984 the Year-by-Year Rates of Return were: 1976 1977 1978 1979 1980 1981 1982 1983
---- ---- ---- ---- ---- ---- ---- ----
COMMON STOCK xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx%
MONEY MARKET xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
23
<PAGE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may
describe general economic and market conditions affecting the Separate
Account and each respective trust and may compare the performance of the
Investment Funds with (1) that of other insurance company separate accounts
or mutual funds included in the rankings prepared by Lipper Analytical
Services, Inc., Morningstar, Inc., VARDS or similar investment services that
monitor the performance of insurance company separate accounts or mutual
funds, (2) other appropriate indices of investment securities and averages
for peer universes of funds which are shown under "Benchmarks" and "Portfolio
Inception Dates and Comparative Benchmarks" in this Part 2, or (3) data
developed by us derived from such indices or averages. The Morningstar
Variable Annuity/Life Report consists of nearly 700 variable life and annuity
funds, all of which report their data net of investment management fees,
direct operating expenses and separate account charges. VARDS is a monthly
reporting service that monitors approximately 760 variable life and variable
annuity funds on performance and account information. Advertisements or other
communications furnished to present or prospective Certificate Owners may
also include evaluations of an Investment Fund or Portfolio by financial
publications that are nationally recognized such as Barron's, Morningstar's
Variable Annuity Sourcebook, Business Week, Chicago Tribune, Forbes, Fortune,
Institutional Investor, Investment Adviser, Investment Dealer's Digest,
Investment Management Weekly, Los Angeles Times, Money, Money Management
Letter, Kiplinger's Personal Finance, Financial Planning, National
Underwriter, Pension & Investments, USA Today, Investor's Daily, The New York
Times, and The Wall Street Journal.
MONEY MARKET FUND AND INTERMEDIATE GOVERNMENT SECURITIES FUND YIELD
INFORMATION
The current yield and effective yield of the Money Market Fund and
Intermediate Government Securities Fund may appear in reports and promotional
material to current or prospective Certificate Owners.
Money Market Fund
Current yield for the Money Market Fund 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). "Effective yield" is calculated in a manner
similar to that used to calculate current yield, 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. Money Market Fund yields and effective yields assume
the deduction of all Certificate charges and expenses other than the
withdrawal charge, combined GMDB/GMIB charge and any charge for tax such as
premium tax. See "Part 5: Money Market Fund and Intermediate Government
Securities Fund Yield Information" in the SAI.
Intermediate Government Securities Fund
Current yield for the Intermediate Government Securities Fund 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 30-day
result would occur each month for 12 months). "Effective yield" is calculated
in a manner similar to that used to calculate current yield, but when
annualized, any income earned by the investment is assumed to be reinvested.
The "effective yield" will be higher than the "current yield" because any
earnings are compounded monthly.
Intermediate Government Securities Fund yields and effective yields assume
the deduction of all Certificate charges and expenses other than the
withdrawal charge, combined GMDB/GMIB charge and any charge for tax such as
premium tax. See "Part 5: Money Market Fund and Intermediate Government
Securities Fund Yield Information" in the SAI.
24
<PAGE>
PART 3: THE GUARANTEED PERIOD ACCOUNT
GUARANTEE PERIODS
Each amount allocated to a Guarantee Period and held to the Period's
Expiration Date accumulates interest at a Guaranteed Rate. The Guaranteed
Rate for each allocation is the annual interest rate applicable to new
allocations to that Guarantee Period, which was in effect on the Transaction
Date for the allocation. We may establish different Guaranteed Rates under
different classes of Certificates. We use the term GUARANTEED PERIOD AMOUNT
to refer to the amount allocated to and accumulated in each Guarantee Period.
The Guaranteed Period Amount is reduced or increased by any market value
adjustment as a result of withdrawals, transfers or charges (see below).
Guarantee Periods may also be referred to as GIROs.
Your Guaranteed Period Account contains the Guarantee Periods to which you
have allocated Annuity Account Value. On the Expiration Date of a Guarantee
Period, its Guaranteed Period Amount and its value in the Guaranteed Period
Account are equal. We call the Guaranteed Period Amount on an Expiration Date
the Guarantee Period's Maturity Value. We report the Annuity Account Value in
your Guaranteed Period Account to reflect any market value adjustment that
would apply if all Guaranteed Period Amounts were withdrawn as of the
calculation date. The Annuity Account Value in the Guaranteed Period Account
with respect to the Guarantee Periods on any Business Day, therefore, will be
the sum of the present value of the Maturity Value in each Guarantee Period,
using the Guaranteed Rate in effect for new allocations to such Guarantee
Period on such date.
Guarantee Periods and Expiration Dates
We currently offer Guarantee Periods ending on February 15th for each of the
maturity years 1998 through 2007.
Not all of these Guarantee Periods will be available for ages 76 and above.
See "Allocation of Contributions" in Part 4. Also, the Guarantee Periods may
not be available for investment in all states. As Guarantee Periods expire we
expect to add maturity years so that generally 10 are available at any time.
Under the IRA Assured Payment Option and IRA APO Plus, in addition to the
Guarantee Periods above, Guarantee Periods ending on February 15th for each
of the maturity years 2008 through 2012 are also available.
Under the Rollover IRA, we will not accept allocations to a Guarantee Period
if, on the Transaction Date:
o Such Transaction Date and the Expiration Date for such Guarantee Period
fall within the same calendar year.
o The Guaranteed Rate is 3%.
o The Guarantee Period has an Expiration Date beyond the February 15th
immediately following the Annuity Commencement Date.
Guaranteed Rates and Price Per $100 of Maturity Value
Because the Maturity Value of a contribution allocated to a Guarantee Period
can be determined at the time it is made, you can determine the amount
required to be allocated to a Guarantee Period in order to produce a target
Maturity Value (assuming no transfers or withdrawals are made and no charges
are allocated to the Guarantee Period). The required amount is the present
value of that Maturity Value at the Guaranteed Rate on the Transaction Date
for the contribution, which may also be expressed as the price per $100 of
Maturity Value on such Transaction Date.
Guaranteed Rates for new allocations as of April , 1997 and the related
price per $100 of Maturity Value for each currently available Guarantee
Period were as follows:
<TABLE>
<CAPTION>
GUARANTEE
PERIODS WITH GUARANTEED
EXPIRATION DATE RATE AS OF PRICE
FEBRUARY 15TH OF APRIL , PER $100 OF
MATURITY YEAR 1997 MATURITY VALUE
- -------------------- -------------- ------------------
<S> <C> <C>
1998 x.xx% $xx.xx
1999 x.xx xx.xx
2000 x.xx xx.xx
2001 x.xx xx.xx
2002 x.xx xx.xx
2003 x.xx xx.xx
2004 x.xx xx.xx
2005 x.xx xx.xx
2006 x.xx xx.xx
2007 x.xx xx.xx
</TABLE>
Available under the IRA Assured Payment Option and IRA APO Plus
<TABLE>
<CAPTION>
<S> <C> <C>
2008 x.xx% $xx.xx
2009 x.xx xx.xx
2010 x.xx xx.xx
2011 x.xx xx.xx
2012 x.xx xx.xx
</TABLE>
25
<PAGE>
Allocation Among Guarantee Periods
The same approach as described above may also be used to determine the amount
which you would need to allocate to each Guarantee Period in order to create
a series of constant Maturity Values for two or more years.
For example, if you wish to have $100 mature on February 15th of each of
years 1998 through 2002, then according to the above table the lump sum
contribution you would have to make as of April , 1997 would be $ .
(i.e., the sum of the price per $100 of Maturity Value for each maturity year
from 1998 through 2002).
The above table is provided to illustrate the use of present value
calculations. It does not take into account the potential for charges to be
deducted or withdrawals or transfers from Guarantee Periods. Actual
calculations will also be based on Guaranteed Rates on each actual
Transaction Date, which may differ.
Options at Expiration Date
Under the Rollover IRA, we will notify you on or before December 31st prior
to the Expiration Date of each Guarantee Period in which you have any
Guaranteed Period Amount. You may elect one of the following options to be
effective at the Expiration Date, subject to the restrictions set forth on
the prior page and under "Allocation of Contributions" in Part 4:
(a) to transfer the Maturity Value into any Guarantee Period we are then
offering, or into any of our Investment Funds; or
(b) to withdraw the Maturity Value (subject to any withdrawal charges
which may apply).
If we have not received your election as of the Expiration Date, the Maturity
Value in the expired Guarantee Period will be transferred into the Guarantee
Period with the earliest Expiration Date.
MARKET VALUE ADJUSTMENT FOR TRANSFERS, WITHDRAWALS OR SURRENDER PRIOR TO THE
EXPIRATION DATE
Any withdrawal (including transfers, surrender and deductions) from a
Guarantee Period prior to its Expiration Date will cause any remaining
Guaranteed Period Amount for that Guarantee Period to be increased or
decreased by a market value adjustment. The amount of the adjustment will
depend on two factors: (a) the difference between the Guaranteed Rate
applicable to the amount being withdrawn and the Guaranteed Rate on the
Transaction Date for new allocations to a Guarantee Period with the same
Expiration Date, and (b) the length of time remaining until the Expiration
Date. In general, if interest rates have risen between the time when an
amount was originally allocated to a Guarantee Period and the time it is
withdrawn, the market value adjustment will be negative, and vice versa; and
the longer the period of time remaining until the Expiration Date, the
greater the impact of the interest rate difference. Therefore, it is possible
that a significant rise in interest rates could result in a substantial
reduction in your Annuity Account Value in the Guaranteed Period Account
related to longer term Guarantee Periods.
The market value adjustment (positive or negative) resulting from a
withdrawal of all funds from a Guarantee Period will be determined for each
contribution allocated to that Period as follows:
(1) We determine the present value of the Maturity Value on the Transaction
Date as follows:
(a) We determine the Guaranteed Period Amount that would be payable on
the Expiration Date, using the applicable Guaranteed Rate.
(b) We determine the period remaining in your Guarantee Period (based on
the Transaction Date) and convert it to fractional years based on a
365 day year. For example three years and 12 days becomes 3.0329.
(c) We determine the current Guaranteed Rate which applies on the
Transaction Date to new allocations to the same Guarantee Period.
(d) We determine the present value of the Guaranteed Period Amount
payable at the Expiration Date, using the period determined in (b)
and the rate determined in (c).
(2) We determine the Guaranteed Period 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 Guarantee Period, which may be
positive or negative.
The market value adjustment (positive or negative) resulting from a
withdrawal (including any withdrawal charges) of a portion of the amount in a
Guarantee Period will be a percentage of the market value adjustment that
would be applicable upon a withdrawal of all funds from a Guarantee Period.
This percentage is determined by (i) dividing the amount of the withdrawal or
transfer from the Guarantee Period by (ii) the Annuity Account Value in such
Guarantee Period prior to the withdrawal or transfer. See Appendix I for an
example.
26
<PAGE>
The Guaranteed Rate for new allocations to a Guarantee Period is the rate we
have in effect for this purpose even if new allocations to that Guarantee
Period would not be accepted at the time. This rate will not be less than 3%.
If we do not have a Guaranteed Rate in effect for a Guarantee Period to which
the "current Guaranteed Rate" in (1)(c) would apply, we will use the rate at
the next closest Expiration Date. If we are no longer offering new Guarantee
Periods, the "current Guaranteed Rate" will be determined in accordance with
our procedures then in effect. For purposes of calculating the market value
adjustment only, we reserve the right to add up to 0.25% to the current rate
in (1)(c) above.
MODAL PAYMENT PORTION
Under the IRA Assured Payment Option and IRA APO Plus, a portion of your
contributions or Annuity Account Value is allocated to the Modal Payment
Portion of the Guaranteed Period Account for payments to be made prior to the
Expiration Date of the earliest Guarantee Period we then offer. Such amount
will accumulate interest beginning on the Transaction Date at an interest
rate we set. Interest will be credited daily. Such rate will not be less than
3%.
Upon the expiration of a Guarantee Period, the Guaranteed Period Amount will
be held in the Modal Payment Portion of the Guaranteed Period Account.
Amounts from an expired Guarantee Period held in the Modal Payment Portion of
the Guaranteed Period Account will be credited with interest at a rate equal
to the Guaranteed Rate applicable to the expired Guarantee Period, beginning
on the Expiration Date of such Guarantee Period.
There is no market value adjustment with respect to amounts held in the Modal
Payment Portion of the Guaranteed Period Account.
INVESTMENTS
Amounts allocated to Guarantee Periods or the Modal Payment Portion of the
Guaranteed Period Account will be held in a "nonunitized" separate account
established by Equitable Life under the laws of New York. This separate
account provides an additional measure of assurance that full payment of
amounts due under the Guarantee Periods and the Modal Payment Portion of the
Guaranteed Period Account will be made. Under the New York Insurance Law, the
portion of the separate account's assets equal to the reserves and other
contract liabilities relating to the Certificates are not chargeable with
liabilities arising out of any other business we may conduct.
Investments purchased with amounts allocated to the Guaranteed Period Account
are the property of Equitable Life. Any favorable investment performance on
the assets held in the separate account accrues solely to Equitable Life's
benefit. Certificate Owners do not participate in the performance of the
assets held in this separate account. Equitable Life may, subject to
applicable state law, transfer all assets allocated to the separate account
to its general account. Regardless of whether assets supporting Guaranteed
Period Accounts are held in a separate account or our general account, all
benefits relating to the Annuity Account Value in the Guaranteed Period
Account are guaranteed by Equitable Life.
Equitable Life has no specific formula for establishing the Guaranteed Rates
for the Guarantee Periods. Equitable Life expects the rates to be influenced
by, but not necessarily correspond to, among other things, the yields on the
fixed income securities to be acquired with amounts that are allocated to the
Guarantee Periods at the time that the Guaranteed Rates are established. Our
current plans are to invest such amounts in fixed income obligations,
including corporate bonds, mortgage backed and asset backed securities and
government and agency issues having durations in the aggregate consistent
with those of the Guarantee Periods.
Although the foregoing generally describes Equitable Life's plans for
investing the assets supporting Equitable Life's obligations under the fixed
portion of the Certificates, Equitable Life is not obligated to invest those
assets according to any particular plan except as may be required by state
insurance laws, nor will the Guaranteed Rates Equitable Life establishes be
determined by the performance of the nonunitized separate account.
General Account
Our general account supports all of our policy and contract guarantees,
including those applicable to the Guaranteed Period Account, as well as our
general obligations. Amounts applied under the Life Contingent Annuity become
part of the general account. See "IRA Assured Payment Option," "Life
Contingent Annuity," in Part 5.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
applicable exemptions and exclusionary provisions, interests in the general
account have not been registered under the Securities Act of 1933, as amended
(1933 Act), nor is the general account an investment company under
27
<PAGE>
the 1940 Act. Accordingly, neither the general account nor the Life
Contingent Annuity is subject to regulation under the 1933 Act or the 1940
Act. However, the market value adjustment interests under the Certificates
are registered under the 1933 Act.
We have been advised that the staff of the SEC has not made a review of the
disclosure that is included in the prospectus for your information that
relates to the general account (other than market value adjustment interests)
and the Life Contingent Annuity. The disclosure, however, may be subject to
certain generally applicable provisions of the Federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
28
<PAGE>
PART 4: PROVISIONS OF THE CERTIFICATES AND SERVICES
WE PROVIDE
THE PROVISIONS DISCUSSED IN THIS PART 4 APPLY WHEN YOUR CERTIFICATE IS
OPERATING PRIMARILY TO ACCUMULATE ANNUITY ACCOUNT VALUE. DIFFERENT RULES MAY
APPLY WHEN YOU ELECT THE IRA ASSURED PAYMENT OPTION OR IRA APO PLUS IN THE
APPLICATION OR AS LATER ELECTED AS A DISTRIBUTION OPTION UNDER YOUR ROLLOVER
IRA AS DISCUSSED IN PART 5. THE PROVISIONS OF YOUR CERTIFICATE MAY BE
RESTRICTED BY APPLICABLE LAWS OR REGULATIONS.
WHAT IS THE ROLLOVER IRA?
The Rollover Individual Retirement Annuity (IRA) is designed to provide for
retirement income through the investment of rollover contributions, direct
transfers from other individual retirement arrangements and additional IRA
contributions. The Rollover IRA features a combination of Investment Options,
consisting of Investment Funds providing variable returns and Guarantee
Periods providing guaranteed interest when held to maturity.
AVAILABILITY OF THE CERTIFICATES
The Rollover IRA Certificates are available for issue ages 20 through 78.
These Certificates may not be available in all states. These Certificates are
not available in Puerto Rico.
CONTRIBUTIONS UNDER THE CERTIFICATES
Your initial contribution must be at least $5,000. We will only accept
initial contributions which are either rollover contributions under Sections
402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of the Code, or direct
custodian-to-custodian transfers from other individual retirement
arrangements. See "Part 8: Tax Aspects of the Certificates."
You may make subsequent contributions in an amount of at least $1,000 at any
time until you attain age 79. Subsequent contributions may be "regular" IRA
contributions (limited to a maximum of $2,000 a year), rollover contributions
as described above, or direct transfers as described above. Rollover
contributions and direct transfers are not subject to the $2,000 annual
limit.
We may refuse to accept any contribution if the sum of all contributions
under all accumulation Certificates with the same Annuitant would then total
more than $1,500,000. We reserve the right to limit aggregate contributions
made after the first Contract Year to 150% of first year contributions. We
may also refuse to accept any contribution if the sum of all contributions
under all Equitable Life annuity accumulation certificates/contracts you own
would then total more than $2,500,000.
"Regular" IRA contributions may no longer be made for the taxable year in
which you attain age 70 1/2 and thereafter. Rollover and direct transfer
contributions may be made until you attain age 79. However, any amount
contributed after you attain 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. See "Part 8: Tax Aspects of the Certificates." For the
consequences of making a "regular" IRA contribution to your Certificate, also
see Part 8.
Contributions are credited as of the Transaction Date.
METHODS OF PAYMENT
Except as indicated below, all contributions must be made by check. All
contributions made by check must be drawn on a bank or credit union in the
U.S., in U.S. dollars and made payable to Equitable Life. All checks are
accepted subject to collection. All contributions should be sent to Equitable
Life at our Processing Office address designated for contributions.
Wire Transmittals
We will accept, by agreement with broker-dealers who use wire transmittals,
transmittal of initial contributions by wire order from the broker-dealer to
the Processing Office. Such transmittals must be accompanied by essential
information we require to allocate the contribution.
Contributions accepted by wire order will be invested at the value next
determined following receipt for contributions allocated to the Investment
Funds. Contributions allocated to the Guaranteed Period Account will receive
the Guaranteed Rate(s) in effect for the applicable Guarantee Period(s) on
the date contributions are received. Wire orders not accompanied by complete
information, may be retained for a period not exceeding five Business Days
while an attempt is made to obtain the required information. If the required
information cannot be obtained within those five Business Days, the Pro-
29
<PAGE>
cessing Office will inform the broker-dealer, on behalf of the applicant, of
the reasons for the delay and return the contribution immediately to the
applicant, unless the applicant specifically consents to our retaining the
contribution until the required information is received by the Processing
Office.
Notwithstanding the acceptance by us of the wire order and the essential
information, however, a Certificate will not be issued until the receipt and
acceptance of a properly completed application. During the time from receipt
of the initial contribution until a signed application is received from the
Certificate Owner, no other financial transactions may be requested.
If an application is not received within ten days of receipt of the initial
contribution via wire order, or if an incomplete application is received and
cannot be completed within ten days of receipt of the initial contribution,
the amount of the initial contribution will be returned to the applicant with
immediate notification to the broker-dealer. In no event will less than the
full amount of the initial contribution be returned to the applicant.
After your Certificate has been issued, subsequent contributions may be
transmitted by wire.
ALLOCATION OF CONTRIBUTIONS
You have two options from which to choose for allocation of your
contributions: Self-Directed Allocation and Principal Assurance.
Self-Directed Allocation
You design your own investment program by allocating your contributions among
the Investment Options in any way you choose. Your contributions may be
allocated to one or up to all of the available Investment Options at any
time. We allocate contributions among the Investment Options according to
your allocation percentages. Allocations must be in whole percentages.
Allocation percentages can be changed at any time by writing to our
Processing Office, or by telephone. The change will be effective on the
Transaction Date and will remain in effect for future contributions unless
another change is requested. Allocation of any contribution to the Guaranteed
Period Account is subject to the following restrictions:
o No more than 60% of any contribution may be allocated to the
Guaranteed Period Account.
o At ages 76 and above, allocations may be made only to Guarantee
Periods with maturities of five years or less; however, in no event
may allocations be made to Guarantee Periods with maturities beyond
the February 15th immediately following the Annuity Commencement
Date.
Rebalancing--Rebalancing provides a convenient way for you to periodically
rebalance your Annuity Account Value to pre-selected percentages without
having to provide transfer instructions each time. You must have at least
$5,000 of Annuity Account Value at the time you elect this program. You elect
the rebalancing program by submitting your request in a form satisfactory to
us.
Under this program, your Annuity Account Value is rebalanced quarterly,
semi-annually, or annually to percentages you select and among Investment
Options you select. While this program is in effect you may still make other
transfer requests. However, if you make a transfer request you must provide
new rebalancing percentages, otherwise the rebalancing program will
terminate. You may change your rebalancing allocation percentages at any
time.
Rebalancing may not be elected if the dollar cost averaging or the systematic
withdrawal option is in effect. If Guarantee Periods are included,
rebalancing may result in a market value adjustment.
You may cancel this program by submitting a request in a form satisfactory to
us.
Principal Assurance
This option (available at issue ages 20 through 75) is designed to assure
that your Maturity Value in a specified Guarantee Period equals your initial
contribution while at the same time allowing you to invest in the Investment
Funds. The maturity year you select for such specified Guarantee Period
generally may not be later than 10 years nor earlier than seven years. Before
you select a year that would extend beyond the year in which you will attain
age 70 1/2 you should consider your ability to take minimum distributions
from other IRA funds that you may have or from the Investment Funds to the
extent possible. See "Required Minimum Distributions" in Part 8.
In order to accomplish this strategy, we will allocate a portion (equal to
the present value) of your initial contribution to a Guarantee Period based
on the year you select. See "Guaranteed Rates and Price Per $100 of Maturity
Value" in Part 3. You may allocate the balance of your contribution to the
Investment Funds in any way you choose. Such allocations to the Investment
Funds must be in whole percentages.
Principal Assurance may only be elected at issue of your Certificate and
assumes no withdrawals or transfers of the amount allocated to the specified
Guarantee Period.
30
<PAGE>
Subsequent contributions must be allocated under "Self-Directed Allocation"
described above.
Allocations to the Investment Funds
A contribution allocated to an Investment Fund purchases Accumulation Units
in that Investment Fund based on the Accumulation Unit Value for that
Investment Fund computed on the Transaction Date.
Allocations to the Guaranteed Period Account
Contributions allocated to the Guaranteed Period Account will have the
Guaranteed Rate for the specified Guarantee Period offered on the Transaction
Date.
FREE LOOK PERIOD
You have the right to examine the Rollover IRA Certificate for a period of 10
days after you receive it, and to return it to us for a refund. You cancel it
by sending it to our Processing Office. The free look is extended if your
state requires a refund period of longer than 10 days.
Your refund will equal the Annuity Account Value reflecting any investment
gain or loss, and any positive or negative market value adjustment, through
the date we receive your Certificate at our Processing Office. Some states or
Federal income tax regulations may require that we calculate the refund
differently.
If the IRA Assured Payment Option or IRA APO Plus is elected in the
application for the Certificate, your refund will include any amount applied
under the Life Contingent Annuity. See "IRA Assured Payment Option," "Life
Contingent Annuity" in Part 5.
We follow these same procedures if you change your mind before you receive
your Certificate but after a contribution has been made. See "Part 8: Tax
Aspects of the Certificates" for possible consequences of canceling your
Certificate during the free look period.
If you cancel your Certificate during the free look period, we may require
that you wait six months before you may apply for a Certificate with us
again.
ANNUITY ACCOUNT VALUE
Your Annuity Account Value is the sum of the amounts in the Investment
Options.
Annuity Account Value in Investment Funds
The Annuity Account Value in an Investment Fund on any Business Day is equal
to the number of Accumulation Units in that Investment Fund times the
Accumulation Unit Value for the Investment Fund for that date. The number of
Accumulation Units in an Investment Fund at any time is equal to the sum of
Accumulation Units purchased by contributions and transfers less the sum of
Accumulation Units redeemed for withdrawals, transfers or deductions for
charges.
The number of Accumulation Units purchased or sold in any Investment Fund
equals the dollar amount of the transaction divided by the Accumulation Unit
Value for that Investment Fund for the applicable Transaction Date.
The number of Accumulation Units will not vary because of any later change in
the Accumulation Unit Value. The Accumulation Unit Value varies with the
investment performance of the correspond-ing Portfolios of each respective
trust, which in turn reflects the investment income and realized and
unrealized capital gains and losses of the Portfolios, as well as each
respective trust's fees and expenses. The Accumulation Unit Value is also
stated after deduction of the Separate Account asset charges relating to the
Certificates. A description of the computation of the Accumulation Unit Value
is found in the SAI.
Annuity Account Value in Guaranteed Period
Account
The Annuity Account Value in the Guaranteed Period Account on any Business
Day will be the sum of the present value of the Maturity Value in each
Guarantee Period, using the Guaranteed Rate in effect for new allocations to
such Guarantee Period on such date. (This is equivalent to the Guaranteed
Period Amount increased or decreased by the full market value adjustment.)
The Annuity Account Value, therefore, may be higher or lower than the
contributions (less withdrawals) accumulated at the Guaranteed Rate. At the
Expiration Date the Annuity Account Value in the Guaranteed Period Account
will equal the Maturity Value. While the IRA Assured Payment Option or IRA
APO Plus is in effect, the Annuity Account Value will include any amount in
the Modal Payment Portion of the Guaranteed Period Account. However, amounts
held in the Modal Payment Portion of the Guaranteed Period Account are not
subject to a market value adjustment. See "Part 3: The Guaranteed Period
Account."
<PAGE>
TRANSFERS AMONG INVESTMENT OPTIONS
At any time prior to the Annuity Commencement Date, you may transfer all or
portions of your Annuity Account Value among the Investment Options, subject
to the following restrictions.
31
<PAGE>
o Transfers out of a Guarantee Period other than at the Expiration Date
will result in a market value adjustment. See "Part 3: The Guaranteed
Period Account."
o Transfers to Guarantee Periods are subject to the restrictions set
forth under "Guarantee Periods and Expiration Dates" in Part 3 and
are limited for ages 76 and above. See "Allocation of Contributions"
above.
Transfer requests must be made directly to our Processing Office. Your
request for a transfer should specify your Certificate number, the amounts or
percentages to be transferred and the Investment Options to and from which
the amounts are to be transferred. Your transfer request may be in writing or
by telephone.
For telephone transfer requests, procedures have been established by
Equitable Life that are considered to be reasonable and are designed to
confirm that instructions communicated by telephone are genuine. Such
procedures include requiring certain personal identification information
prior to acting on telephone instructions and providing written confirmation.
In light of the procedures established, Equitable Life will not be liable for
following telephone instructions that it reasonably believes to be genuine.
We may restrict, in our sole discretion, the use of an agent acting under a
power of attorney, such as a market timer, on behalf of more than one
Certificate Owner to effect transfers. Any agreements to use market timing
services to effect transfers are subject to our rules then in effect and must
be on a form satisfactory to us.
A transfer request will be effective on the Transaction Date and the transfer
to or from Investment Funds will be made at the Accumulation Unit Value next
computed after the Transaction Date. All transfers will be confirmed in
writing.
DOLLAR COST AVERAGING
For Certificate Owners who (at issue of the Certificate) want to dollar cost
average their entire initial contribution from the Money Market Fund into the
other Investment Funds over a period of twelve months, we offer a program
under which the charges normally deducted from Investment Funds will not be
deducted. See "Charges Deducted from the Investment Funds" in Part 6. We also
offer dollar cost averaging under the program described below.
If you have at least $5,000 of Annuity Account Value in the Money Market
Fund, you may choose to have a specified dollar amount or percentage of your
Annuity Account Value transferred from the Money Market Fund to other
Investment Funds on a monthly, quarterly or annual basis. This program may be
elected at any time. The main objective of dollar cost averaging is to
attempt to shield your investment from short term price fluctuations. Since
the same dollar amount is transferred to other Investment Funds each month,
more Accumulation Units are purchased in an Investment Fund if the value per
Accumulation Unit is low and fewer Accumulation Units are purchased if the
value per Accumulation Unit is high. Therefore, a lower average value per
Accumulation Unit may be achieved over the long term. This plan of investing
allows you to take advantage of market fluctuations but does not assure a
profit or protect against a loss in declining markets.
The minimum amount that may be transferred on each Transaction Date is $250.
The maximum amount which may be transferred is equal to the Annuity Account
Value in the Money Market Fund at the time the option is elected, divided by
the number of transfers scheduled to be made each Contract Year.
The transfer date will be the same calendar day of the month as the Contract
Date. If, on any transfer date, the Annuity Account Value in the Money Market
Fund is equal to or less than the amount you have elected to have
transferred, the entire amount will be transferred and the dollar cost
averaging option will end. You may change the transfer amount once each
Contract Year, or cancel this option by sending us satisfactory notice to our
Processing Office at least seven calendar days before the next transfer date.
Dollar cost averaging may not be elected while a rebalancing program or the
systematic withdrawal option is in effect.
DEATH BENEFIT
Generally, upon receipt of proof satisfactory to us of your death prior to
the Annuity Commencement Date, we will pay the death benefit to the
beneficiary named in your Certificate. You designate the beneficiary at the
time you apply for the Certificate. While the Certificate is in effect, you
may change your beneficiary by writing to our Processing Office. The change
will be effective on the date the written submission was signed. The death
benefit payable will be determined as of the date we receive such proof of
death and any required instructions as to the method of payment.
The death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
the GMDB defined below; and
32
<PAGE>
(2) the death benefit provided with respect to the Guaranteed Period
Account, which is equal to the Annuity Account Value in the
Guaranteed Period Account or, if greater, the sum of the Guaranteed
Period Amounts in each Guarantee Period, plus any amounts in the
Modal Payment Portion of the Guaranteed Period Account. See "Part
3: The Guaranteed Period Account."
There are two plans available under the Certificates for providing guaranteed
benefits, Plan A and Plan B. Plan A (available for Annuitant issue ages 20
through 75) provides a Combined GMDB/GMIB Benefit. Plan B provides a GMDB
Only Benefit, and has a lower charge. The GMDB and the GMIB are discussed
below.
For Annuitant issue ages 20 through 75, you must elect the Combined GMDB/GMIB
Benefit (Plan A) or the GMDB Only Benefit (Plan B) in the application. Once
elected, the plan may not be changed. For Annuitant issue ages 76 through 78,
for Certificates issued in New York and in states where the GMIB is not
currently available, the GMDB Only Benefit (Plan B) will apply.
For the specific charges, see "Part 6: Deductions and Charges."
GMDB
Your GMDB is the minimum amount payable with respect to the Investment Funds
upon your death.
Applicable to Certificates issued in all states except
New York
6% to Age 80 Benefit--(Applicable to ages 20 through 75). On the Contract
Date, the GMDB is equal to the portion of the initial contribution allocated
to the Investment Funds. Thereafter, the GMDB is credited with interest at 6%
(3% for amounts in the Fixed Income Series) on each Contract Date anniversary
through the Annuitant's age 80 and 0% thereafter, and is adjusted for any
subsequent contributions and transfers into the Investment Funds and
transfers and withdrawals from such Funds.
For ages 76 through 78, the GMDB will continue to grow through age 85.
Applicable to Certificates issued in New York
Annual Ratchet to Age 80--On the Contract Date, the GMDB is equal to the
initial contribution allocated to the Investment Funds. Thereafter, the GMDB
is reset to the Annuity Account Value on a Contract Date anniversary if
higher than the current GMDB, through the Annuitant's age 80. The GMDB is
adjusted for any subsequent contributions and transfers into the Investment
Funds and transfers and withdrawals from such Funds.
See Appendix II for an example of the calculation of the GMDB. Withdrawals
and transfers will reduce your GMDB, see "How Withdrawals and Transfers
Affect Your GMDB and GMIB" below.
How Payment is Made
We will pay the death benefit to the beneficiary in the form of the income
annuity option you have chosen under your Certificate. If no income annuity
option has been chosen at the time of your death, the beneficiary will
receive the death benefit in a lump sum. However, subject to Equitable Life's
rules then in effect and any other applicable requirements under the Code,
the beneficiary may elect to apply the death benefit amount to one or more
income annuity options offered by Equitable Life. See "Income Annuity
Options" in Part 5.
Successor Annuitant
If you elect to have your spouse be both the sole primary beneficiary and the
successor Annuitant/ Certificate Owner, then no death benefit is payable
until your surviving spouse's death.
On the Processing Date following your death, if the successor
Annuitant/Certificate Owner election was elected at issue of the Certificate
and is in effect at your death, the GMDB will be reset at the greater of the
current GMDB and the current Annuity Account Value in the Investment Funds.
In determining whether the GMDB will continue to grow, we will use the age
(as of the Processing Date) of the successor Annuitant/Certificate Owner.
GMIB
GMIB, available under the Combined GMDB/GMIB Benefit (Plan A), may not
currently be available in your state. State availability information may be
obtained from your agent. GMIB is also not available once either the IRA
Assured Payment Option or IRA APO Plus is in effect. If you terminate either
option so that the Certificate operates under Rollover IRA rules, GMIB will
not be available.
GMIB is an optional benefit which provides a minimum amount of guaranteed
lifetime future income with respect to the Investment Funds. It operates
through application of your Annuity Account Value in the Investment Funds
under the IRA Assured Payment Option (discussed in Part 5).
33
<PAGE>
On the Transaction Date that you exercise GMIB, your periodic lifetime income
that will be provided under the IRA Assured Payment Option will be the
greater of (i) your GMIB, and (ii) the amount of income that would be
provided based on your Annuity Account Value in the Investment Funds as of
the Transaction Date and our then current annuity purchase factors.
If you have any Annuity Account Value in the Guaranteed Period Account as of
the Transaction Date that you exercise GMIB, such Annuity Account Value will
also be applied (at current annuity purchase factors) toward providing
payments under the IRA Assured Payment Option. Such Annuity Account Value
will increase the payments provided by GMIB. A market value adjustment may
apply.
Listed below are GMIB amounts per $100,000 of initial contribution, for a
male age 60 (at issue) on Contract Date anniversaries as indicated below,
assuming no subsequent contributions or withdrawals.
<TABLE>
<CAPTION>
GMIB ANNUAL
INCOME PAYABLE
CONTRACT DATE FOR LIFE
ANNIVERSARY 10 YEAR FIXED
AT ELECTION PERIOD
- -------------- --------------
<S> <C>
7 $ 8,992
10 12,160
15 18,358
20 27,856
</TABLE>
Withdrawals and transfers will reduce your GMIB, see "How Withdrawals and
Transfers Affect Your GMDB and GMIB" below.
GMIB may be exercised under the following conditions:
o The IRA Assured Payment Option is elected within 30 days following
the 7th or later Contract Date anniversary. However, it may not be
elected earlier than your age 60, nor later than age 83; except that
for issue ages 20 to 44, it may be elected 15 years after the
Contract Date. If elected prior to age 60, only level payments are
permitted.
o The fixed period you select is as indicated below, based on your age at
the time of election and the type of payments selected:
<TABLE>
<CAPTION>
LEVEL PAYMENTS
- ---------------------------------------------
AGE AT ELECTION FIXED PERIOD
- ----------------------- --------------------
<S> <C>
60 through 75 10 years
76 through 78 85 less your age
79 through 83 7 years
INCREASING PAYMENTS
- ---------------------------------------------
AGE AT ELECTION FIXED PERIOD
- ----------------------- --------------------
60 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
</TABLE>
o Payments start one payment mode after the IRA Assured Payment Option
goes into effect.
Each year on your Contract Date anniversary, if you are eligible to exercise
GMIB, we will send you an eligibility notice illustrating how much income
could be provided under such option on the Contract Date anniversary. You may
then notify us within 30 days following the Contract Date anniversary if you
want to exercise GMIB by submitting the proper form. The income to be
provided under the IRA Assured Payment Option will be determined on the
Transaction Date that we receive your request and, therefore, may differ from
the eligibility notice. It will be based on either the GMIB that was
determined on the Contract Date anniversary or the Annuity Account Value and
our current annuity purchase factors as of such Transaction Date.
GMDB, which relates to the Investment Funds, will no longer be in effect if
you elect the IRA Assured Payment Option. If you subsequently terminate the
IRA Assured Payment Option and have your Certificate operate under the
Rollover IRA rules, then GMDB will go back into effect based on your Annuity
Account Value in the Investment Funds as of the Transaction Date that the
Rollover IRA goes into effect.
You may always apply your Annuity Account Value to any of our life income
annuity options. The income annuity options are discussed in Part 5. These
options differ from the IRA Assured Payment Option and may provide higher or
lower income levels but do not have all the features under the IRA Assured
Payment Option. You may request and illustration from your agent.
Successor Annuitant/Certificate Owner
If the successor Annuitant/Certificate Owner election (discussed above) was
elected at issue of the Certificate and is in effect at your death, GMIB will
continue to be available on Contract Date anniversaries seven and later based
on the Contract Date, provided GMIB is exercised as specified above based on
the age of the successor Annuitant/Certificate Owner.
How Withdrawals and Transfers Affect Your GMDB and GMIB
Under the 6% to Age 80 Benefit and under GMIB, withdrawals or transfers from
the Investment Funds greater than 6% of the Annuity Account Value and any
withdrawal or transfers from the Investment Funds under the Annual Ratchet to
Age 80, will cause a reduction in the GMDB (described above) and GMIB Benefit
Base (described below) on a pro rata basis. This means that if you take a
withdrawal of $10,000 and such withdrawal represents 10% of your Annuity
Account Value as of the Transaction Date, your current GMDB and current GMIB
Benefit Base will be reduced by 10%.
34
<PAGE>
Under the 6% to Age 80 Benefit and under GMIB, withdrawals or transfer from
the Investment Funds of 6% or less will cause a dollar-for-dollar reduction
in the GMDB and GMIB Benefit Base. That means that if you take a withdrawal
of $10,000, which represents less than 6% of your Annuity Account Value as of
the Transaction Date, your current GMDB and current GMIB Benefit Base will be
reduced by $10,000.
GMIB Benefit Base--The GMIB Benefit Base is equal to the portion of the
initial contribution allocated to the Investment Funds. Thereafter, the
GMIB Benefit Base is credited with interest at 6% (3% for amounts in the
Fixed Income Series) on each Contract Date anniversary through age 80,
and 0% thereafter, and is adjusted for any subsequent contributions and
transfers into the Investment Funds and transfers and withdrawals from
such Funds. The GMIB Benefit Base will also be reduced by any withdrawal
charge remaining on the Transaction Date that you exercise GMIB.
Your GMIB Benefit Base is applied to guaranteed minimum annuity purchase
factors to determine the GMIB. The guaranteed minimum annuity purchase
factors are based on (i) interest at 2.5% if GMIB is exercised within 30
days following a Contract Date anniversary in years 7 through 9 and at 3%
if exercised within 30 days following the 10th or later Contract Date
anniversary, and (ii) mortality based on the 1983 Individual Annuity
Mortality Table "a" projected with modified Scale G. The purchase factors
assume that mortality will improve in the future and are more
conservative than the basis underlying current annuity purchase rates.
Your GMIB Benefit Base does not create an Annuity Account Value or a Cash
Value and is used solely for purposes of calculating GMIB.
The timing of your withdrawals and whether they exceed 6% threshold described
above can have a significant impact on your GMDB or GMIB.
Alternate Combined GMDB/GMIB Benefit (Plan A) available for issue ages 20
through 65
In addition to a Combined GMDB/GMIB Benefit where GMDB interest is credited
through age 80 (6% to Age 80 Benefit), there is a lower cost benefit where
GMDB interest is credited through age 70 (6% to Age 70 Benefit). If you wish
to elect this alternate benefit, you must do so in the application; otherwise
the 6% to Age 80 Benefit will apply. Once elected, the benefit may not be
changed.
CASH VALUE
The Cash Value under the Certificate fluctuates daily with the investment
performance of the Investment Funds you have selected and reflects any upward
or downward market value adjustment. See "Part 3: The Guaranteed Period
Account." We do not guarantee any minimum Cash Value except for amounts in a
Guarantee Period held to the Expiration Date. On any date before the Annuity
Commencement Date while the Certificate is in effect, the Cash Value is equal
to the Annuity Account Value less any withdrawal charge. The free corridor
amount will not apply when calculating the withdrawal charge applicable upon
a surrender. See "Part 6: Deductions and Charges."
SURRENDERING THE CERTIFICATES TO
RECEIVE THE CASH VALUE
You may surrender a Certificate to receive the Cash Value at any time while
you are living and before the Annuity Commencement Date.
For a surrender to be effective, we must receive your written request and the
Certificate at our Processing Office. The Cash Value will be determined on
the Transaction Date. All benefits under the Certificate will be terminated
as of that date.
You may receive the Cash Value in a single sum payment or apply it under one
or more of the income annuity options. See "Income Annuity Options" in Part
5. We will usually pay the Cash Value within seven calendar days, but we may
delay payment as described in "When Payments are Made" below.
For the tax consequences of surrenders, see "Part 8: Tax Aspects of the
Certificates."
WHEN PAYMENTS ARE MADE
Under applicable law, application of proceeds from the Investment Funds to a
variable annuity, payment of a death benefit from the Investment Funds,
payment of any portion of the Annuity Account Value (less any applicable
withdrawal charge) from the Investment Funds, and, upon surrender, payment of
the Cash Value from the Investment Funds will be made within seven calendar
days after the Transaction Date. Payments or application of proceeds from the
Investment Funds can be deferred for any period during which (1) the New York
Stock Exchange is closed or trading on it is restricted, (2) sales of
securities or determination of the fair value of an Investment Fund's assets
is not reasonably practicable because of an emergency, or (3) the SEC, by
order, permits us to defer payment in order to protect persons with interest
in the Investment Funds.
35
<PAGE>
We can defer payment of any portion of the Annuity Account Value in the
Guaranteed Period Account for up to six months while you are living. We may
also defer payments for any amount attributable to a contribution made in the
form of a check for a reasonable amount of time (not to exceed 15 days) to
permit the check to clear.
ASSIGNMENT
The Certificates are not assignable or transferable except through surrender
to us. They may not be borrowed against or used as collateral for a loan or
other obligation.
SERVICES WE PROVIDE
O REGULAR REPORTS
o Statement of your Certificate values as of the last day of the
calendar year;
o Three additional reports of your Certificate values each year;
o Annual and semi-annual statements of each trust; and
o Written confirmation of financial transactions.
O TOLL-FREE TELEPHONE SERVICES
o Call 1-800-789-7771 for a recording of daily Accumulation Unit Values
and Guaranteed Rates applicable to the Guarantee Periods. Also call
during our regular business hours to speak to one of our customer
service representatives.
O PROCESSING OFFICE
o FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
Post Office Box 13014
Newark, NJ 07188-0014
o FOR CONTRIBUTIONS SENT BY EXPRESS MAIL:
Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
o FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS,
WITHDRAWALS) SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
o FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS,
WITHDRAWALS) SENT BY EXPRESS MAIL:
Equitable Life
Income Management Group
200 Plaza Drive
Secaucus, NJ 07096
DISTRIBUTION OF THE CERTIFICATES
As the distributor of the Certificates, Equitable Distributors, Inc. (EDI),
an indirect wholly owned subsidiary of Equitable Life, has responsibility for
sales and marketing functions for the Certificates. EDI also serves as the
principal underwriter of the Separate Account under the 1940 Act. EDI is
registered with the SEC as a broker-dealer under the Exchange Act and is a
member of the National Association of Securities Dealers, Inc. EDI's
principal business address is 1290 Avenue of the Americas, New York, New York
10104. EDI was paid a fee of $126,914 for 1995 and $ for 1996 for its
services under its "Distribution Agreement" with Equitable Life and the
Separate Account.
The Certificates will be sold by registered representatives of EDI and its
affiliates, who are also our licensed insurance agents. Broker-dealer sales
compensation for EDI and its affiliates will generally not exceed six percent
of total contributions made under a Certificate. EDI may also receive
compensation and reimbursement for its marketing services under the terms of
its distribution agreement with Equitable Life. Broker-dealers receiving
sales compensation will generally pay a portion thereof to their registered
representatives as commissions related to sales of the Certificates. The
offering of the Certificates is intended to be continuous.
36
<PAGE>
PART 5: DISTRIBUTION METHODS UNDER THE CERTIFICATES
THE PROVISIONS DISCUSSED IN THIS PART 5 APPLY WHEN YOU ELECT THE IRA ASSURED
PAYMENT OPTION OR IRA APO PLUS IN THE APPLICATION OR AS A DISTRIBUTION OPTION
AT A LATER DATE, AS WELL AS TO OTHER DISTRIBUTION METHODS UNDER YOUR
CERTIFICATE.
The Rollover IRA Certificates offer several distribution methods specifically
designed to provide retirement income. The Choice Income Plan which includes
the IRA Assured Payment Option and IRA APO Plus, may be elected in the
application or as a distribution option at a later date. In addition, the
Certificates provide for Lump Sum Withdrawals, Substantially Equal Payment
Withdrawals, Systematic Withdrawals and Minimum Distribution Withdrawals.
Fixed and variable income annuity options are also available for amounts to
be applied at the Annuity Commencement Date. The IRA Assured Payment Option
and IRA APO Plus may not be available in all states.
The Certificates are subject to the Code's minimum distribution requirements.
Generally, distributions from these Certificates must commence by April 1 of
the calendar year following the calendar year in which you attain age 70 1/2.
Subsequent distributions must be made by December 31st of each calendar year.
If you do not commence minimum distributions in the calendar year in which
you attain age 70 1/2, and wait until the three month period (January 1 to
April 1) in the next calendar year to commence minimum distributions, then
you must take two required minimum distributions in that calendar year. If
the required minimum distribution is not made, a penalty tax in an amount
equal to 50% of the difference between the amount required to be withdrawn
and the amount actually withdrawn may apply. See "Part 8: Tax Aspects of the
Certificates" for a discussion of various special rules concerning the
minimum distribution requirements.
For IRA retirement benefits subject to minimum distribution requirements, we
will send a form outlining the distribution options available before you
reach age 70 1/2 (if you have not annuitized before that time).
IRA ASSURED PAYMENT OPTION
The IRA Assured Payment Option is designed to provide you with guaranteed
payments for your life (SINGLE LIFE) or for the lifetime of you and a joint
Annuitant you designate (JOINT AND SURVIVOR) through a series of
distributions from the Annuity Account Value that are followed by Life
Contingent Annuity payments. Payments you receive during the fixed period are
designed to pay out the entire Annuity Account Value by the end of the fixed
period and to meet or exceed minimum distribution requirements, if
applicable. See "Minimum Distribution Withdrawals" below. The fixed period
ends with the distribution of the Maturity Value of the last Guarantee
Period, or distribution of the final amount in the Modal Payment Portion of
the Guaranteed Period Account. The fixed period may also be referred to as
the "liquidity period" as during this period, you have access to the Cash
Value through Lump Sum Withdrawals or surrender of the Certificate, with
lifetime income continuing in reduced amounts.
After the fixed period, the payments are made under the Life Contingent
Annuity described below.
You may elect the IRA Assured Payment Option at any time if your initial
contribution or Annuity Account Value is at least $10,000 at the time of
election, by submitting a written request satisfactory to us. The IRA Assured
Payment Option may be elected at ages 59 1/2 through 83. If you are over age
70 1/2, the availability of this option may be restricted under certain
limited circumstances. See "Tax Considerations for the IRA Assured Payment
Option and IRA APO Plus" in Part 8. The IRA Assured Payment Option with level
payments (described below) may be elected at ages as young as 45. However,
there are tax considerations that should be taken into account before
electing level payments under the IRA Assured Payment Option if you are under
age 59 1/2. See "Penalty Tax on Early Distributions" in Part 8. The IRA
Assured Payment Option with increasing payments (described below) may be
elected at ages as young 53 1/2 provided payments do not start before you
attain age 59 1/2.
Once the IRA Assured Payment Option is elected, all amounts currently held
under your Rollover IRA must be allocated to the Guarantee Periods, the Modal
Payment Portion of the Guaranteed Period Account, if applicable, and the Life
Contingent Annuity. See "Allocation of Contributions or Annuity Account
Value" below. Subsequent contributions may be made according to the rules set
forth below and in "Tax-Free Transfers and Rollovers" in Part 8.
Subsequent Contributions under the IRA Assured
Payment Option
Subsequent "regular" IRA contributions may no longer be made for the taxable
year in which you attain age 70 1/2 and thereafter. Subsequent rollover and
direct transfer contributions may be made at any time until the earlier of
(i) when you attain age 84 and (ii) when the Certificate is within seven
years of the end of the fixed period while the IRA Assured Payment Option is
in effect. However, any amount
37
<PAGE>
contributed after you attain 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.
Payments
You may elect to receive monthly, quarterly or annual payments. However, all
payments are made on the 15th of the month. Payments to be made on an
Expiration Date during the fixed period represent distributions of the
Maturity Values of serially maturing Guarantee Periods on their Expiration
Dates. Payments to be made monthly, quarterly or annually on dates other than
an Expiration Date represent distributions from amounts in the Modal Payment
Portion of the Guaranteed Period Account. See "Part 3: The Guaranteed Period
Account."
You have a choice of receiving level payments during the fixed period and
then under the Life Contingent Annuity. Or, you may elect to receive payments
that increase. During the fixed period, payments are designed to increase by
10% every three years on each third anniversary of the payment start date.
After the end of the fixed period, your first payment under the Life
Contingent Annuity will be 10% greater than the final payment made under the
fixed period. Thereafter, payments will increase annually on each anniversary
of the payment start date under the Life Contingent Annuity based on the
annual increase, if any, in the Consumer Price Index, but in no event greater
than 3% per year.
Payments will generally start one payment mode from the date the IRA Assured
Payment Option goes into effect. Or you may choose to defer the date payments
will start generally for a period of up to 60 months. Deferral of the payment
start date permits you to lock in rates at a time when you may consider
current rates to be high, while permitting you to delay receiving payments if
you have no immediate need to receive income under your Certificate. In
making this decision, you should consider that the amount of income you
purchase is based on the rates applicable on the Transaction Date, so if
rates rise during the interim, your payments may be less than they would have
been if you had elected the IRA Assured Payment Option at a later date.
Deferral of the payment start date is not available above age 80. Before you
elect to defer the date your payments will start, you should consider the
consequences of this decision on the requirement under the Code that you take
minimum distributions each calendar year with respect to the value of your
IRA. See "Required Minimum Distributions" in Part 8. The ability to defer the
payment start date may not be available in all states. Also, if amounts are
applied to the IRA Assured Payment Option as a result of the GMIB (discussed
in Part 4), deferral of the payment start date is not permitted.
Required minimum distributions will be calculated based on the Annuity
Account Value in each Guarantee Period and the deemed value of the Life
Contingent Annuity for tax purposes. If at any time your payment under the
IRA Assured Payment Option would be less than the minimum amount required to
be distributed under minimum distribution rules, we will notify you of the
difference. You will have the option to have an additional amount withdrawn
under your Certificate and such withdrawal will be treated as a Lump Sum
Withdrawal; however, no withdrawal charge will apply. An adjustment will be
made to future scheduled payments. Or, you may take the amount from other IRA
funds you may have. See "Lump Sum Withdrawals" below and "Required Minimum
Distributions" in Part 8.
See Appendix III for an example of payments purchased under an IRA Assured
Payment Option.
Fixed Period
If you elect level payments, you may select a fixed period of not less than
seven years nor more than 15 years. The maximum fixed period available based
on your age at issue of the Certificate (or age at the time of election if
the IRA Assured Payment Option is elected after issue) is as follows:
<TABLE>
<CAPTION>
MAXIMUM
AGE* FIXED PERIOD
- ----------------- --------------------
<S> <C>
45 through 70 15 years
71 through 78 85 less your age
79 through 83 7 years
</TABLE>
The minimum and maximum fixed period will be reduced by each year you defer
the date payments will start.
If you elect increasing payments, you do not have a choice as to the fixed
period. Based on your age at issue of the Certificate (or age at the time of
election if the IRA Assured Payment Option is elected after issue), your
fixed period will be as follows:
<TABLE>
<CAPTION>
AGE* FIXED PERIOD
- ----------------- ----------------
<S> <C>
59 1/2 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
</TABLE>
If you elect increasing payments and defer the date payments will start, your
fixed period will be as follows:
<TABLE>
<CAPTION>
FIXED PERIOD BASED ON
DEFERRAL PERIOD
---------------------------
1-36 37-60
AGE* MONTHS MONTHS
- ----------------- ------------- ------------
<S> <C> <C>
53 1/2 through 70 12 years 9 years
71 through 75 9 years 9 years
76 through 80 6 years 6 years
81 through 83 N/A N/A
</TABLE>
* For joint and survivor, the fixed period is based on the age of the younger
Annuitant.
If amounts are applied to the IRA Assured Payment Option as a result of the
GMIB, the fixed periods will be as discussed under "GMIB" in Part 4.
38
<PAGE>
Allocation of Contributions or Annuity Account Value
If the IRA Assured Payment Option is elected in the application, then based
on the amount of your initial contribution, your age and sex (and the age and
sex of the joint Annuitant, if applicable), the mode of payment, the form of
payments and the fixed period you select, your entire contribution will be
allocated by us. A portion of the initial contribution will be allocated
among the Guarantee Periods and the Modal Payment Portion of the Guaranteed
Period Account, if applicable, to provide fixed period payments and a portion
will be applied under the Life Contingent Annuity in order to provide the
payments for life. For initial contributions of $500,000 or more, amounts
allocated to the Life Contingent Annuity may also be based on your
underwriting classification. In general, underwriting classification is based
on your medical history and smoker status and may result in a smaller
allocation of amounts to the Life Contingent Annuity if your classification
is lower than our standard class. If the IRA Assured Payment Option is
elected any time after issue of the Rollover IRA Certificate or if you cancel
IRA APO Plus (discussed below) and elect the IRA Assured Payment Option, then
based on your Annuity Account Value and the information you provide as
described above, your entire Annuity Account Value, including any amounts
currently invested in the Investment Funds, will be allocated by us among the
Guarantee Periods, the Modal Payment Portion of the Guaranteed Period
Account, if applicable, and applied under the Life Contingent Annuity. While
the IRA Assured Payment Option is in effect, no amounts may be allocated to
the Investment Funds. If amounts in the Guarantee Periods are transferred, a
market value adjustment may apply.
If you elect the IRA Assured Payment Option in the application and your
initial contribution will come from multiple sources, your application must
also indicate that contributions are to be allocated to the Money Market Fund
under the Rollover IRA described in Part 4. Election of the IRA Assured
Payment Option must include your instructions to apply your Annuity Account
Value, on the date the last such contribution is received, under the IRA
Assured Payment Option as described above.
Any subsequent contributions made while the IRA Assured Payment Option is in
effect must be allocated to the Guarantee Periods and applied to the Life
Contingent Annuity. We will determine the allocation of such contributions,
such that your payments will be increased and the fixed period and date that
payments are to start under the Life Contingent Annuity will remain the same.
Life Contingent Annuity
The Life Contingent Annuity provides lifetime payments starting after the end
of the fixed period. The portion of your contributions or Annuity Account
Value applied under the Life Contingent Annuity does not have a Cash Value or
an Annuity Account Value and, therefore, does not provide for transfers or
withdrawals. Once the fixed period has ended and payments have begun under
the Life Contingent Annuity, subsequent amounts may no longer be applied
under the Life Contingent Annuity.
THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND
ANNUITY INCOME IS PAID ONLY IF YOU (OR A JOINT ANNUITANT) ARE LIVING AT THE
DATE ANNUITY BENEFITS BEGIN. BENEFITS ARE ONLY PAID DURING YOUR LIFETIME AND,
IF APPLICABLE, THE LIFETIME OF A JOINT ANNUITANT. CONSEQUENTLY, YOU SHOULD
CONSIDER THE POSSIBILITY THAT NO AMOUNTS WILL BE PAID UNDER THE LIFE
CONTINGENT ANNUITY IF YOU (OR A JOINT ANNUITANT) DO NOT SURVIVE TO THE DATE
PAYMENTS ARE TO START UNDER SUCH ANNUITY.
You may elect to have the Life Contingent Annuity provide level or increasing
payments on a Single Life or a Joint and 100% to Survivor basis. If you elect
increasing payments, the payments will increase annually based on the
increase, if any, in the Consumer Price Index, but in no event greater than
3% per year. The Life Contingent Annuity may also provide payments on a Joint
and one-half to Survivor or a Joint and two-thirds to Survivor basis.
Payments under the Life Contingent Annuity will be made to you during your
lifetime (and the lifetime of the joint Annuitant, if applicable) on the same
payment mode and date as the payments that were made during the fixed period.
Election Restrictions under Joint and
Survivor
Election of the IRA Assured Payment Option with a Joint and Survivor form of
the Life Contingent Annuity is subject to the following restrictions: (i) the
joint Annuitant must be your spouse; (ii) neither you nor the joint Annuitant
can be over age 83; (iii) under level payments if you elect the Joint and
100% to Survivor form, only the longest fixed period is permitted; and (iv)
the fixed period may be limited by the minimum distribution rules. See
"Required Minimum Distributions" in Part 8.
Withdrawals under the IRA Assured
Payment Option
While the IRA Assured Payment Option is in effect, if you take a Lump Sum
Withdrawal as described under "Lump Sum Withdrawals" below (or if a Lump
39
<PAGE>
Sum Withdrawal is made to satisfy minimum distribution requirements under the
Certificate), such withdrawals will be taken from all remaining Guarantee
Periods to which your Annuity Account Value is allocated and the Modal
Payment Portion of the Guaranteed Period Account, if applicable, such that
the amount of the payments and the length of the fixed period will be
reduced, and the date payments are to start under the Life Contingent Annuity
will be accelerated. Additional amounts above the amount of the requested
withdrawal will be withdrawn from the Guaranteed Period Account and applied
to the Life Contingent Annuity to the extent necessary to achieve this
result. As a result, the same pattern of payments will continue in reduced
amounts for your life, and if applicable, the life of your joint Annuitant.
If you have elected increasing payments, the first reduction in your payments
will take place no later than the date of the next planned increase.
Substantially Equal Payment Withdrawals, Systematic Withdrawals and Minimum
Distribution Withdrawals may not be elected while the IRA Assured Payment
Option is in effect. See "Substantially Equal Payment Withdrawals,"
"Systematic Withdrawals" and "Minimum Distribution Withdrawals," below.
Death Benefit
Once you have elected the IRA Assured Payment Option, if a death benefit
becomes payable during the fixed period we will pay the death benefit amount,
as described under "Death Benefit" in Part 4, to the designated beneficiary.
Unless you have elected a Joint and Survivor form under the Life Contingent
Annuity, no payment will be made under the Life Contingent Annuity. The death
benefit payable relates only to the Guarantee Periods under the Certificate;
a death benefit is never payable under the Life Contingent Annuity.
If you have elected a Joint and Survivor form of annuity under the Life
Contingent Annuity, payments will be made to you or the joint Annuitant, if
living on the date payments are to start. The designated beneficiary and the
joint Annuitant must be your spouse.
Termination of the IRA Assured
Payment Option
The IRA Assured Payment Option will be terminated if: (i) you cancel such
option at any time by sending a written request satisfactory to us; (ii) you
submit a subsequent contribution and you do not want it applied under the IRA
Assured Payment Option; (iii) you request a transfer of your Annuity Account
Value as described under "Transfers Among Investment Options" in Part 4,
while the IRA Assured Payment Option is in effect; or (iv) you request a
change in the date the payments are to start under the Life Contingent
Annuity. Once the IRA Assured Payment Option is terminated, in order to
receive distributions from your Annuity Account Value you must utilize the
withdrawal options described under "Withdrawal Options" below. Although the
Life Contingent Annuity will continue in effect and payments will be made if
you or your joint Annuitant, if applicable, are living on the date payments
are to start, additional Life Contingent Annuity payments may not be
purchased. You may elect to start the IRA Assured Payment Option again by
submitting a written request satisfactory to us, but no sooner than three
years after the Option was terminated. If you elected the IRA Assured Payment
Option at age 70 1/2 or older and subsequently terminate this Option,
required minimum distributions must continue to be made with respect to your
Certificate.
Before terminating the IRA Assured Payment Option, you should consider the
implications this may have under the minimum distribution requirements. See
"Tax Considerations for the IRA Assured Payment Option and IRA APO Plus" in
Part 8.
Income Annuity Options and Surrendering
the Certificates
If you elect an annuity benefit as described under "Income Annuity Options"
below, or surrender the Certificate for its Cash Value as described under
"Surrendering the Certificates to Receive the Cash Value" in Part 4, once we
receive your returned Certificate, your Certificate will be returned to you
with a notation that the Life Contingent Annuity is still in effect.
Thereafter, no subsequent contributions will be accepted under the
Certificate and no amounts may be applied under the Life Contingent Annuity.
Withdrawal Charge
While the IRA Assured Payment Option is in effect, withdrawal charges will
not apply to the level or increasing payments made during the fixed period.
Except as necessary to meet minimum distribution requirements under the
Certificate, Lump Sum Withdrawals will be subject to a withdrawal charge and
will have a 10% free corridor available. Upon termination of the IRA Assured
Payment Option, the free corridor will apply as described under "Withdrawal
Charge" in Part 6.
IRA APO PLUS
We may offer APO Plus as a non-qualified Certificate. This will have
different tax implications.
IRA APO Plus is a variation of the IRA Assured Payment Option. IRA APO Plus
is available at ages 59 1/2 through 83. It may also be elected at ages as
40
<PAGE>
young as 53 1/2 provided payments under IRA APO Plus do not start before you
attain age 59 1/2. Except as indicated below, all provisions of the IRA
Assured Payment Option apply to IRA APO Plus. IRA APO Plus enables you to
keep a portion of your Annuity Account Value in the Investment Funds while
periodically converting such Annuity Account Value to increase the guaranteed
lifetime income under the IRA Assured Payment Option. When you elect IRA APO
Plus, a portion of your initial contribution or Annuity Account Value as
applicable is allocated by us to the IRA Assured Payment Option to provide a
minimum guaranteed lifetime income through allocation of amounts to the
Guarantee Periods and the Modal Payment Portion of the Guaranteed Period
Account, if applicable, and application of amounts to the Life Contingent
Annuity. The remaining Annuity Account Value remains in the Investment Funds.
Periodically during the fixed period (as described below), a portion of the
remaining Annuity Account Value in the Investment Funds is applied to
increase the guaranteed level payments under the IRA Assured Payment Option.
IRA APO Plus allows you to remain invested in the Investment Funds for longer
than would be possible if you applied your entire Annuity Account Value all
at once to the IRA Assured Payment Option or to an income annuity option,
while utilizing an "exit strategy" to provide retirement income.
If IRA APO Plus is elected in the application, we may require that the
portion of the initial contribution to be allocated to the Investment Funds,
be allocated to the Money Market Fund until the end of the free look period.
See "Free Look Period" in Part 4.
The fixed period under IRA APO Plus will be based on your age (or the age of
the younger Annuitant if Joint and Survivor is elected) at issue of the
Certificate (or age at the time of election if IRA APO Plus is elected after
issue) and will be the same as the periods indicated for increasing payments
under "IRA Assured Payment Option" above.
You may elect to defer the payment start date as described in "Payments"
under "IRA Assured Payment Option," above. The fixed period will also be as
indicated for deferral of the payment start date for increasing payments
under the IRA Assured Payment Option.
You elect IRA APO Plus in the application or at a later date by submitting
the proper form. IRA APO Plus may not be elected if the IRA Assured Payment
Option is already in effect.
The amount applied under IRA APO Plus is either the initial contribution if
IRA APO Plus is elected at issue of the Certificate, or the Annuity Account
Value if IRA APO Plus is elected after issue of the Certificate. Out of a
portion of the amount applied, level payments are provided under the IRA
Assured Payment Option equal to the initial payment that would have been
provided on the Transaction Date by the allocation of the entire amount to
increasing payments as described in "Payments" under "IRA Assured Payment
Option," above. The difference between the amount required for level payments
and the amount required for increasing payments is allocated to the
Investment Funds in accordance with your instructions. If you have Annuity
Account Value in the Guaranteed Period Account at the time this option is
elected, a market value adjustment may apply as a result of such amounts
being transferred to effect the IRA Assured Payment Option.
On the third February 15th following the date the first payment is made (if
payments are to be made on February 15th, the date of the first payment will
be counted as the first February 15th) during the fixed period while you are
living, a portion of the Annuity Account Value in the Investment Funds is
taken pro rata from the Annuity Account Value in each Investment Fund and is
applied to increase the level payments under the IRA Assured Payment Option.
If a deferral period of three years or more is elected, a portion of the
Annuity Account Value in the Investment Funds will be applied on the February
15th prior to the date the first payment is made, to increase the initial
level payments. If payments are to be made on February 15th, the date of the
first payment will be counted as the first February 15th.
The amount applied is the amount which provides for level payments equal to
the initial payment that would have been provided by the allocation of the
entire Annuity Account Value to increasing payments, as described in the
preceding paragraph. This process is repeated each third year during the
fixed period. The first increased payment will be reflected in the payment
made following three full years of payments and then every three years
thereafter. On the Transaction Date immediately following the last payment
during the fixed period, the remaining Annuity Account Value in the
Investment Funds is first applied to the Life Contingent Annuity to change
the level payments previously purchased to increasing payments. If there is
any Annuity Account Value remaining after the increasing payments are
purchased, this balance is applied to the Life Contingent Annuity to further
increase such increasing payments. If the Annuity Account Value in the
Investment Funds is insufficient to purchase the increasing payments, then
the level payments previously purchased will be increased to the extent
possible.
41
<PAGE>
While IRA APO Plus provides a minimum guaranteed lifetime payment under the
IRA Assured Payment Option, the total amount of income that can be provided
over time will depend on the investment performance of the Investment Funds
in which you have Annuity Account Value, as well as the current Guaranteed
Rates and the cost of the Life Contingent Annuity, which may vary.
Consequently, the aggregate amount of guaranteed lifetime income under IRA
APO Plus may be more or less than the amount that could have been purchased
by application at the outset of the entire initial contribution or Annuity
Account Value to the IRA Assured Payment Option.
See Appendix III for an example of the payments purchased under IRA Assured
Payment Option and IRA APO Plus.
In calculating your required minimum distributions your Annuity Account Value
in the Investment Funds, the Annuity Account Value in each Guarantee Period,
any amount in the Modal Payment Portion of the Guaranteed Period Account, and
the deemed value of the Life Contingent Annuity for tax purposes will be
taken into account as described in "Payments" under "IRA Assured Payment
Option," above. Also see "Required Minimum Distributions" in Part 8.
Allocation of Subsequent Contributions under IRA APO Plus
Any subsequent contributions you make may only be allocated to the Investment
Funds, where it is later applied by us under the IRA Assured Payment Option.
Subsequent contributions will be allocated among the Investment Funds
according to your allocation percentages. Allocation percentages can be
changed at any time by writing to our Processing Office. Subsequent
contributions may no longer be made after the end of the fixed period.
Transfers Among Investment Options under IRA APO Plus
While IRA APO Plus is in effect, you may transfer all or a portion of your
Annuity Account Value in the Investment Funds, among the Investment Funds in
any way you choose. However, you may not transfer Annuity Account Value from
the Investment Funds to the Guaranteed Period Account.
Withdrawals under IRA APO Plus
While IRA APO Plus is in effect, if you take a Lump Sum Withdrawal as
described under "Lump Sum Withdrawals" below (or if a Lump Sum Withdrawal is
made to satisfy minimum distribution requirements under the Certificate),
such withdrawals will be taken on a pro rata basis from your Annuity Account
Value in the Investment Funds unless you specify otherwise. If there is
insufficient value in the Investment Funds the excess will be taken from the
Guarantee Periods and the Modal Payment Portion of the Guaranteed Period
Account, if applicable, as described under "Withdrawals under the IRA Assured
Payment Option" above.
A Lump Sum Withdrawal taken to satisfy minimum distribution requirements
under the Certificate will not be subject to a withdrawal charge.
Death Benefit
Once you have elected IRA APO Plus, if a death benefit becomes payable during
the fixed period we will pay the death benefit amount as described under
"Death Benefit" in Part 4, to the designated beneficiary. Unless you have
elected Joint and Survivor under the Life Contingent Annuity, no payment will
be made under the Life Contingent Annuity. The death benefit relates only to
the Investment Funds and the Guarantee Periods under the Certificate; a death
benefit is never payable under the Life Contingent Annuity.
Termination of IRA APO Plus
You may terminate IRA APO Plus at any time by submitting a request
satisfactory to us. In connection with the termination, you may either (i)
elect to terminate IRA APO Plus at any time and have your Certificate operate
under the Rollover IRA rules (see "Part 4: Provisions of the Certificates and
Services We Provide") or (ii) elect the IRA Assured Payment Option (GMIB,
discussed in Part 4 may apply) with level or increasing payments. In the
latter case your remaining Annuity Account Value in the Investment Funds will
be allocated to the Guaranteed Period Account and applied under the Life
Contingent Annuity. A market value adjustment may apply for any amounts
allocated from a Guarantee Period. At least 45 days prior to the end of each
three year period, we will send you a quote indicating how much future income
could be provided under the IRA Assured Payment Option. The quote would be
based on your current Annuity Account Value, current Guaranteed Rates for the
Guarantee Periods and current purchase rates under the Life Contingent
Annuity as of the date of the quote. The actual amount of future income would
depend on the rates in effect on the Transaction Date.
WITHDRAWAL OPTIONS
The Rollover IRA is an annuity contract, even though you may elect to receive
your benefits in a non-annuity form. You may take withdrawals from your
Certificate before the Annuity Commencement Date and while you are alive.
Four withdrawal options are available: Lump Sum Withdrawals, Substantially
Equal Payment Withdrawals, Systematic Withdrawals and Minimum Distribution
Withdrawals. Withdrawals may result in withdrawal charges. See
42
<PAGE>
"Part 6: Deductions and Charges." Special withdrawal rules may apply under
the IRA Assured Payment Option and IRA APO Plus.
Amounts withdrawn from the Guaranteed Period Account, other than at the
Expiration Date, will result in a market value adjustment. See "Market Value
Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration
Date" in Part 3. Withdrawals may be taxable and subject to tax penalty. See
"Part 8: Tax Aspects of the Certificates."
As a deterrent to early withdrawal (generally prior to age 59 1/2) the Code
provides certain penalties. We may also be required to withhold income taxes
from the amount distributed. These rules are outlined in "Part 8: Tax Aspects
of the Certificates."
LUMP SUM WITHDRAWALS
You may take a Lump Sum Withdrawal at any time subject to a minimum
withdrawal amount of $1,000. A request to withdraw more than 90% of the Cash
Value as of the Transaction Date will result in the termination of the
Certificate and will be treated as a surrender of the Certificate for its
Cash Value. See "Surrendering the Certificates to Receive the Cash Value," in
Part 4.
To make a Lump Sum Withdrawal, you must submit a request satisfactory to us
which specifies the Investment Options from which the Lump Sum Withdrawal
will be taken. If we have received the information we require, the requested
withdrawal will become effective on the Transaction Date and proceeds will
usually be mailed within seven calendar days thereafter, but we may delay
payment as described in "When Payments Are Made" in Part 4. If we receive
only partially completed information, our Processing Office will contact you
for specific instructions before your request can be processed.
Lump Sum Withdrawals in excess of the 15% free corridor amount may be subject
to a withdrawal charge. While either the IRA Assured Payment Option or IRA
APO Plus is in effect, Lump Sum Withdrawals that exceed the 10% free corridor
amount may be subject to a withdrawal charge. See "Withdrawal Charge" in Part
6.
SUBSTANTIALLY EQUAL PAYMENT WITHDRAWALS
Substantially Equal Payment Withdrawals provide distributions from the
Annuity Account Value of the amounts necessary so that the 10% penalty tax,
normally applicable to distributions made prior to age 59 1/2, does not
apply. See "Penalty Tax on Early Distributions," in Part 8. Once
distributions begin, they should not be changed or stopped until the later of
age 59 1/2 or five years from the date of the first distribution. If you
change or stop the distributions or take a Lump Sum Withdrawal, you may be
liable for the 10% penalty tax that would have otherwise been due on all
prior distributions made under this option and for any interest thereon.
Substantially Equal Payment Withdrawals may be elected at any time if you are
below age 59 1/2. You can elect this option by submitting the proper form.
You select the day and the month when the first withdrawal will be made, but
it may not be sooner than 28 days after the issue of the Certificate. In no
event may you elect to receive the first payment in the same Contract Year in
which a Lump Sum Withdrawal was taken. We will calculate the amount of the
distribution under a method we select and payments will be made monthly,
quarterly or annually as you select. These payments will continue to be made
until we receive written notice from you to cancel this option. Such notice
must be received at our Processing Office at least seven calendar days prior
to the next scheduled withdrawal date. A Lump Sum Withdrawal taken while
Substantially Equal Payment Withdrawals are in effect will cancel such
withdrawals. You may elect to start receiving Substantially Equal Payment
Withdrawals again, but in no event can the payments start in the same
Contract Year in which a Lump Sum Withdrawal was taken. We will calculate a
new distribution amount.
Unless you specify otherwise, Substantially Equal Payment Withdrawals will be
withdrawn on a pro rata basis from your Annuity Account Value in the
Investment Funds. If there is insufficient value or no value in the
Investment Funds, any additional amount of the withdrawal or the total amount
of the withdrawal, as applicable, will be withdrawn from the Guarantee
Periods in order of the earliest Expiration Date(s) first.
Substantially Equal Payment Withdrawals are not subject to a withdrawal
charge.
SYSTEMATIC WITHDRAWALS
This option may be elected if you are age 59 1/2 to 70 1/2. Systematic
Withdrawals provide level percentage or level amount payouts. You may choose
to receive Systematic Withdrawals on a monthly, quarterly or annual
frequency. You select a dollar amount or percentage of the Annuity Account
Value to be withdrawn, subject to a maximum of 1.2% monthly, 3.6% quarterly
and 15.0% annually, but in no event may any payment be less than $250. If at
the time a Systematic Withdrawal is to be made, the withdrawal amount would
be less than $250, no payment will be made and your Systematic Withdrawal
election will terminate.
43
<PAGE>
You select the date of the month when the withdrawals will be made, but you
may not choose a date later than the 28th day of the month. If no date is
selected, withdrawals will be made on the same calendar day of the month as
the Contract Date. The commencement of payments under the Systematic
Withdrawal option may not be elected to start sooner than 28 days after issue
of the Certificate.
You may elect Systematic Withdrawals at any time by completing the proper
form and sending it to our Processing Office. You may change the payment
frequency of your Systematic Withdrawals once each Contract Year or cancel
this withdrawal option at any time by sending notice in a form satisfactory
to us. The notice must be received at our Processing Office at least seven
calendar days prior to the next scheduled withdrawal date. You may also
change the amount or percentage of your Systematic Withdrawals once in each
Contract Year. However, you may not change the amount or percentage in any
Contract Year where you have previously taken another withdrawal under the
Lump Sum Withdrawal option described above.
Unless you specify otherwise, Systematic Withdrawals will be withdrawn on a
pro rata basis from your Annuity Account Value in the Investment Funds. If
there is insufficient value or no value in the Investment Funds, any
additional amount of the withdrawal required or the total amount of the
withdrawal, as applicable, will be withdrawn from the Guarantee Periods in
order of the earliest Expiration Date(s) first.
Systematic Withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a Lump Sum Withdrawal previously taken in the same
Contract Year, the Systematic Withdrawal exceeds the 15% free corridor
amount. See "Withdrawal Charge" in Part 6.
MINIMUM DISTRIBUTION WITHDRAWALS
Minimum Distribution Withdrawals provide distributions from the Annuity
Account Value of the amounts necessary to meet minimum distribution
requirements set forth in the Code.
This option may be elected in the year in which you attain age 70 1/2. You
can elect Minimum Distribution Withdrawals by submitting the proper election
form. The minimum amount we will pay out is $250.
You may elect Minimum Distribution Withdrawals for each Certificate you own,
subject to our rules then in effect. Currently, Minimum Distribution
Withdrawal payments will be made annually.
Unless you specify otherwise, Minimum Distributions Withdrawals will be
withdrawn on a pro rata basis from your Annuity Account Value in the
Investment Funds. If there is insufficient value or no value in the
Investment Funds, any additional amount of the withdrawal required or the
total amount of the withdrawal, as applicable, will be withdrawn from the
Guarantee Periods in order of the earliest Expiration Date(s) first.
Minimum Distribution Withdrawals are not subject to a withdrawal charge,
except to the extent that, when added to a Lump Sum Withdrawal previously
taken in the same Contract Year, the Minimum Distribution Withdrawal exceeds
the 15% free corridor amount. See "Withdrawal Charge" in Part 6.
Example
The chart below illustrates the pattern of payments, under Minimum
Distribution Withdrawals for a male who purchases the Rollover IRA at age 70
with a single contribution of $100,000, with payments commencing at the end
of the first Contract Year.
PATTERN OF MINIMUM DISTRIBUTION WITHDRAWALS
$100,000 SINGLE CONTRIBUTION FOR A
SINGLE LIFE-MALE AGE 70
[THE FOLLOWING TABLE WAS REPRESENTED
AS AN AREA GRAPH IN THE PROSPECTUS]
Assumes 6.0% Rate of Return
Amount
Age Withdrawn
--- ---------
70 $6,250
75 7,653
80 8,667
85 8,770
90 6,931
95 3,727
100 1,179
[END OF GRAPHICALLY REPRESENTED DATA]
Payments are calculated each year based on the Annuity Account Value at the
end of each year, using the recalculation method of determining payments.
(See "Part 1--Minimum Distribution Withdrawals" in the SAI.) Payments are
made annually, and it is further assumed that no Lump Sum Withdrawals are
taken.
This example assumes an annual rate of return of 6.0% compounded annually for
both the Investment Funds and the Guaranteed Period Account. This rate of
return is for illustrative purposes only and is not intended to represent an
expected or guaranteed rate of return. Your investment results will vary. In
addition, this example does not reflect any charges that may be applicable
under the Rollover IRA. Such charges would effectively reduce the actual
return.
INCOME ANNUITY OPTIONS
Income annuity options provide periodic payments over a specified period of
time which may be fixed or may be based on your life. Annuity forms of
payment are calculated as of the Annuity Commencement Date, which is on file
with our Processing Office. You
44
<PAGE>
can change the Annuity Commencement Date by writing to our Processing Office
any time before the Annuity Commencement Date. However, you may not choose a
date later than the 28th day of any month. Also, no Annuity Commencement Date
will be later than the Processing Date which follows your 90th birthday (may
be different in some states).
Before the Annuity Commencement Date, we will send you a letter advising that
annuity benefits are available. Unless you otherwise elect, we will pay you a
fixed annuity benefit on the "normal form" indicated for your Certificate as
of your Annuity Commencement Date. The amount applied to provide the annuity
benefit will be (1) the Annuity Account Value for any life annuity form or
(2) the Cash Value for any period certain only annuity form except that if
the period certain is more than five years, the amount applied will be no
less than 95% of the Annuity Account Value.
Amounts in the Guarantee Periods that are applied to an income annuity option
prior to an Expiration Date will result in a market value adjustment. See
"Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the
Expiration Date" in Part 3.
ANNUITY FORMS
o Life Annuity: An annuity which guarantees payments for the rest of your
life. Payments end with the last monthly payment before your death.
Because there is no death benefit associated with this annuity form, it
provides the highest monthly payment of any of the life income annuity
options, so long as you are living.
o Life Annuity-Period Certain: This annuity form also guarantees payments
for the rest of your life. In addition, if you die before a specific
period of time (the "certain period") has ended, payments will continue
to your beneficiary for the balance of the certain period. Certain
periods may be 5, 10, 15 or 20 years. A life annuity with a certain
period of 10 years is the normal form of annuity under the Certificates.
o Life Annuity-Refund Certain: This annuity form guarantees payments to
you for the rest of your life. In addition, if you die before the amount
applied to purchase this annuity option has been recovered, payments
will continue to your beneficiary until that amount has been recovered.
This option is available only as a fixed annuity.
o Period Certain Annuity: This annuity form guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years, and does not
involve life contingencies.
o Joint and Survivor Life Annuity: This annuity form guarantees life
income to you and, after your death, continuation of income to the
survivor.
The life annuity-period certain and the life annuity-refund certain are
available on either a single life or joint and survivor life basis.
The income annuity options outlined above are available in both fixed and
variable form, unless otherwise indicated. Fixed annuity payments are
guaranteed by us and will be based either on the tables of guaranteed annuity
payments in your Certificate or on our then current annuity rates, whichever
is more favorable for you. Variable income annuities may be funded through
the Investment Funds through the purchase of annuity units. The amount of
each variable annuity payment may fluctuate, depending upon the performance
of the Investment Funds. That is because the annuity unit value rises and
falls depending on whether the actual rate of net investment return (after
deduction of charges) is higher or lower than the assumed base rate. See
"Annuity Unit Values" in the SAI. Variable income annuities may also be
available by separate prospectus through the Investment Funds of other
separate accounts we offer.
For all Annuitants, the normal form of annuity provides for fixed payments.
We may offer other forms not outlined here. Your registered representative
can provide details.
For each income annuity option, we will issue a separate written agreement
putting the option into effect. Before we pay any annuity benefit, we require
the return of the Certificate.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity, the type of annuity chosen and, in the case of a life
income annuity option, your age (or your and the joint Annuitant's ages) and
in certain instances, the sex of the Annuitant(s). Once an income annuity
option is chosen and payments have commenced, no change can be made.
If, at the time you elect an income annuity option, the amount to be applied
is less than $2,000 or the initial payment under the option elected is less
than $20 monthly, we reserve the right to pay the Annuity Account Value in a
single sum rather than as payments under the annuity form chosen.
45
<PAGE>
PART 6: DEDUCTIONS AND CHARGES
CHARGES DEDUCTED FROM THE
ANNUITY ACCOUNT VALUE
We allocate the entire amount of each contribution to the Investment Options
you select, subject to certain restrictions. We then periodically deduct
certain amounts from your Annuity Account Value. The charges described below
and under "Charges Deducted from the Investment Funds" below will not be
increased by us for the life of the Certificates. We may reduce certain
charges under sponsored arrangements. See "Sponsored Arrangements" below.
Charges are deducted proportionately from all the Investment Funds in which
your Annuity Account Value is invested on a pro rata basis, except as noted
below.
Withdrawal Charge
A withdrawal charge will be imposed as a percentage of each contribution made
to the extent that (i) a Lump Sum Withdrawal or cumulative withdrawals during
a Contract Year exceed the free corridor amount, or (ii) if the Certificate
is surrendered to receive its Cash Value. We determine the withdrawal charge
separately for each contribution in accordance with the table below.
<TABLE>
<CAPTION>
CONTRACT YEAR
1 2 3 4 5 6 7 8+
------ ------ ------ ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
</TABLE>
If the IRA Assured Payment Option or IRA APO Plus is in effect, the
withdrawal charge will be imposed as a percentage of contributions (less
withdrawals), less the amount applied under the Life Contingent Annuity.
The applicable withdrawal charge percentage is determined by the Contract
Year in which the excess withdrawal is made or the Certificate is
surrendered, beginning with "Contract Year 1" with respect to each
contribution withdrawn or surrendered. For purposes of the table, for each
contribution, the Contract Year in which we receive that contribution is
"Contract Year 1."
The withdrawal charge is deducted from the Investment Options from which each
such withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.
Free Corridor Amount
The free corridor amount is 15% of the Annuity Account Value at the
beginning of the Contract Year, minus any amount previously withdrawn
during that Contract Year.
While either the IRA Assured Payment Option or IRA APO Plus is in effect,
the free corridor amount is 10% of the Annuity Account Value at the
beginning of the Contract Year.
There is no withdrawal charge if a Lump Sum Withdrawal is taken to satisfy
minimum distribution requirements under the Certificate. A free corridor
amount is not applicable to a surrender.
For purposes of calculating the withdrawal charge, (1) we treat contributions
as being withdrawn on a first-in first-out basis, and (2) amounts withdrawn
up to the free corridor amount are not considered a withdrawal of any
contributions.
The withdrawal charge is to help cover sales expenses.
Withdrawal Processing Charge
We reserve the right to impose a charge of the lesser of $25 and 2.0% of the
amount withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. This charge, if made, is to cover our administrative expenses in
processing Lump Sum Withdrawals.
Combined GMDB/GMIB Benefit Charge (Plan A)
We deduct a charge annually on each Processing Date for providing the
Combined GMDB/GMIB Benefit (Plan A). The charge is equal to a percentage of
the GMDB in effect on the Processing Date. The percentage is equal to 0.45%
for the 6% to Age 80 Benefit and 0.30% for the 6% to Age 70 Benefit.
GMDB Only Benefit Charge (Plan B)
We deduct a charge annually on each Processing Date for providing the GMDB
Only Benefit (Plan B). The charge is equal to a percentage of the GMDB in
effect on the Processing Date. For issue ages 20 through 75, the percentage
is equal to 0.20%. For issue ages 76 through 78, the percentage is equal to
0.45%.
Charges for State Premium and Other
Applicable Taxes
We deduct a charge for applicable taxes, such as state or local premium
taxes, that might be imposed in your state. Generally we deduct this charge
from the amount applied to provide an income annuity option. In certain
states, however, we may deduct the charge for taxes from contributions. The
current tax charge that might be imposed varies by state and ranges from 0%
to 2.25%.
46
<PAGE>
CHARGES DEDUCTED FROM THE
INVESTMENT FUNDS
Mortality and Expense Risks Charge
We will deduct a daily charge from the assets in each Investment Fund to
compensate us for mortality and expense risks. The daily charge is at the
rate of 0.002477%, which is equivalent to an annual rate of 0.90%, on the
assets in each Investment Fund. Approximately 0.60% of this annual charge is
allocated to the mortality risk and 0.30% is allocated to the expense risk.
We will realize a gain from this charge to the extent it is not needed to
provide for benefits and expenses under the Certificate. We will use any gain
for any lawful purpose including payment of distribution expenses not
recovered from sales charges under the Certificate.
The mortality risk assumed is the risk that Annuitants as a group will live
for a longer time than our actuarial tables predict. As a result, we would be
paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each Certificate, will differ from actual mortality experience.
Lastly, we assume a mortality risk to the extent that at the time of death,
the GMDB exceeds the Cash Value of the Certificate.
The expense risk assumed is the risk that it will cost us more to issue and
administer the Certificates than we expect.
Administration Charge
We will deduct a daily charge from the assets in each Investment Fund, to
compensate us for administration expenses under the Certificates. The daily
charge is at a rate of 0.000692% (equivalent to an annual rate of 0.25%) on
the assets in each Investment Fund. We reserve the right to increase this
charge to an annual rate of 0.35%, the maximum permitted under the
Certificates.
HR TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against HR Trust's assets, the Rule
12b-1 Plan fee, direct operating expenses of HR Trust (such as trustees'
fees, expenses of independent auditors and legal counsel, bank and custodian
charges and liability insurance), and certain investment-related expenses of
HR Trust (such as brokerage commissions and other expenses related to the
purchase and sale of securities), are reflected in each Portfolio's daily
share price. The maximum investment advisory fees paid annually by the
Portfolios cannot be changed without a vote by shareholders. They are as
follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS
- ----------------------------------------------------------------------
FIRST NEXT OVER
$350 $400 $750
MILLION MILLION MILLION
----------- ----------- -----------
<S> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative
Investors ...................... .550% .525% .500%
(Alliance) Growth Investors ... .550% .525% .500%
EQUITY SERIES:
(Alliance) Common Stock ........ .400% .375% .350%
(Alliance) Global .............. .550% .525% .500%
(Alliance) Aggressive Stock ... .500% .475% .450%
(Alliance) Small Cap Growth ...
FIXED INCOME SERIES:
(Alliance) Money Market ........ .400% .375% .350%
(Alliance) Intermediate Govt.
Securities ..................... .500% .475% .450%
FIRST NEXT OVER
$500 $500 $1
MILLION MILLION BILLION
EQUITY SERIES:
Growth & Income ................ .550% .525% .500%
FIRST NEXT OVER
$500 $1 $1.5
MILLION BILLION BILLION
EQUITY SERIES:
International .................. .900% .850% .800%
FIRST NEXT OVER
$750 $750 $1.5
MILLION MILLION BILLION
(Alliance) Equity Index ........ .350% .300% .250%
</TABLE>
Investment advisory fees are established under HR Trust's investment advisory
agreements between HR Trust and its investment adviser, Alliance. The Rule
12b-1 Plan provides that HR Trust, on behalf of each Portfolio may pay
annually up to 0.25% of the average daily net assets of a Portfolio
attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. The Rule 12b-1 Plan
fee, which may be waived at our discretion, may be increased only by action
of the Board of Trustees of HR Trust up to a maximum of 0.50% per annum. All
of these fees and expenses are described more fully in the HR Trust
prospectus.
EQ TRUST CHARGES TO PORTFOLIOS
Investment management fees charged daily against EQ Trust's assets, the Rule
12b-1 Plan fee, direct operating expenses of EQ Trust (such as trustees'
fees, expenses of independent auditors and legal counsel, administrative
service fees, custodian fees, and liability insurance), and certain
investmentrelated expenses of EQ Trust (such as brokerage commissions and
other expenses related to the purchase and sale of securities), are reflected
in each Portfolio's daily share price. The investment management fees paid
annually by the Portfolios cannot be
47
<PAGE>
changed without a vote by shareholders. They are as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS
-------------------------------
FIRST NEXT OVER
$20 $30 $50
MILLION MILLION MILLION
--------- --------- ---------
<S> <C> <C> <C>
T. Rowe Price International
Stock ..................... .750% .600% .500%
T. Rowe Price Equity Income .400% .400% .400%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$150 $150 $300
MILLION MILLION MILLION
--------- --------- ---------
<S> <C> <C> <C>
EQ/Putnam Growth & Income .500% .450% .350%
EQ/Putnam International
Equity ................. .650% .550% .450%
EQ/Putnam Investors
Growth .................. .500% .450% .350%
EQ/Putnam Balanced ....... .500% .450% .350%
MFS Research ............. .400% .375% .350%
MFS Emerging Growth
Companies .............. .400% .375% .350%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT NEXT NEXT OVER
$100 $50 $50 $300 $500
MILLION MILLION MILLION MILLION MILLION
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Morgan Stanley
Markets
Equity ....... 1.150% .900% .800% .600% .400%
Warburg Pincus
Small
Company
Value ........ .500% .500% .500% .500% .500%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$100 $200 $300
MILLION MILLION MILLION
--------- --------- ---------
<S> <C> <C> <C>
Merrill Lynch Global Allocation .500% .450% .350%
Merrill Lynch Basic Value ..... .400% .375% .350%
</TABLE>
Investment management fees are established under EQ Trust's Investment
Management Agreement between EQ Trust and its investment manager, EQ
Financial. EQ Financial has entered into expense limitation agreements with
EQ Trust, with respect to each Portfolio, pursuant to which EQ Financial has
agreed to waive or limit its fees and total annual operating expenses
(expressed as a percentage of the Portfolio's average daily net assets) to
%. See the prospectus for EQ Trust for more information.
The Rule 12b-1 Plan provides that EQ Trust, on behalf of each Portfolio, may
pay annually up to 0.25% of the average daily net assets of a Portfolio
attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. The Rule 12b-1 Plan
fees, which may be waived in the discretion of EDI, may be increased only by
action of the Board of Trustees of EQ Trust up to a maximum of 0.50% per
annum. All of these fees and expenses are described more fully in the EQ
Trust prospectus.
SPONSORED ARRANGEMENTS
For certain sponsored arrangements, we may reduce the withdrawal charge or
change the minimum initial contribution requirements. Under the IRA Assured
Payment Option and IRA APO Plus, we may increase Guaranteed Rates and reduce
purchase rates under the Life Contingent Annuity. We may also change the
guaranteed minimum death benefit and the guaranteed minimum income benefit.
We may offer Investment Funds investing in Class IA shares of HR Trust and EQ
Trust, which are not subject to the 12b-1 Plan fee. Sponsored arrangements
include those in which an employer allows us to sell Certificates 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 sponsoring organization among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a sponsored arrangement must meet certain requirements,
including our requirements for size and number of years in existence.
Sponsored arrangements that have been set up solely to buy Certificates 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 a Certificate is approved 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.
Sponsored arrangements may be governed by the Code, the Employee Retirement
Income Security Act of 1974 (ERISA), or both. We make no representations as
to the impact of those and other applicable laws on such programs. WE
RECOMMEND THAT EMPLOYERS PURCHASING OR MAKING CERTIFICATES AVAILABLE FOR
PURCHASE UNDER A SPONSORED ARRANGEMENT SEEK THE ADVICE OF THEIR OWN LEGAL AND
BENEFITS ADVISERS.
OTHER DISTRIBUTION ARRANGEMENTS
Charges may be reduced or eliminated 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 receive no commission or reduced commissions in connection with the sale
of the Certificates. In no event will a reduction or elimination of charges
be permitted where it would be unfairly discriminatory.
48
<PAGE>
PART 7: VOTING RIGHTS
HR TRUST AND EQ TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of HR Trust and EQ Trust.
Since we own the assets of the Separate Account, we are the legal owner of
the shares and, as such, have the right to vote on certain matters. Among
other things, we may vote:
o to elect each trust's Board of Trustees,
o to ratify the selection of independent auditors for each trust, and
o on any other matters described in each trust's current prospectus or
requiring a vote by shareholders under the 1940 Act.
Because HR Trust is a Massachusetts business trust and EQ Trust is a Delaware
business trust, annual meetings are not required. Whenever a shareholder vote
is taken, we will give Certificate Owners the opportunity to instruct us how
to vote the number of shares attributable to their Certificates. If we do not
receive instructions in time from all Certificate Owners, we will vote the
shares of a Portfolio for which no instructions have been received in the
same proportion as we vote shares of that Portfolio for which we have
received instructions. We will also vote any shares that we are entitled to
vote directly because of amounts we have in an Investment Fund in the same
proportions that Certificate Owners vote.
Each share of each trust is entitled to one vote. Fractional shares will be
counted. Voting generally is on a Portfolio-by-Portfolio basis except that
shares will be voted on an aggregate basis when universal matters, such as
election of Trustees and ratification of independent auditors, are voted
upon. However, if the Trustees determine that shareholders in a Portfolio are
not affected by a particular matter, then such shareholders generally would
not be entitled to vote on that matter.
VOTING RIGHTS OF OTHERS
Currently, we control each trust. EQ Trust shares currently are sold only to
our separate accounts. HR Trust shares are held by other separate accounts of
ours and by separate accounts of insurance companies affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the Rollover IRA Certificate Owners, we
currently do not foresee any disadvantages arising out of this. HR Trust's
Board of Trustees intends to monitor events in order to identify any material
irreconcilable conflicts that possibly may arise and to determine what
action, if any, should be taken in response. If we believe that HR Trust's
response to any of those events insufficiently protects our Certificate
Owners, we will see to it that appropriate action is taken to protect our
Certificate Owners.
SEPARATE ACCOUNT VOTING RIGHTS
If actions relating to the Separate Account require Certificate Owner
approval, Certificate Owners will be entitled to one vote for each
Accumulation Unit they have in the Investment Funds. Each Certificate Owner
who has elected a variable annuity payout may cast the number of votes equal
to the dollar amount of reserves we are holding for that annuity in an
Investment Fund divided by the Accumulation Unit Value for that Investment
Fund. We will cast votes attributable to any amounts we have in the
Investment Funds in the same proportion as votes cast by Certificate Owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
Federal securities laws. To the extent that those laws or the regulations
promulgated under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
49
<PAGE>
PART 8: TAX ASPECTS OF THE CERTIFICATES
TAX-QUALIFIED INDIVIDUAL RETIREMENT ANNUITIES (IRAS)
Introduction
The Rollover IRA Certificate is designed to qualify as an IRA under Section
408(b) of the Code. Your rights under the Rollover IRA cannot be forfeited.
This prospectus contains the information which the Internal Revenue Service
(IRS) requires to be disclosed to an individual before he or she purchases an
IRA.
This Part covers some of the special tax rules that apply to individual
retirement arrangements. You should be aware that an IRA is subject to
certain restrictions in order to qualify for its special treatment under the
Federal tax law.
This prospectus provides our general understanding of applicable Federal
income tax rules, but does not provide detailed tax information and does not
address issues such as state income and other taxes or Federal gift and
estate taxes. Please consult a tax adviser when considering the tax aspects
of the Rollover IRA Certificates.
Further information on IRA tax matters can be obtained from any IRS district
office. Additional information regarding IRAs, including a discussion of
required distributions, can be found in IRS Publication 590, entitled
"Individual Retirement Arrangements (IRAs)," which is generally updated
annually.
The Rollover IRA Certificate has been approved by the IRS as to form for use
as an IRA. This IRS approval is a determination only as to the form of the
annuity and does not represent a determination of the merits of the annuity
as an investment.
Cancelation
You can cancel a Certificate issued as an IRA by following the directions in
Part 4 under "Free Look Period." Since there may be adverse tax consequences
if a Certificate is canceled (and because we are required to report to the
IRS certain distributions from canceled IRAs), you should consult with a tax
adviser before making any such decision. If you cancel this Certificate, you
may establish a new individual retirement arrangement if at the time you meet
the requirements for establishing an individual retirement arrangement.
Contributions to IRAs
Individuals may make three different types of contributions to purchase an
IRA, or as later additions to an existing IRA: "regular" contributions out of
earnings, tax-free "rollover" contributions from tax-qualified plans, or
direct custodian-to-custodian transfers from other individual retirement
arrangements ("direct transfers").
The initial contribution to the Certificate must be either a rollover or a
direct custodian-to-custodian transfer. See "Tax-Free Transfers and
Rollovers," discussed below. Any subsequent contributions you make may be any
of rollovers, direct transfers or "regular" IRA contributions. See
"Contributions Under the Certificates" in Part 4. The immediately following
discussion relates to "regular" IRA contributions. For the reasons noted in
"Tax-Free Transfers and Rollovers" below, you should consult with your tax
adviser before making any subsequent contributions to an IRA which is
intended to serve as a "conduit" IRA.
Generally, $2,000 is the maximum amount of deductible and nondeductible
contributions which may be made to all IRAs by an individual in any taxable
year. The above limit may be less when the individual's earnings are below
$2,000. This limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into an IRA.
The amount of IRA contributions for a tax year that an individual can deduct
depends on whether the individual (or the individual's spouse, if a joint
return is filed) is covered by an employer-sponsored tax-favored retirement
plan. If the individual's spouse does not work or elects to be treated as
having no compensation, the individual and the individual's spouse may
contribute up to $2,250 to individual retirement arrangements (but no more
than $2,000 to any one individual retirement arrangement). The non-working
spouse owns his or her individual retirement arrangements, even if the
working spouse makes contributions to purchase the spousal individual
retirement arrangements.
If neither the individual nor the individual's spouse is covered during any
part of the taxable year by an employer-sponsored tax-favored retirement plan
(including a qualified plan, a tax sheltered account or annuity under Section
403(b) of the Code (TSA) or a simplified employee pension plan), then
regardless of adjusted gross income (AGI), each working spouse may make
deductible contributions to an IRA for each tax year (MAXIMUM PERMISSIBLE
DOLLAR DEDUCTION) up to the lesser of $2,000 or 100% of compensation. In
certain cases, individuals covered by a tax-favored retirement plan include
persons eligible to participate in the plan although not actually
participating. Whether or not a person is covered by a retirement plan will
be reported on an employee's Form W-2.
50
<PAGE>
If the individual is single and covered by a retirement plan during any part
of the taxable year, the deduction for IRA contributions phases out with AGI
between $25,000 and $35,000. If the individual is married and files a joint
return, and either the individual or the spouse is covered by a tax-favored
retirement plan during any part of the taxable year, the deduction for IRA
contributions phases out with AGI between $40,000 and $50,000. If the
individual is married, files a separate return and is covered by a
tax-favored retirement plan during any part of the taxable year, the
deduction for IRA contributions phases out with AGI between $0 and $10,000.
Married individuals filing separate returns must take into account the
retirement plan coverage of the other spouse, unless the couple has lived
apart for the entire taxable year. If AGI is below the phase-out range, an
individual is entitled to the Maximum Permissible Dollar Deduction. In
computing the partial deduction for IRA contributions the individual must
round the amount of the deduction to the nearest $10. The permissible
deduction for IRA contributions is a minimum of $200 if AGI is less than the
amount at which the deduction entirely phases out.
If the individual (or the individual's spouse, unless the couple has lived
apart the entire taxable year and their filing status is married, filing
separately) is covered by a tax-favored retirement plan, the deduction for
IRA contributions must be computed using one of two methods. Under the first
method, the individual determines AGI and subtracts $25,000 if the individual
is a single person, $40,000 if the individual is married and files a joint
return with the spouse, or $0 if the individual is married and files a
separate return. The resulting amount is the individual's Excess AGI. The
individual then determines the limit on the deduction for IRA contributions
using the following formula:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Maximum Adjusted
Permissible Dollar
$10,000-Excess AGI Dollar Deduction
$10,000 X Deduction = Limit
</TABLE>
Under the second method, the individual determines his or her Excess AGI and
then refers to the table in Appendix IV originally prepared by the IRS to
determine the deduction.
Contributions may be made for a tax year until the deadline for filing a
Federal income tax return for that tax year (without extensions). No
contributions are allowed for the tax year in which an individual attains age
70 1/2 or any tax year after that. A working spouse age 70 1/2 or over,
however, can contribute up to the lesser of $2,000 or 100% of "earned income"
to a spousal individual retirement arrangement for a non-working spouse until
the year in which the non-working spouse reaches age 70 1/2.
An individual not eligible to deduct part or all of the IRA contribution may
still make nondeductible contributions on which earnings will accumulate on a
tax-deferred basis. The deductible and nondeductible contributions may not,
however, together exceed the lesser of the $2,000 limit (or $2,250 spousal
limit) or 100% of compensation for each tax year. See "Excess Contributions"
below. Individuals must keep their own records of deductible and
nondeductible contributions in order to prevent double taxation on the
distribution of previously taxed amounts. See "Distributions from IRA
Certificates" below.
An individual making nondeductible contributions in any taxable year, or
receiving amounts from any IRA to which he or she has made nondeductible
contributions, must file the required information with the IRS. Moreover,
individuals making nondeductible IRA contributions must retain all income tax
returns and records pertaining to such contributions until interest in such
IRAs are fully distributed.
Excess Contributions
Excess contributions to an IRA are subject to a 6% excise tax for the year in
which made and for each year thereafter until withdrawn. In the case of
"regular" IRA contributions any contribution in excess of the lesser of
$2,000 or 100% of compensation or earned income is an "excess contribution,"
(without regard to the deductibility or nondeductibility of IRA contributions
under this limit). Also, any "regular" contributions made after you reach age
70 1/2 are excess contributions. In the case of rollover IRA contributions,
excess contributions are 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). An excess contribution
(rollover or "regular") which is withdrawn, however, before the time for
filing the individual's Federal income tax return for the tax year (including
extensions) is not includable in income and therefore is not subject to the
10% penalty tax on early distributions (discussed below under "Penalty Tax on
Early Distributions"), provided any earnings attributable to the excess
contribution are also withdrawn and no tax deduction is taken for the excess
contribution. The withdrawn earnings on the excess contribution, however,
would be includable in the individual's gross income and would be subject to
the 10% penalty tax. If excess contributions are not withdrawn before the
time for filing the individual's Federal income tax return for
51
<PAGE>
the year (including extensions), "regular" contributions may still be
withdrawn after that time if the IRA contribution for the tax year did not
exceed $2,250 and no tax deduction was taken for the excess contribution; in
that event, the excess contribution would not be includable in gross income
and would not be subject to the 10% penalty tax. Lastly, excess "regular"
contributions may also be removed by underutilizing the allowable
contribution limits for a later year.
If excess rollover contributions are not withdrawn before the time for filing
the individual's Federal tax return for the year (including extensions) and
the excess contribution occurred as a result of incorrect information
provided by the plan, any such excess amount can be withdrawn if no tax
deduction was taken for the excess contribution. As above, excess rollover
contributions withdrawn under those circumstances would not be includable in
gross income and would not be subject to the 10% penalty tax.
Tax-Free Transfers and Rollovers
Rollover contributions may be made to an IRA from these sources: (i)
qualified plans, (ii) TSAs (including 403(b)(7) custodial accounts) and (iii)
other individual retirement arrangements.
The rollover amount must be transferred to the Certificate either as a direct
rollover of an "eligible rollover distribution" (described below) or as a
rollover by the individual plan participant or owner of the individual
retirement arrangement. In the latter cases, the rollover must be made within
60 days of the date the proceeds from another individual retirement
arrangement or an eligible rollover distribution from a qualified plan or TSA
were received. Generally the taxable portion of any distribution from a
qualified plan or TSA is an eligible rollover distribution and may be rolled
over tax-free to an IRA unless the distribution is (i) a required minimum
distribution under Section 401(a)(9) of the Code; or (ii) one of a series of
substantially equal periodic payments made (not less frequently than
annually) (a) for the life (or life expectancy) of the plan participant or
the joint lives (or joint life expectancies) of the plan participant and his
or her designated beneficiary, or (b) for a specified period of ten years or
more.
Under some circumstances, amounts from a Certificate may be rolled over on a
tax-free basis to a qualified plan. To get this "conduit" IRA treatment, the
source of funds used to establish the IRA must be a rollover contribution
from the qualified plan and the entire amount received from the 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. If you make a contribution to the
Certificate which is from an eligible rollover distribution and you commingle
such contribution with other contributions, you may not be able to roll over
these eligible rollover distribution contributions and earnings to another
qualified plan (or TSA, as the case may be) at a future date, unless the Code
permits.
Under the conditions and limitations of the Code, an individual may elect for
each IRA to make a tax-free rollover once every 12-month period among
individual retirement arrangements (including rollovers from retirement bonds
purchased before 1983). Custodian-to-custodian transfers are not rollovers
and can be made more frequently than once a year.
The same tax-free treatment applies to amounts withdrawn from the Certificate
and rolled over into other individual retirement arrangements unless the
distribution was received under an inherited IRA. Tax-free rollovers are also
available to the surviving spouse beneficiary of a deceased individual, or a
spousal alternate payee of a qualified domestic relations order applicable to
a qualified plan. In some cases, IRAs can be transferred on a tax-free basis
between spouses or former spouses incidental to a judicial decree of divorce
or separation.
Distributions from IRA Certificates
Income or gains on contributions under IRAs are not subject to Federal income
tax until benefits are distributed to the individual. Distributions include
withdrawals from your Certificate, surrender of your Certificate and annuity
payments from your Certificate. Death benefits are also distributions. Except
as discussed below, the amount of any distribution from an IRA is fully
includable as ordinary income by the individual in gross income.
If the individual makes non-deductible IRA contributions, those contributions
are recovered tax-free when distributions are received. The individual must
keep records of all nondeductible contributions. At the end of each tax year
in which the individual has received a distribution, the individual
determines a ratio of the total nondeductible IRA contributions (less any
amounts previously withdrawn tax-free) to the total account balances of all
IRAs held by the individual at the end of the tax year (including rollover
IRAs) plus all IRA distributions made during such tax year. The resulting
ratio is then multiplied by all distributions from the IRA during that tax
year to determine the nontaxable portion of each distribution.
In addition, a distribution (other than a required minimum distribution
received after age 70 1/2) is not
52
<PAGE>
taxable if (1) the amount received is a return of excess contributions which
are withdrawn, as described under "Excess Contributions" above, (2) the
entire amount received is rolled over to another individual retirement
arrangement (see "Tax-Free Transfers and Rollovers" above) or (3) in certain
limited circumstances, where the IRA acts as a "conduit," the entire amount
is paid into a qualified plan or TSA that permits rollover contributions.
Distributions from an IRA are not entitled to the special favorable five-year
averaging method (or, in certain cases, favorable ten-year averaging and
long-term capital gain treatment) available in certain cases to distributions
from qualified plans.
Required Minimum Distributions
The minimum distribution rules require IRA owners to start taking annual
distributions from their retirement plans by age 70 1/2. The distribution
requirements are designed to provide for distribution of the owner's interest
in the IRA over the owner's life expectancy. Whether the correct amount has
been distributed is calculated on a year by year basis; there are no
provisions in the Code to allow amounts taken in excess of the required
amount to be carried over or carried back and credited to other years.
Generally, an individual must take the first required minimum distribution
with respect to the calendar year in which the individual turns age 70 1/2.
The individual has the choice to take the first required minimum distribution
during the calendar year he or she turns age 70 1/2, or to delay taking it
until the three month (January 1-April 1) period in the next calendar year.
(Distributions must commence no later than the "Required Beginning Date,"
which is the April 1st of the calendar year following the calendar year in
which the individual turns age 70 1/2.) If the individual chooses to delay
taking the first annual minimum distribution, then the individual 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 every year.
There are two approaches to taking minimum distributions--"account based" or
"annuity based"--and there are a number of distribution options in both of
these categories. These choices are intended to give individuals a great deal
of flexibility to provide for themselves and their families.
An account based minimum distribution approach may be a lump sum payment, or
periodic withdrawals made over a period which does not extend beyond the
individual's life expectancy or the joint life expectancies of the individual
and a designated beneficiary. An annuity based approach involves application
of the Annuity Account Value to an annuity for the life of the individual or
the joint lives of the individual and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
You should discuss with your tax adviser which minimum distribution options
are best for your own personal situation. Individuals who are participants in
more than one tax-favored retirement plan may be able to choose different
distribution options for each plan.
Your required minimum distribution for any taxable year is calculated by
taking into account the required minimum distribution from each of your
individual retirement arrangements. The IRS, however, does not require that
you make the required distribution from each individual retirement
arrangement that you maintain. As long as the total amount distributed
annually satisfies your overall minimum distribution requirement, you may
choose to take your annual required distribution from any one or more
individual retirement arrangements that you maintain.
An individual may recompute his or her minimum distribution amount each year
based on the individual's current life expectancy as well as that of the
spouse. No recomputation is permitted, however, for a beneficiary other than
a spouse. If there is an insufficient distribution in any year, a 50% tax may
be imposed on the amount by which the minimum required to be distributed
exceeds the amount actually distributed. The penalty tax may be waived by the
Secretary of the Treasury in certain limited circumstances. Failure to have
distributions made as the Code and Treasury regulations require may result in
disqualification of your IRA. See "Tax Penalty for Insufficient
Distributions" below.
Except as described in the next sentence, if the individual dies after
distribution in the form of an annuity has begun, or after the Required
Beginning Date, payment of the remaining interest must be made at least as
rapidly as under the method used prior to the individual's death. (The IRS
has indicated that an exception to the rule that payment of the remaining
interest must be made at least as rapidly as under the method used prior to
the individual's death applies if the beneficiary of the IRA is the surviving
spouse. In some circumstances, the surviving spouse may elect to "make the
IRA his or her own" and halt distributions until he or she reaches age 70
1/2).
If an individual dies before the Required Beginning Date and before
distributions in the form of an
53
<PAGE>
annuity begin, distributions of the individual's entire interest under the
Certificate must be completed within five years after death, unless payments
to a designated beneficiary begin within one year of the individual's death
and are made over the beneficiary's life or over a period certain which does
not extend beyond the beneficiary's life expectancy.
If the surviving spouse is the designated beneficiary, the spouse may delay
the commencement of such payments up until the individual would have attained
70 1/2. In the alternative, a surviving spouse may elect to roll over the
inherited IRA into the surviving spouse's own IRA.
Taxation of Death Benefits
Distributions received by a beneficiary are generally given the same tax
treatment the individual would have received if distribution had been made to
the individual.
If you elect to have your spouse be the sole primary beneficiary and to be
the successor Annuitant and Certificate Owner, then your surviving spouse
automatically becomes both the successor Certificate Owner and Annuitant, and
no death benefit is payable until the surviving spouse's death.
Guaranteed Minimum Death Benefit
The Code provides that no part of an individual retirement account may be
invested in life insurance contracts. Treasury Regulations provide that an
individual retirement account may be invested in an annuity contract which
provides a death benefit of the greater of premiums paid or the contract's
cash value. Your Certificate provides a minimum death benefit guarantee that
in certain circumstances may be greater than either of contributions made or
the Annuity Account Value. Although there is no ruling regarding the type of
minimum death benefit guarantee provided by the Certificate, Equitable Life
believes that the Certificate's minimum death benefit guarantee should not
adversely affect the qualification of the Certificate as an IRA.
Nevertheless, it is possible that the IRS could disagree, or take the
position that some portion of the charge in the Certificate for the minimum
death benefit guarantee should be treated for Federal income tax purposes as
a taxable partial withdrawal from the Certificate. If this were so, such a
deemed withdrawal would also be subject to tax penalty for Certificate Owners
under age 59 1/2.
Tax Considerations for the IRA Assured Payment Option and IRA APO Plus
Although the Life Contingent Annuity does not have a Cash Value, it will be
assigned a value for tax purposes which will generally change each year. This
value must be taken into account when determining the amount of required
minimum distributions from your IRA even though the Life Contingent Annuity
may not be providing a source of funds to satisfy such required minimum
distribution. Accordingly, before you apply any IRA funds under the IRA
Assured Payment Option or IRA APO Plus or terminate such Options, you should
be aware of the tax considerations discussed below. Consult with your tax
adviser to determine the impact of electing the IRA Assured Payment Option
and IRA APO Plus in view of your own particular situation.
When funds have been allocated to the Life Contingent Annuity, you will
generally be required to determine your required minimum distribution by
annually recalculating your life expectancy. The IRA Assured Payment Option
and IRA APO Plus will not be available if you have previously made a
different election. Recalculation is no longer required once the only
payments you or your spouse receive are under the Life Contingent Annuity.
If prior to the date payments are to start under the Life Contingent Annuity,
you surrender your Certificate, or withdraw any remaining Annuity Account
Value, it may be necessary for you to satisfy your required minimum
distribution by accelerating the start date of payments for your Life
Contingent Annuity, or to the extent available, take distributions from other
IRA funds you may have. Alternatively you may convert your IRA Life
Contingent Annuity under the IRA Rollover to a non-qualifed Life Contingent
Annuity. This would be viewed as a distribution of the value of the Life
Contingent Annuity from the IRA, and therefore, would be a taxable event.
However, since the Life Contingent Annuity would no longer be part of an IRA,
its value would not have to be taken into account in determining future
required minimum distributions.
If you have elected a Joint and Survivor form of the Life Contingent Annuity,
the joint Annuitant must be your spouse. You must determine your required
minimum distribution by annually recalculating both your life expectancy and
your spouse's life expectancy. The IRA Assured Payment Option and IRA APO
Plus will not be available if you have previously made a different election.
Recalculation is no longer required once the only payments you or your spouse
receive are under the Life Contingent Annuity. The value of such an annuity
will change in the event of your death or the death of your spouse. For this
reason, it is important that we be informed if you or your spouse dies before
the Life Contingent Annuity has started payments so that a lower valuation
can
54
<PAGE>
be made. Otherwise a higher tax value may result in an overstatement of the
amount that would be necessary to satisfy your required minimum distribution
amount.
Allocations of funds to the Life Contingent Annuity may prevent the
Certificate from later receiving "conduit" IRA treatment. See "Tax-Free
Transfers and Rollovers" above.
Prohibited Transaction
An IRA may not be borrowed against or used as collateral for a loan or other
obligation. If the IRA is borrowed against or used as collateral, its
tax-favored status will be lost as of the first day of the tax year in which
the event occurred. If this happens, the individual must include in Federal
gross income for that year an amount equal to the fair market value of the
IRA Certificate as of the first day of that tax year, less the amount of any
nondeductible contributions not previously withdrawn. Also, the early
distribution penalty tax of 10% will apply if the individual has not reached
age 59 1/2 before the first day of that tax year. See "Penalty Tax on Early
Distributions" below.
PENALTY TAX ON EARLY DISTRIBUTIONS
The taxable portion of IRA distributions will be subject to a 10% penalty tax
unless the distribution is made (1) on or after your death, (2) because you
have become disabled, (3) on or after the date when you reach age 59 1/2, or
(4) in accordance with the exception outlined below if you are under 59 1/2.
A payout over your life or life expectancy (or joint and survivor lives or
life expectancies), which is part of a series of substantially equal periodic
payments made at least annually, is also not subject to penalty tax. To
permit you to meet this exception, Equitable Life has two options:
Substantially Equal Payment Withdrawals and the IRA Assured Payment Option
with level payments, both of which are described in Part 5. If you are a
Rollover IRA Certificate Owner who will be under age 59 1/2 as of the date
the first payment is expected to be received and you choose either option,
Equitable Life will calculate the substantially equal annual payments under a
method we will select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although
Substantially Equal Payment Withdrawals and IRA Assured Payment Option level
payments are not subject to the 10% penalty tax, they are taxable as
discussed in "Distributions from IRA Certificates," above. Once Substantially
Equal Payment Withdrawals or IRA Assured Payment Option level payments begin,
the distributions should not be stopped or changed until the later of your
attaining age 59 1/2 or five years after the date of the first distribution,
or the penalty tax, including an interest charge for the prior penalty
avoidance, may apply to all withdrawals. Also, it is possible that the IRS
could view any additional withdrawal or payment you take from your
Certificate as changing your pattern of Substantially Equal Payment
Withdrawals or IRA Assured Payment Option payments for purposes of
determining whether the penalty applies.
Where a taxpayer under age 59 1/2 purchases an individual retirement annuity
contract calling for substantially equal periodic payments during a fixed
period, continuing afterwards under a joint life contingent annuity with a
reduced payment to the survivor (e.g., a joint and 50% to survivor), the
question might be raised whether payments will not be substantially equal for
the joint lives of the taxpayer and survivor, as the payments will be reduced
at some point. In issuing our information returns, we code the substantially
equal periodic payments from such a contract as eligible for an exception
from the early distribution penalty. We believe that any change in payments
to the survivor would come within the statutory provision covering change of
payments on account of death. As there is no direct authority on this point,
however, if you are under age 59 1/2, you should discuss this item with your
own tax adviser when electing a reduced survivorship option.
TAX PENALTY FOR INSUFFICIENT
DISTRIBUTIONS
Failure to make required distributions discussed above in "Required Minimum
Distributions" may cause the disqualification of the IRA. Disqualification
may result in current taxation of your entire benefit. In addition a 50%
penalty tax may be imposed on the difference between the required
distribution amount and the amount actually distributed, if any.
We do not automatically make distributions from a Certificate before the
Annuity Commencement Date unless a request has been made. It is your
responsibility to comply with the minimum distribution rules. We will notify
you when our records show that your age 70 1/2 is approaching. If you do not
select a method, we will assume you are taking your minimum distribution from
another IRA that you maintain. You should consult with your tax adviser
concerning these rules and their proper application to your situation.
TAX PENALTY FOR EXCESS DISTRIBUTIONS OR ACCUMULATION
A 15% excise tax applies to an individual's aggregate excess distributions
from all tax-favored retirement plans (including IRAs). The excise tax is in
addition to the ordinary income tax due but is reduced by the amount (if any)
of the early distribution penalty tax imposed by the Code. The aggregate
distributions in any year will be subject to excise tax if they exceed an
indexed amount ($ in 1997).
In addition, in certain cases the estate tax imposed on a deceased
individual's estate will be increased if
55
<PAGE>
the accumulated value of the individual's interest in qualified annuities and
tax favored retirement plans is excessive.
FEDERAL AND STATE INCOME TAX
WITHHOLDING
Equitable Life is required to withhold Federal income tax from IRA
distributions, unless the recipient elects not to be subject to income tax
withholding. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of the distribution. Special withholding
rules apply to foreign recipients and United States citizens residing outside
the United States. If a recipient does not have sufficient income tax
withheld or does not make sufficient estimated income tax payments, however,
the recipient may incur penalties under the estimated income tax rules.
Recipients should consult their tax advisers to determine whether they should
elect out of withholding. Requests not to withhold Federal income tax must be
made in writing prior to receiving benefits under the Certificate. Our
Processing Office will provide forms for this purpose. No election out of
withholding is valid unless the recipient provides us with the correct
taxpayer identification number and a United States residence address.
Certain states have indicated that income tax withholding will apply to
payments made from the Certificate to residents. In some states, a recipient
may elect out of state withholding. 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 and consult your
tax adviser.
Periodic payments are generally subject to wage-bracket type withholding (as
if such payments were payments of wages by an employer to an employee) unless
the recipient elects no withholding. If a recipient does not elect out of
withholding or does not specify the number of withholding exemptions,
withholding will generally be made as if the recipient is married and
claiming three withholding exemptions. There is an annual threshold of
taxable income from periodic annuity payments which is exempt from
withholding based on this assumption. For 1997, a recipient of periodic
payments (e.g., monthly or annual payments) which total less than a $14,400
taxable amount will generally be exempt from Federal income tax withholding,
unless the recipient specifies a different choice of withholding exemptions.
A withholding election may be revoked at any time and remains effective until
revoked. If a recipient fails to provide a correct taxpayer identification
number, withholding is made as if the recipient is single with no exemptions.
A recipient of a non-periodic distribution (total or partial) will generally
be subject to withholding at a flat 10% rate. A recipient who provides a
United States residence address and a correct taxpayer identification number
will generally be permitted to elect not to have tax withheld.
All recipients receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right to make
withholding elections.
OTHER WITHHOLDING
As a general rule, if death benefits are payable to a person two or more
generations younger than the Certificate Owner, a Federal generation skipping
tax may be payable with respect to the benefit at rates similar to the
maximum estate tax rate in effect at the time. The generation skipping tax
provisions generally apply to transfers which would also be subject to the
gift and estate tax rules. Individuals are generally allowed an aggregate
generation skipping tax exemption of $1 million. Because these rules are
complex, you should consult with your tax adviser for specific information,
especially where benefits are passing to younger generations, as opposed to a
spouse or child.
If we believe a benefit may be subject to generation skipping tax we may be
required to withhold for such tax unless we receive acceptable written
confirmation that no such tax is payable.
IMPACT OF TAXES TO EQUITABLE LIFE
The Certificates provide that Equitable Life may charge the Separate Account
for taxes. Equitable Life can set up reserves for such taxes.
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers among the Investment Funds or between the Guaranteed Period Account
and one or more Investment Funds are not taxable.
TAX CHANGES
The United States Congress has in the past considered and may in the future
consider proposals for legislation that, if enacted, could change the tax
treatment of annuities and individual retirement arrangements. In addition,
the Treasury Department may amend existing regulations, issue new
regulations, or adopt new interpretations of existing laws. State tax laws
or, if you are not a United States resident, foreign tax laws, may affect the
tax consequences to you or the beneficiary. These laws may change from time
to time without notice and, as a result, the tax consequences may be altered.
There is no way of predicting whether, when or in what form any such change
would be adopted.
Any such change could have retroactive effects regardless of the date of
enactment. We suggest you consult your legal or tax adviser.
56
<PAGE>
PART 9: INDEPENDENT ACCOUNTANTS
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life at December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996 included in Equitable
Life's Annual Report on Form 10-K, incorporated by reference in the
prospectus, have been examined by Price Waterhouse LLP, independent
accountants, whose reports thereon are incorporated herein by reference. Such
consolidated financial statements and consolidated financial statement
schedules have been incorporated herein by reference in reliance upon the
reports of Price Waterhouse LLP given upon their authority as experts in
accounting and auditing.
57
<PAGE>
APPENDIX I: 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 were
allocated on February 15, 1998 to a Guarantee Period with an Expiration Date
of February 15, 2007 at a Guaranteed Rate of 7.00% resulting in a Maturity
Value at the Expiration Date of $183,846, and further assuming that a
withdrawal of $50,000 were made on February 15, 2002.
<TABLE>
<CAPTION>
ASSUMED
GUARANTEED RATE ON
FEBRUARY 15, 2002
----------------------
5.00% 9.00%
---------- ----------
<S> <C> <C>
As of February 15, 2002 (Before
Withdrawal)
- -----------------------------------------
(1) Present Value of Maturity Value, also
Annuity Account Value ................ $144,048 $119,487
(2) Guaranteed Period Amount ............. 131,080 131,080
(3) Market Value Adjustment: (1)-(2) .... 12,968 (11,593)
On February 15, 2002 (After Withdrawal)
- -----------------------------------------
(4) Portion of (3) Associated
with Withdrawal: (3) x [$50,000 /
(1)] ................................. $ 4,501 $ (4,851)
(5) Reduction in Guaranteed
Period Amount: [$50,000-(4)] ........ 45,499 54,851
(6) Guaranteed Period Amount: (2)-(5) ... 85,581 76,229
(7) Maturity Value ....................... 120,032 106,915
(8) Present Value of (7), also
Annuity Account Value ................ 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% in the example), a portion of 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% in the example), a
portion of a positive market value adjustment is realized.
58
<PAGE>
APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE
Under the Certificates the death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
the GMDB (see "GMDB" in Part 4); and
(2) the death benefit provided with respect to the Guaranteed Period
Account (see "Death Benefit Amount" in Part 3).
The following is an example illustrating the calculation of the GMDB.
Assuming $100,000 is allocated to the Investment Funds (with no allocation to
the Fixed Income Series), no subsequent contributions, no transfers and no
withdrawals, the GMDB for an Annuitant age 45 would be calculated as follows:
<TABLE>
<CAPTION>
END OF
CONTRACT ANNUITY NON-NEW YORK NEW YORK
YEAR ACCOUNT VALUE GMDB(1) GMDB
- ---------- --------------- -------------- -------------
<S> <C> <C> <C>
1 $105,000 $106,000 $105,000(2)
2 $155,500 $112,360 $115,500(2)
3 $132,825 $119,102 $132,825(2)
4 $106,260 $126,248 $132,825(3)
5 $116,886 $133,823 $132,825(3)
6 $140,263 $141,852 $140,263(2)
7 $140,263 $150,363 $140,263(3)
</TABLE>
The Annuity Account Values for Contract Years 1 through 8 are determined
based on hypothetical rates of return of 5.00%, 10.00%, 15.00%, 20.00%,
10.00%, 20.00% and 0.00%, respectively.
6% TO AGE 80 BENEFIT
(1) For Contract Years 1 through 7, the GMDB equals the initial contribution
increased by 6%.
NEW YORK--ANNUAL RATCHET TO AGE 80
(2) At the end of Contract Years 1, 2, and 3 again at the end of Contract
Year 6, the GMDB is equal to the current Annuity Account Value.
(3) At the end of Contract Years 4, 5 and 7, GMDB is equal to the GMDB at
the end of the prior year since it is higher than the current Annuity
Account Value.
59
<PAGE>
APPENDIX III: EXAMPLE OF PAYMENTS UNDER THE IRA ASSURED PAYMENT
OPTION AND IRA APO PLUS
The second column in the chart below illustrates the payments for a male age
70 who purchased the IRA Assured Payment Option on April , 1997 with a
single contribution of $100,000, with increasing annual payments. The
payments are to commence on February 15, 1998. It assumes that the fixed
period is 15 years and that the Life Contingent Annuity will provide payments
on a Single Life basis. Based on Guaranteed Rates for the Guarantee Periods
and the current purchase rate for the Life Contingent Annuity, on April ,
1997, the initial payment would be $7,048.32 and would increase in each three
year period to a final payment of $10,319.45. The first payment under the
Life Contingent Annuity would be $11,351.39.
Alternatively as shown in the third and fourth columns, this individual could
purchase IRA APO Plus with the same $100,000 contribution, with the same
fixed period and the Life Contingent Annuity on a Single Life basis. Based on
Guaranteed Rates for the Guarantee Periods and the current purchase rate for
the Life Contingent Annuity, on April , 1997, the same initial payment of
$7,048.32 would be purchased under IRA APO Plus. However, unlike the payment
under the IRA Assured Payment Option that will increase every three years,
this initial payment under IRA APO Plus is not guaranteed to increase.
Therefore, only $79,640.09 is needed to purchase the initial payment stream,
and the remaining $20,359.91 is invested in the Investment Funds according to
the Certificate Owner's instructions. Any future increase in payments under
IRA APO Plus will depend on the investment performance in the Investment
Funds.
Assuming hypothetical average annual rates of return of 0% and 8% (after
deduction of charges) for the Investment Funds, the Annuity Account Value in
the Investment Funds would grow to $20,359.91 and $25,647.63 respectively
after three years. A portion of this amount is used to purchase the increase
in the payments at the beginning of the fourth year. The remainder will stay
in the Investment Funds to be drawn upon for the purchase of increases in
payments at the end of each third year thereafter during the fixed period and
at the end of the fixed period under the Life Contingent Annuity. Based on
Guaranteed Rates for the Guarantee Periods and purchase rates for the Life
Contingent Annuity as of April , 1997, the third and fourth columns
illustrate the increasing payments that would be purchased under IRA APO Plus
assuming 0% and 8% rates of return respectively.
Under both options, while the Certificate Owner is living payments increase
annually after the 16th year under the Life Contingent Annuity based on the
increase, if any, in the Consumer Price Index, but in no event greater than
3% per year.
ANNUAL PAYMENTS
<TABLE>
<CAPTION>
ILLUSTRATIVE ILLUSTRATIVE
GUARANTEED INCREASING PAYMENTS PAYMENTS PAYMENTS
UNDER THE UNDER UNDER
YEARS IRA ASSURED PAYMENT OPTION IRA APO PLUS AT 0% IRA APO PLUS AT 8%
- ------- ------------------------------ ------------------ ------------------
<S> <C> <C> <C>
1-3 $ 7,048.32 $7,048.32 $ 7,048.32
4-6 7,753.15 8,336.74 8,800.85
7-9 8,528.47 8,336.74 8,817.96
10-12 9,381.31 8,529.34 9,791.83
13-15 10,319.45 8,529.34 9,791.83
16 11,351.39 8,723.31 10,919.35
</TABLE>
As described above, a portion of the illustrated contribution is applied to
the Life Contingent Annuity. This amount will generally be larger under the
IRA Assured Payment Option than under IRA APO Plus, and conversely a smaller
portion of the contribution will be allocated to Guarantee Periods under the
former than the latter. In this illustration, $82,069.88 is allocated under
the IRA Assured Payment Option to the Guarantee Periods and under IRA APO
Plus, $89,906.43 is allocated to the Guarantee Periods and the Investment
Funds. The balance of the $100,000 ($17,930.12 and $10,093.57, respectively)
is applied to the Life Contingent Annuity.
The rates of return of 0% and 8% are for illustrative purposes only and are
not intended to represent an expected or guaranteed rate of return. Your
investment results will vary. Payments will also depend on the Guaranteed
Rates and Life Contingent Annuity purchase rates in effect as of the
Transaction Date. It is assumed that no Lump Sum Withdrawals are taken.
60
<PAGE>
APPENDIX IV: IRS TAX DEDUCTION TABLE
If your Maximum Permissible Dollar Deduction is $2,000, use this table to
estimate the amount of your contribution which will be deductible.
<TABLE>
<CAPTION>
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION
- ------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0 $2,000 $2,550 $1,490 $5,050 $990 $ 7,550 $490
50 1,990 2,600 1,480 5,100 980 7,600 480
100 1,980 2,650 1,470 5,150 970 7,650 470
150 1,970 2,700 1,460 5,200 960 7,700 460
200 1,960 2,750 1,450 5,250 950 7,750 450
250 1,950 2,800 1,440 5,300 940 7,800 440
300 1,940 2,850 1,430 5,350 930 7,850 430
350 1,930 2,900 1,420 5,400 920 7,900 420
400 1,920 2,950 1,410 5,450 910 7,950 410
450 1,910 3,000 1,400 5,500 900 8,000 400
500 1,900 3,050 1,390 5,550 890 8,050 390
550 1,890 3,100 1,380 5,600 880 8,100 380
600 1,880 3,150 1,370 5,650 870 8,150 370
650 1,870 3,200 1,360 5,700 860 8,200 360
700 1,860 3,250 1,350 5,750 850 8,250 350
750 1,850 3,300 1,340 5,800 840 8,300 340
800 1,840 3,350 1,330 5,850 830 8,350 330
850 1,830 3,400 1,320 5,900 820 8,400 320
900 1,820 3,450 1,310 5,950 810 8,450 310
950 1,810 3,500 1,300 6,000 800 8,500 300
1,000 1,800 3,550 1,290 6,050 790 8,550 290
1,050 1,790 3,600 1,280 6,100 780 8,600 280
1,100 1,780 3,650 1,270 6,150 770 8,650 270
1,150 1,770 3,700 1,260 6,200 760 8,700 260
1,200 1,760 3,750 1,250 6,250 750 8,750 250
1,250 1,750 3,800 1,240 6,300 740 8,800 240
1,300 1,740 3,850 1,230 6,350 730 8,850 230
1,350 1,730 3,900 1,220 6,400 720 8,900 220
1,400 1,720 3,950 1,210 6,450 710 8,950 210
1,450 1,710 4,000 1,200 6,500 700 9,000 200
1,500 1,700 4,050 1,190 6,550 690 9,050 200
1,550 1,690 4,100 1,180 6,600 680 9,100 200
1,600 1,680 4,150 1,170 6,650 670 9,150 200
1,650 1,670 4,200 1,160 6,700 660 9,200 200
1,700 1,660 4,250 1,150 6,750 650 9,250 200
1,750 1,650 4,300 1,140 6,800 640 9,300 200
1,800 1,640 4,350 1,130 6,850 630 9,350 200
1,850 1,630 4,400 1,120 6,900 620 9,400 200
1,900 1,620 4,450 1,110 6,950 610 9,450 200
1,950 1,610 4,500 1,100 7,000 600 9,500 200
2,000 1,600 4,550 1,090 7,050 590 9,550 200
2,050 1,590 4,600 1,080 7,100 580 9,600 200
2,100 1,580 4,650 1,070 7,150 570 9,650 200
2,150 1,570 4,700 1,060 7,200 560 9,700 200
2,200 1,560 4,750 1,050 7,250 550 9,750 200
2,250 1,550 4,800 1,040 7,300 540 9,800 200
2,300 1,540 4,850 1,030 7,350 530 9,850 200
2,350 1,530 4,900 1,020 7,400 520 9,900 200
2,400 1,520 4,950 1,010 7,450 510 9,950 200
2,450 1,510 5,000 1,000 7,500 500 10,000 0
2,500 1,500
<FN>
- ------------
Excess AGI = Your AGI minus your THRESHOLD LEVEL:
If you are single, your Threshold Level is $25,000.
If you are married, your Threshold Level is $40,000.
If you are married and file a separate tax return, your
Excess AGI = your AGI.
</TABLE>
61
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PAGE
--------
Part 1: Minimum Distribution Withdrawals 2
Part 2: Accumulation Unit Values 2
Part 3: Annuity Unit Values 2
Part 4: Custodian and Independent Accountants 3
Part 5: Money Market Fund and Intermediate
Government Securities Fund Yield Information 3
Part 6: Long-Term Market Trends 5
Part 7: Financial Statements 7
</TABLE>
HOW TO OBTAIN A ROLLOVER IRA STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 45
Send this request form to:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an INCOME MANAGER Rollover IRA SAI:
---------------------------------------------------------
Name
---------------------------------------------------------
Address
---------------------------------------------------------
City State Zip
62
<PAGE>
May 1, 1997
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PROFILE OF THE INCOME MANAGER (SERVICE MARK) ACCUMULATOR
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
This Profile is a summary of some of the more important points that you should
know and consider before purchasing a Certificate. The Certificate is more
fully described in the prospectus which accompanies this Profile. Please read
the prospectus carefully.
1. THE ANNUITY CERTIFICATE. The Accumulator Certificate is a combination
variable and fixed deferred annuity issued by Equitable Life. It is designed
to provide for retirement income through the investment of after-tax money
during an accumulation phase. You may invest in Investment Funds where your
Certificate's value may vary up or down depending upon the investment
performance. You may also invest in Guarantee Periods, or "GIRO's" that when
held to maturity provide guaranteed interest rates that we have set and a
guarantee of principal. If you make any transfers or withdrawals, the GIRO's
investment value may increase or decrease until maturity due to interest rate
changes. Earnings under your Certificate accumulate on a tax-deferred basis
until amounts are distributed. Amounts distributed may be subject to income
tax.
The Investment Funds offer a potential for better returns than those
guaranteed under GIRO's, but the Investment Funds involve risk and you can
lose money. You may make transfers among the Investment Funds and GIRO's, but
certain restrictions apply to transfers to, and from or among GIRO's. The
value of GIRO's prior to their maturity fluctuates and you can lose money on
premature transfers.
The Certificate provides a number of distribution methods during the
accumulation phase and for converting to annuity income. You can elect at
issue of the Certificate for an additional charge, a guaranteed minimum income
benefit or "GMIB" which guarantees a minimum amount of future lifetime income
regardless of investment performance when you convert to the Assured Payment
Plan (Life Annuity with a Period Certain) at specified times.
2. ANNUITY PAYMENTS. When you are ready to start receiving income, annuity
income is also available by applying your Certificate's value to the Assured
Payment Plan (Life Annuity with a Period Certain). If you have elected GMIB,
income payments will be based on the GMIB minimum or current values, whatever
is higher.
1
<PAGE>
You can also have your Certificate's value applied to any of the following
five INCOME ANNUITY OPTIONS: (1) Life Annuity - payments for your life
(assuming you are the annuitant), (2) Life Annuity - Period Certain - payments
for your life, but with payments continuing to the beneficiary for the balance
of the 5, 10, 15 or 20 years (as you select) if you die before the end of the
selected period; (3) Life Annuity - Refund Certain - payments for your life,
with payments continuing to the beneficiary after your death until any
remaining amount applied to this option runs out; and (4) Period Certain
Annuity - payments for a specified period of time, usually 5, 10, 15 or 20
years, with no life contingencies. Options (2) and (3) are also available as a
Joint and Survivor Annuity - payments for your life, and after your death,
continuation of payments to the survivor for life. Income Annuity Options
(other than the Refund Certain only available on a fixed basis) are available
as a fixed annuity, or as a variable annuity, where the dollar amount of your
payments will depend upon the investment performance of the Investment Funds.
Once you begin receiving income annuity payments, you cannot change your
annuity option.
3. PURCHASE. You can purchase a Certificate with $5,000 or more. You may add
additional amounts of $1,000 or more at any time (subject to certain
restrictions). Subject to certain age restrictions, there are two ways to
purchase a Certificate, as a Combined guaranteed minimum death benefit, or
"GMDB" and GMIB Benefit, or "Plan A," or as a GMDB Only Benefit, "Plan B."
Both benefits are discussed below. You choose the one that best suits your
needs.
4. INVESTMENT OPTIONS. You may invest in any or all of the following
Investment Funds, which invest in shares of corresponding portfolios of The
Hudson River Trust (HR Trust) and EQ Advisors Trust, (EQ Trust). The
portfolios are described in the prospectuses for HR Trust and EQ Trust.
<TABLE>
<CAPTION>
HR TRUST INVESTMENT FUNDS EQ TRUST INVESTMENT FUNDS
- ---------------------------------- ------------------------------------------------------------------------
<S> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors T. Rowe Price International Stock Merrill Lynch Basic Value
(Alliance) Growth Investors T. Rowe Price Equity Income
EQUITY SERIES:
(Alliance) Growth & Income EQ/Putnam Growth & Income Value
(Alliance) Common Stock EQ/Putnam International Equity
(Alliance) Global EQ/Putnam Investors Growth
(Alliance) International EQ/ Putnam Balanced
(Alliance) Aggressive Stock MFS Research
(Alliance) Small Cap Growth MFS Emerging Growth Companies
(Alliance) Equity Index Morgan Stanley Emerging Markets Equity
FIXED INCOME SERIES: Warburg Pincus Small Company Value
(Alliance) Money Market
(Alliance) Intermediate Gov't Merrill Lynch Global Allocation
Securities
</TABLE>
You may also invest in one or more GIRO's currently maturing in years 1998
through 2007.
2
<PAGE>
5. EXPENSES. The Certificate has expenses as follows: For Plan A -- there is
an annual charge as a percentage of the GMDB. The percentage is equal to
0.45%. For Plan B -- the percentage is equal to 0.20% (for ages 20 through 75)
and 0.45% (for ages 76 through 83). As a percentage of assets in the
Investment Funds, a daily charge is deducted for mortality and expense risks
at an annual rate of 0.90%; a daily charge is deducted for administration
expenses at an annual rate of 0.25%.
The charges for the portfolios of HR Trust range from 0.67% to 0.86% of the
average daily assets of HR Trust portfolios, depending upon HR Trust
portfolios selected (based on 1996 other expenses). The charges for the
portfolios of EQ Trust range from 0.85% to 1.75% of the average daily assets
of EQ Trust portfolio. These amounts are based on estimates and, for EQ Trust,
a current expense cap. The Rule 12b-1 Plan fees for the portfolios of HR Trust
and EQ Trust are 0.25% of the average daily assets of HR Trust and EQ Trust,
respectively. Charges for state premium and other applicable taxes may also
apply at the time you elect to start receiving income annuity payments.
A withdrawal charge is imposed as a percentage of each contribution withdrawn
in excess of a free corridor amount, or if the Certificate is surrendered. The
free corridor amount for withdrawals (other than surrender) is 15% of the
Certificate's value at the beginning of the year. When applicable, the
withdrawal charge is determined in accordance with the table below, based on
the year a contribution is withdrawn. The year in which we receive your
contribution is "Year 1."
Year of Contribution Withdrawal
1 2 3 4 5 6 7 8+
------------------------------------------------------------
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
The following chart is designed to help you understand the charges in the
Certificate. The "Total Annual Charges" column shows the combined total of the
Certificate charges and the portfolio charges, as shown in the first two
columns. The last two columns show you two examples of the charges, in
dollars, that you would pay under a Certificate. The examples assume that you
invested $1,000 in a Certificate which earns 5% annually and that you withdraw
your money: (1) at the end of year 1, and (2) at the end of year 10. For year
1, the Total Annual Charges are assessed as well as the withdrawal charge. For
year 10, the example shows the aggregate of all the annual charges assessed
for the 10 years, but there is no withdrawal charge. No charges for state
premium and other applicable taxes are assumed in the examples.
3
<PAGE>
<TABLE>
<CAPTION>
EXAMPLES
TOTAL ANNUAL TOTAL ANNUAL TOTAL Total Annual
CERTIFICATE PORTFOLIO ANNUAL Expenses at End of:
INVESTMENT FUND CHARGES CHARGES CHARGES (1) (2)
1 Year 10 Years
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative
Investors
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock
(Alliance) Global
(Alliance) International [TO BE INSERTED BY AMENDMENT]
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES:
(Alliance) Money Market
(Alliance) Intermediate Gov't
Securities
EQ/Putnam Investors Growth
EQ/ Putnam Balanced
MFS Research
MFS Emerging Growth
Companies
Morgan Stanley Emerging
Markets Equity
Warburg Pincus Small
Company Value
Merrill Lynch Global
Allocation
Merrill Lynch Basic Value
</TABLE>
For Investment Funds investing in portfolios with less than 10 years of
operations, charges have been estimated. The charges reflect any expense
reimbursement or waiver. Portfolio charges to Investment Funds investing in EQ
Trust portfolios reflect the expenses of publicly available mutual funds that
are managed by the respective EQ fund advisers. These public funds are
substantially similar to the EQ Trust portfolios whose shares are purchased by
Investment funds of the Separate Account. For more detailed information, see
the Fee Table in the prospectus.
6. TAXES. In most cases, your earnings are not taxed until distributions are
made from your Certificate. If you are younger than age 59 1/2 when you
receive any distributions, you may be charged an additional 10% Federal tax
penalty on the amount received.
7. ACCESS TO YOUR MONEY. During the accumulation phase, you may receive
distributions under your Certificate through the following WITHDRAWAL OPTIONS:
(1) Lump Sum Withdrawals of at least $1,000 may be taken at any time, and (2)
Systematic Withdrawals, paid monthly, quarterly or annually, subject to
certain restrictions, including a maximum percentage of your Certificate's
value. You also have access to your Certificate's value by surrendering the
Certificate. All or a portion of a withdrawal may be subject to a withdrawal
charge to the extent that the withdrawal exceeds the free corridor amount. A
free corridor amount does not apply to a surrender. Withdrawals and surrenders
may be subject to income tax and may be subject to a tax penalty. Withdrawals
from GIRO's prior to their maturity may result in a market value adjustment.
4
<PAGE>
8. PERFORMANCE. During the accumulation phase, your Certificate's value in the
Investment Funds may vary up or down depending upon the investment performance
of the Investment Funds you have selected. The following chart shows total
returns for each Investment Fund for the time periods shown. The results
indicated reflect all of the charges (including the combined GMDB/GMIB charge
for the optional GMIB benefit), except for the withdrawal charge. If included,
the withdrawal charge would reduce the performance numbers shown below. Past
performance is not a guarantee of future results.
For periods prior to October 1996, the performance data for Investments Funds
investing HR Trust portfolios does not reflect Rule 12b-1 fees. Performance
data for Investment Funds investing in EQ Trust portfolios are presented on a
hypothetical basis that reflect the actual investment experience of
substantially similar publicly available mutual funds managed by the
respective EQ Trust portfolio advisers.
CALENDAR YEAR
<TABLE>
<CAPTION>
INVESTMENT FUND 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock
(Alliance) Global
(Alliance) International
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES:
(Alliance) Money Market
(Alliance) Intermediate Gov't
Securities
T. Rowe Price International Stock
T. Rowe Price Equity Income
EQ/Putnam Growth & Income Value
EQ/Putnam International Equity
EQ/Putnam Investors Growth
EQ/ Putnam Balanced
MFS Research
MFS Emerging Growth Companies
Morgan Stanley Emerging Markets Equity
Warburg Pincus Small Company Value
Merrill Lynch Global Allocation
Merrill Lynch Basic Value
</TABLE>
5
<PAGE>
9. DEATH BENEFIT. If you die (assuming you are the annuitant) before amounts
are applied under an income annuity option, the named beneficiary will be paid
a death benefit. The death benefit is equal to (1) your Certificate's value in
the Investment Funds, or if greater, the GMDB, and (2) the amount of the death
benefit provided with respect to GIRO's.
GMDB -- If you are between the ages of 20 to 75, the GMDB will be a "6% to
Age 80 Benefit." For ages 76 to 83 the GMDB benefit will grow to age 85
instead of 80. In New York the GMDB is an "Annual Ratchet to Age 80" for
ages 20 to 79, otherwise a return of the money you invest in the
Investment Funds will apply.
6% to Age 80 Benefit (Not available in New York) -- We add interest to the
initial amount at 6% (3% for amounts in the Fixed Income Series) through
the Annuitant's age 80.
Annual Ratchet to Age 80 -- This is the amount reset each year through the
Annuitant's age 80 to your Certificate's value, if it is higher than the
prior year's GMDB.
10. OTHER INFORMATION.
QUALIFIED PLANS. If the Certificates will be purchased by certain types of
plans qualified under Section 401(a), or 401(k) of the Internal Revenue Code,
please consult your tax adviser first. Any discussion of taxes in this profile
does not apply to such plans.
GMIB. GMIB is an optional benefit that provides a minimum amount of guaranteed
lifetime income for your future. When you are ready to convert (during
specified periods of time) your Certificate's value to the Assured Payment
Plan (Life Annuity with a Period Certain) the minimum amount of lifetime
income that will be provided will be the greater of (i) your GMIB or (ii) your
Certificate's current value in the Investment Funds, applied at current
annuity purchase factors.
Your GMIB is calculated using a benefit base which is equal to the amount of
money you initially put in the Investment Funds. This amount earns interest at
6% (3% for amounts in the Fixed Income Series), and is increased by any
additional amounts put in, and decreased by any amounts you take out. Interest
is credited through age 80. GMIB provides a safety net for your future income.
QUALIFIED PLANS. If the Certificates will be purchased by certain types of
plans qualified under Section 401(a), or 401(k) of the Internal Revenue Code,
please consult your tax adviser first. Any discussion of taxes in this profile
does not apply.
FREE LOOK. You can examine the Certificate for a period of 10 days after you
receive it, and return it to us for a refund. The free look period is longer
in some states.
Your refund will equal your Certificate's value, reflecting any investment
gain or loss, in the Investment Funds, and any increase or decrease in the
value of any amounts held in the GIRO's, through the date we receive your
Certificate. Some states may require that we calculate the refund differently.
PRINCIPAL ASSURANCE. This option is designed to assure the return of your
original amount invested on a GIRO maturity date, by putting a portion of your
money in a particular GIRO, and the balance in the Investment Funds in any way
you choose. Assuming that you make no transfers or withdrawals of the portion
in the GIRO, such amount will grow to your original investment upon maturity.
REBALANCING. You can have your money automatically readjusted among the
Investment Funds and GIRO's periodically in order to retain the proportional
investments you select.
6
<PAGE>
DOLLAR COST AVERAGING. You can elect at issue of your Certificate to allocate
your contribution to the Money Market Fund and have a dollar amount
transferred from the Money Market Fund into the other Investment Funds over
the first twelve months in which case Certificate charges will not be deducted
during that period from amounts in the Money Market Fund. Or, you can elect to
have a dollar amount or percentage transferred from the Money Market Fund into
the other Investment Funds on a periodic basis over a longer period of time,
and all applicable charges deducted from the value in the Money Market Fund
will apply. Dollar cost averaging does not assure a profit or protect against
a loss should market prices decline.
REPORTS. We will provide you with an annual statement of your Certificate's
values as of the last day of each year, and three additional reports of your
Certificate's values each year. You also will be provided with written
confirmations of each financial transaction, and copies of annual and
semi-annual statements of HR Trust and EQ Trust.
You may call toll-free at 1-800-789-7771 for a recording of daily Investment
Fund values and guaranteed rates applicable to GIRO's.
11. INQUIRIES. If you need more information, please contact your registered
representative. You may also contact us, at:
The Equitable Life Assurance Society of the United States
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Telephone 1-800-789-7771 and Fax 1-201-583-2224
7
<PAGE>
INCOME MANAGER(SM)
ACCUMULATOR PROSPECTUS
DATED MAY 1, 1997
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
Issued By:
The Equitable Life Assurance Society of the United States
This prospectus describes certificates The Equitable Life Assurance Society of
the United States (EQUITABLE LIFE, WE, OUR and US) offers under a combination
variable and fixed deferred annuity contract (ACCUMULATOR) issued on a group
basis or as individual contracts. Enrollment under a group contract will be
evidenced by issuance of a certificate. Certificates and individual contracts
each will be referred to as "Certificates." Accumulator Certificates are used
for after-tax contributions to a non-qualified annuity. A minimum initial
contribution of $5,000 is required to put the Certificate into effect.
The Accumulator is designed to provide retirement income at a future date.
Contributions accumulate on a tax-deferred basis and can be later distributed
under a number of different methods which are designed to be responsive to the
owner's (CERTIFICATE OWNER, YOU and YOUR) objectives.
The Accumulator offers investment options (INVESTMENT OPTIONS) that permit you
to create your own strategies. These Investment Options include 23 variable
investment funds (INVESTMENT FUNDS) and each GUARANTEE PERIOD in the
GUARANTEED PERIOD ACCOUNT.
We invest each Investment Fund in Class IB shares of a corresponding portfolio
(PORTFOLIO) of The Hudson River Trust (HR TRUST) or EQ Advisors Trust (EQ
TRUST), mutual funds whose shares are purchased by separate accounts of
insurance companies. The prospectuses for HR Trust and EQ Trust, both of which
accompany this prospectus, describe the investment objectives, policies and
risks of the Portfolios.
The Investment Funds investing in corresponding Portfolios of HR Trust are:
the Asset Allocation Series--(Alliance) Conservative Investors and (Alliance)
Growth Investors Funds; the Equity Series--(Alliance) Growth & Income,
(Alliance) Common Stock, (Alliance) Global, (Alliance) International,
(Alliance) Aggressive Stock, (Alliance) Small Cap Growth and (Alliance) Equity
Index Funds; and the Fixed Income Series--(Alliance) Money Market and
(Alliance) Intermediate Government Securities Funds.
The Investment Funds investing in corresponding Portfolios of EQ Trust are: T.
Rowe Price International Stock, T. Rowe Price Equity Income, EQ/Putnam Growth
& Income Value, EQ/Putnam International Equity, EQ/Putnam Investors Growth,
EQ/Putnam Balanced, MFS Research, MFS Emerging Growth Companies, Morgan
Stanley Emerging Markets Equity, Warburg Pincus Small Company Value, Merrill
Lynch Global Allocation, and Merrill Lynch Basic Value Funds.
Amounts allocated to a Guarantee Period accumulate on a fixed basis and are
credited with interest at a rate we set (GUARANTEED RATE) for the entire
period. On each business day (BUSINESS DAY) we will determine the Guaranteed
Rates available for amounts newly allocated to Guarantee Periods. A market
value adjustment (positive or negative) will be made for withdrawals,
transfers, surrender and certain other transactions from a Guarantee Period
before its expiration date (EXPIRATION DATE). Each Guarantee Period has its
own Guaranteed Rates. The Guarantee Periods currently available have
Expiration Dates of February 15, in years 1998 through 2007.
You may choose from a variety of payout options, including the Assured Payment
Plan and our other variable annuities and fixed annuities.
This prospectus provides information about the Accumulator that prospective
investors should know before investing. You should read it carefully and
retain it for future reference. The prospectus is not valid unless accompanied
by current prospectuses for HR Trust and EQ Trust, both of which you should
also read carefully.
Registration statements relating to Separate Account No. 45 (SEPARATE ACCOUNT)
and interests under the Guarantee Periods have been filed with the Securities
and Exchange Commission (SEC). The statement of additional information (SAI),
dated May 1, 1997, which is part of the registration statement for the
Separate Account, is available free of charge upon request by writing to our
Processing Office or calling 1-800-789-7771, our toll-free number. The SAI has
been incorporated by reference into this prospectus. The Table of Contents for
the SAI appears at the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE CERTIFICATES 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 INVESTED.
Copyright 1997
The Equitable Life Assurance Society of the
United States, New York, New York 10104.
All rights reserved.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
1996 is incorporated herein by reference.
All documents or reports filed by Equitable Life pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE ACT) after
the date hereof and prior to the termination of the offering of the securities
offered hereby shall be deemed to be incorporated by reference in this
prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified and superseded, to constitute a part of this prospectus. Equitable
Life files its Exchange Act documents and reports, including its annual and
quarterly reports on Form 10-K and Form 10-Q, electronically pursuant to EDGAR
under CIK No. 0000727920.
Equitable Life will provide without charge to each person to whom this
prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits not specifically incorporated by reference
into the text of such documents). Requests for such documents should be
directed to The Equitable Life Assurance Society of the United States, 1290
Avenue of the Americas, New York, New York 10104. Attention: Corporate
Secretary (telephone: (212) - ).
2
<PAGE>
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL TERMS PAGE 4
FEE TABLE PAGE 5
PART 1: EQUITABLE LIFE, THE SEPARATE
ACCOUNT AND THE
INVESTMENT FUNDS PAGE 9
EQUITABLE LIFE 9
SEPARATE ACCOUNT NO. 45 9
HR TRUST 9
HR TRUST'S INVESTMENT ADVISER 10
EQ TRUST 10
EQ TRUST'S MANAGER AND ADVISERS 10
INVESTMENT POLICIES AND OBJECTIVES OF HR
TRUST'S AND EQ TRUST'S PORTFOLIOS 11
PART 2: INVESTMENT PERFORMANCE PAGE 14
STANDARDIZED PERFORMANCE DATA 14
RATE OF RETURN DATA FOR INVESTMENT
FUNDS 17
COMMUNICATING PERFORMANCE DATA 23
MONEY MARKET FUND AND INTERMEDIATE
GOVERNMENT SECURITIES FUND
YIELD INFORMATION 23
PART 3: THE GUARANTEED PERIOD
ACCOUNT PAGE 24
GUARANTEE PERIODS 24
MARKET VALUE ADJUSTMENT FOR TRANSFERS,
WITHDRAWALS OR SURRENDER PRIOR TO THE
EXPIRATION DATE 25
INVESTMENTS 26
PART 4: PROVISIONS OF THE
CERTIFICATES AND SERVICES
WE PROVIDE PAGE 27
WHAT IS THE ACCUMULATOR? 27
AVAILABILITY OF THE CERTIFICATES 27
CONTRIBUTIONS UNDER THE CERTIFICATES 27
METHODS OF PAYMENT 27
ALLOCATION OF CONTRIBUTIONS 27
FREE LOOK PERIOD 28
ANNUITY ACCOUNT VALUE 29
TRANSFERS AMONG INVESTMENT OPTIONS 29
DOLLAR COST AVERAGING 29
DEATH BENEFIT 30
WHEN THE CERTIFICATE OWNER DIES
BEFORE THE ANNUITANT 31
WITHDRAWAL OPTIONS 32
GMIB 31
CASH VALUE 36
SURRENDERING THE CERTIFICATES TO
RECEIVE THE CASH VALUE 36
INCOME ANNUITY OPTIONS 36
ASSURED PAYMENT PLAN 37
WHEN PAYMENTS ARE MADE 37
ASSIGNMENT 38
SERVICES WE PROVIDE 38
DISTRIBUTION OF THE CERTIFICATES 38
PART 5: DEDUCTIONS AND CHARGES PAGE 39
CHARGES DEDUCTED FROM THE ANNUITY
ACCOUNT VALUE 39
CHARGES DEDUCTED FROM THE INVESTMENT
FUNDS 40
HR TRUST CHARGES TO PORTFOLIOS 40
EQ TRUST CHARGES TO PORTFOLIOS 40
GROUP OR SPONSORED ARRANGEMENTS 41
OTHER DISTRIBUTION ARRANGEMENTS 41
PART 6: VOTING RIGHTS PAGE 42
HR TRUST AND EQ TRUST VOTING RIGHTS 42
VOTING RIGHTS OF OTHERS 42
SEPARATE ACCOUNT VOTING RIGHTS 42
CHANGES IN APPLICABLE LAW 42
PART 7: TAX ASPECTS OF THE CERTIFICATES PAGE 43
TAX CHANGES 43
TAXATION OF NON-QUALIFIED ANNUITIES 43
FEDERAL AND STATE INCOME TAX
WITHHOLDING 44
OTHER WITHHOLDING 44
SPECIAL RULES FOR CERTIFICATES ISSUED IN
PUERTO RICO 45
IMPACT OF TAXES TO EQUITABLE LIFE 45
TRANSFERS AMONG INVESTMENT OPTIONS 45
PART 8: KEY FACTORS IN RETIREMENT
PLANNING PAGE 46
INTRODUCTION 46
INFLATION 46
STARTING EARLY 47
TAX-DEFERRAL 47
INVESTMENT OPTIONS 48
THE BENEFIT OF ANNUITIZATION 49
PART 9: INDEPENDENT ACCOUNTANTS PAGE 50
APPENDIX I: MARKET VALUE
ADJUSTMENT EXAMPLE PAGE 51
APPENDIX II: QUALIFIED PLAN CERTIFICATES PAGE 52
APPENDIX III: GUARANTEED MINIMUM
DEATH BENEFIT (GMDB) EXAMPLE PAGE 53
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS PAGE 54
</TABLE>
3
<PAGE>
GENERAL TERMS
ACCUMULATION UNIT--Contributions that are invested in an Investment Fund
purchase Accumulation Units in that Investment Fund.
ACCUMULATION UNIT VALUE--The dollar value of each Accumulation Unit in an
Investment Fund on a given date.
ANNUITANT--The individual who is the measuring life for determining death
benefits before the Annuity Commencement Date, and annuity benefits.
ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under
the Accumulator Certificate. See "Annuity Account Value" in Part 4.
ANNUITY COMMENCEMENT DATE--The date on which amounts are applied to provide an
annuity benefit.
BUSINESS DAY--Generally, any day on which the New York Stock Exchange is open
for trading. For the purpose of determining the Transaction Date, our Business
Day ends at 4:00 p.m. Eastern Time or the closing of the New York Stock
Exchange, if earlier.
CASH VALUE--The Annuity Account Value minus any applicable charges.
CERTIFICATE--The Certificate issued under the terms of a group annuity
contract and any individual contract, including any endorsements.
CERTIFICATE OWNER--The person who owns an Accumulator Certificate and has the
right to exercise all rights under the Certificate.
CODE--The Internal Revenue Code of 1986, as amended.
CONTRACT DATE--The date on which the Annuitant is enrolled under the group
annuity contract, or the effective date of the individual contract. This is
usually the Business Day we receive the initial contribution at our Processing
Office.
CONTRACT YEAR--The 12-month period beginning on your Contract Date and each
anniversary of that date.
EQ TRUST--EQ Advisors Trust, a mutual fund in which the assets of separate
accounts of insurance companies are invested. EQ Financial Consultants, Inc.
(EQ Financial) is the manager of EQ Trust and has appointed advisers for each
of the Portfolios.
GUARANTEED MINIMUM DEATH BENEFIT (GMDB)--The minimum amount payable with
respect to the Investment Funds, upon the death of the Annuitant.
GUARANTEED MINIMUM INCOME BENEFIT (GMIB)-- A minimum amount of future
guaranteed lifetime income provided with respect to the Investment Funds.
EXPIRATION DATE--The date on which a Guarantee Period ends.
GUARANTEE PERIOD--Any of the periods of time ending on an Expiration Date that
are available for investment under the Certificates. Guarantee Periods may
also be referred to as Guaranteed Interest Rate Options ("GIROs").
GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods.
GUARANTEED RATE--The annual interest rate established for each allocation to a
Guarantee Period.
HR TRUST--The Hudson River Trust, a mutual fund in which the assets of
separate accounts of insurance companies are invested. Alliance Capital
Management L.P. (Alliance) is the adviser to HR Trust.
INVESTMENT FUNDS--The funds of the Separate Account that are available under
the Certificates.
INVESTMENT OPTIONS--The choices for investment: the Investment Funds and each
available Guarantee Period.
MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date.
PORTFOLIOS--The portfolios of HR Trust and EQ Trust that correspond to the
Investment Funds of the Separate Account.
PROCESSING DATE--The day when we deduct certain charges from the Annuity
Account Value. If the Processing Date is not a Business Day, it will be on the
next succeeding Business Day. The Processing Date will be once each year on
each anniversary of the Contract Date.
PROCESSING OFFICE--The address to which all contributions, written requests
(e.g., transfers, withdrawals, etc.) or other written communications must be
sent. See "Services We Provide" in Part 4.
SAI--The statement of additional information for the Separate Account under
the Accumulator.
SEPARATE ACCOUNT--Equitable Life's Separate Account No. 45.
TRANSACTION DATE--The Business Day we receive a contribution or a transaction
request providing all the information we need at our Processing Office. If
your contribution or request reaches our Processing Office on a non-Business
Day, or after the close of the Business Day, the Transaction Date will be the
next following Business Day. Transaction requests must be made in a form
acceptable to us.
VALUATION PERIOD--Each Business Day together with any preceding non-business
days.
4
<PAGE>
FEE TABLE
The purpose of this fee table is to assist you in understanding the various
costs and expenses you may bear directly or indirectly under the Certificate
so that you may compare them on the same basis with other similar products.
The table reflects both the charges of the Separate Account and the expenses
of HR Trust and EQ Trust. Charges for applicable taxes such as state or local
premium taxes may also apply. For a complete description of the charges under
the Certificate, see "Part 5: Deductions and Charges." For a complete
description of each Trust's charges and expenses, see the prospectuses for HR
Trust and EQ Trust.
As explained in Part 3, the Guarantee Periods are not a part of the Separate
Account and are not covered by the fee table and examples. The only charge
shown in the Table which will be deducted from amounts allocated to the
Guarantee Periods is the withdrawal charge. See "Part 5: Deductions and
Charges." A market value adjustment (either positive or negative) also may be
applicable as a result of a withdrawal, transfer or surrender of amounts from
a Guarantee Period. See "Part 3: The Guaranteed Period Account."
OWNER TRANSACTION EXPENSES (DEDUCTED FROM ANNUITY ACCOUNT VALUE)
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted upon surrender or
for certain withdrawals. The applicable withdrawal charge percentage is
determined by the Contract Year in which the withdrawal is made or the
Certificate is surrendered beginning with "Contract Year 1" with respect to
each contribution withdrawn or surrendered. For each contribution, the
Contract Year in which we receive that contribution is "Contract Year
<TABLE>
<CAPTION>
<S> <C>
1 ... 7.00%
2 ... 6.00
3 ... 5.00
4 ... 4.00
5 ... 3.00
6 ... 2.00
7 ... 1.00
8+ .. 0.00
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED BENEFIT EXPENSE (DEDUCTED FROM ANNUITY ACCOUNT VALUE AS A PERCENTAGE
OF GMDB THEN IN EFFECT)(2)
<S> <C>
COMBINED GMDB/GMIB (PLAN A)--AGES 20 TO 75 ....................................... 0.45%
GMDB ONLY (PLAN B)--AGES 20 TO 75 ................................................ 0.20%
GMDB ONLY (PLAN B)--AGES 76 TO 83 ................................................ 0.45%
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT FUND)
MORTALITY AND EXPENSE RISKS ...................................................... 0.90%
ADMINISTRATION(3) ................................................................ 0.25%
-------
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES .......................................... 1.15%
=======
</TABLE>
- ------------
See footnotes on next page.
5
<PAGE>
HR TRUST AND EQ TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS
IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIOS
---------------------------------------------------------------
(ALLIANCE) (ALLIANCE) (ALLIANCE) (ALLIANCE)
CONSERVATIVE GROWTH GROWTH & COMMON (ALLIANCE)
HR TRUST INVESTORS INVESTORS INCOME STOCK GLOBAL
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investment Advisory Fee x.xx% 0.52% x.xx% 0.36% 0.53%
Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses x.xx% 0.07% x.xx% 0.02% 0.08%
-------------- ----------- ---------- ---------- ----------
TOTAL HR TRUST ANNUAL
EXPENSES(5) x.xx% 0.84% x.xx% 0.63% 0.86%
============== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
(ALLIANCE)
(ALLIANCE) (ALLIANCE) (ALLIANCE) (ALLIANCE) INTERMEDIATE
(ALLIANCE) AGGRESSIVE SMALL EQUITY MONEY GOVT.
HR TRUST INTERNATIONAL STOCK CAP GROWTH INDEX MARKET SECURITIES
---------- ------------ ----------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory Fee x.xx% 0.46% x.xx% x.xx% 0.40% x.xx%
Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses x.xx% 0.02% x.xx% x.xx% 0.02% x.xx%
---------- ------------ ----------- ---------- ---------- -------------
TOTAL HR TRUST ANNUAL
EXPENSES(5) x.xx% 0.73% x.xx% x.xx% 0.67% x.xx%
========== ============ =========== ========== =============
</TABLE>
<TABLE>
<CAPTION>
T. ROWE EQ/PUTNAM
PRICE T. ROWE GROWTH & EQ/PUTNAM EQ/PUTNAM
INTERNATIONAL PRICE EQUITY INCOME INTERNATIONAL INVESTORS EQ/PUTNAM
EQ TRUST STOCK INCOME VALUE EQUITY GROWTH BALANCED
-------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory Fee 0.75% 0.55% 0.55% 0.70% 0.55% 0.55%
Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.25% 0.05% 0.05% 0.25% 0.05% 0.10%
-------- -------------- ----------- ----------- ----------- -----------
TOTAL EQ TRUST ANNUAL
EXPENSES(6) 1.25% 0.85% 0.85% 1.20% 0.85% 0.90%
======== ============== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
WARBURG
MFS MORGAN PINCUS MERRILL
EMERGING STANLEY SMALL LYNCH
MFS GROWTH MARKETS COMPANY GLOBAL MERRILL LYNCH
EQ TRUST RESEARCH COMPANIES EQUITY VALUE ALLOCATION BASIC VALUE
---------- ----------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory Fee 0.55% 0.55% 1.15% 0.65% 0.70% 0.55%
Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.05% 0.05% 0.35% 0.10% 0.25% 0.05%
---------- ----------- --------- --------- ------------ -------------
TOTAL EQ TRUST ANNUAL
EXPENSES(6) 0.85% 0.85% 1.75% 1.00% 1.20% 0.85%
========== =========== ========= ========= ============ =============
</TABLE>
- ------------
Notes:
(1) Deducted upon a withdrawal with respect to amounts in excess of the 15%
free corridor amount, and upon a surrender. See "Part 5: Deductions and
Charges," "Withdrawal Charge." We reserve the right to impose an
administration charge of the lesser of $25 and 2.0% of the amount
withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. See "Withdrawal Processing Charge" also in Part 5.
(2) This charge is deducted annually on each Processing Date. See "Combined
GMDB/GMIB Benefit Charge (Plan A) and "GMDB Only Benefit Charge (Plan
B)" in Part 5.
(3) We reserve the right to increase this charge to an annual rate of 0.35%,
the maximum permitted under the Certificates.
(4) The Class IB shares of HR Trust and EQ Trust are subject to fees imposed
under distribution plans (herein, the "Rule 12b-1 Plan") adopted by HR
Trust and EQ Trust pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The Rule 12b-1 Plans provide that HR Trust and EQ Trust, on
behalf of each Portfolio, may pay annually up to 0.25% of the average
daily net assets of a Portfolio attributable to its Class IB shares in
respect of activities primarily intended to result in the sale of the
Class IB shares. The Rule 12b-1 Plan fee may be increased only by action
of the respective Board of Trustees of HR Trust and EQ Trust up to a
maximum of 0.50% per annum.
(5) The amounts shown for the Portfolios of HR Trust which began issuing
Class IB shares on October 2, 1996, are annualized. The investment
advisory fee for each Portfolio may vary from year to year depending
upon the average daily net assets of the respective Portfolio of HR
Trust. The maximum investment advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. The other
direct operating expenses will also fluctuate from year to year
depending on actual expenses. See "HR Trust Charges to Portfolios" in
Part 5.
(6) "Other Expenses" shown are based on estimated amounts (after expense
reimbursement or waiver) for the current fiscal year, as EQ Trust
commenced operations on . The investment advisory fee for each Portfolio
may vary from year to year depending upon the average daily net assets
of the respective Portfolio of EQ Trust. The maximum investment advisory
fees, however, cannot be increased without a vote of that Portfolio's
shareholders. The other direct operating expenses will also fluctuate
from year to year depending on actual expenses. See "EQ Trust Charges to
Portfolios" in Part 5.
6
<PAGE>
EXAMPLES
The examples below show the expenses that a hypothetical Certificate Owner
would pay under the Combined GMDB/GMIB Benefit (Plan A) and under the GMDB
Only Benefit (Plan B)--Ages 20 to 75 in the two situations noted below
assuming a $1,000 contribution invested in one of the Investment Funds listed,
and a 5% annual return on assets.(1)
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be greater
or less than those shown. Similarly, the annual rate of return assumed in the
examples is not an estimate or guarantee of future investment performance.
COMBINED GMDB/GMIB BENEFIT (PLAN A) ELECTION
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER YOUR
CERTIFICATE AT THE END
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH OF EACH PERIOD SHOWN, THE
PERIOD SHOWN, THE EXPENSES WOULD BE: EXPENSES WOULD BE:
1 YEAR 3 YEARS 1 YEAR 3 YEARS
------------ ----------- ------------------ -----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative
Investors $ $
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock
(Alliance) Global [TO BE INSERTED BY AMENDMENT]
(Alliance) International
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES:
(Alliance) Money Market
(Alliance) Intermediate Govt.
Securities
T. Rowe Price
Int'l Stock
T. Rowe Price
Equity Income
EQ/Putnam Growth
& Income Value
EQ/Putnam Int'l
Equity
EQ/Putnam
Investors Growth
EQ/Putnam
Balanced
MFS Research
MFS Emerging
Growth Companies
Morgan Stanley
Emerging Markets
Equity
Warburg Pincus
Small Company
Value
Merrill Lynch
Global Allocation
Merrill Lynch
Basic Value
</TABLE>
7
<PAGE>
GMDB ONLY BENEFIT (PLAN B) ELECTION
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER YOUR
CERTIFICATE AT THE END
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH OF EACH PERIOD SHOWN, THE
PERIOD SHOWN, THE EXPENSES WOULD BE: EXPENSES WOULD BE:
1 YEAR 3 YEARS 1 YEAR 3 YEARS
------------ ----------- ------------------ -----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative
Investors
(Alliance) Growth Investors
EQUITY SERIES:
(Alliance) Growth & Income
(Alliance) Common Stock
(Alliance) Global
(Alliance) International
(Alliance) Aggressive Stock
(Alliance) Small Cap Growth
(Alliance) Equity Index
FIXED INCOME SERIES: [TO BE INSERTED BY AMENDMENT]
(Alliance) Money Market
(Alliance) Intermediate Govt.
Securities
T. Rowe Price
Int'l Stock
T. Rowe Price
Equity Income
EQ/Putnam Growth
& Income Value
EQ/Putnam Int'l
Equity
EQ/Putnam
Investors Growth
EQ/Putnam
Balanced
MFS Research
MFS Emerging
Growth Companies
Morgan Stanley
Emerging Markets
Equity
Warburg Pincus
Small Company
Value
Merrill Lynch
Global Allocation
Merrill Lynch
Basic Value
</TABLE>
- --------------
Notes:
(1) The amount accumulated could not be paid in the form of an annuity at
the end of any of the periods shown in the examples. If the amount
applied to purchase an annuity is less than $2,000, or the initial
payment is less than $20 we may pay the amount to the payee in a single
sum instead of as payments under an annuity form. See "Income Annuity
Options" in Part 4. The examples do not reflect charges for applicable
taxes such as state or local premium taxes that may also be deducted in
certain jurisdictions.
8
<PAGE>
- -------------------------------------------------------------------------------
PART 1: EQUITABLE LIFE, THE SEPARATE ACCOUNT
AND THE INVESTMENT FUNDS
- -------------------------------------------------------------------------------
EQUITABLE LIFE
Equitable Life is a New York stock life insurance company that has been in
business since 1859. For more than 100 years we have been among the largest
life insurance companies in the United States. Our home office is located at
1290 Avenue of the Americas, New York, New York 10104. We are authorized to
sell life insurance and annuities in all fifty states, the District of
Columbia, Puerto Rico and the Virgin Islands. We maintain local offices
throughout the United States.
Equitable Life is a wholly owned subsidiary of The Equitable Companies
Incorporated (the Holding Company). The largest stockholder of the Holding
Company is AXA-UAP. AXA-UAP beneficially owns 63.9% of the outstanding shares
of common stock of the Holding Company plus convertible preferred stock. Under
its investment arrangements with Equitable Life and the Holding Company,
AXA-UAP is able to exercise significant influence over the operations and
capital structure of the Holding Company and its subsidiaries, including
Equitable Life. AXA-UAP, a French company, is the holding company for an
international group of insurance and related financial service companies.
Equitable Life, the Holding Company and their subsidiaries managed
approximately $239.8 billion of assets as of December 31, 1996.
SEPARATE ACCOUNT NO. 45
Separate Account No. 45 is organized as a unit investment trust, a type of
investment company, and is registered with the SEC under the Investment
Company Act of 1940, as amended (1940 Act). This registration does not involve
any supervision by the SEC of the management or investment policies of the
Separate Account. The Separate Account has several Investment Funds, each of
which invests in shares of a corresponding Portfolio of HR Trust and EQ Trust.
Because amounts allocated to the Investment Funds are invested in a mutual
fund, investment return and principal will fluctuate and the Certificate
Owner's Accumulation Units may be worth more or less than the original cost
when redeemed.
Under the New York Insurance Law, the portion of the Separate Account's assets
equal to the reserves and other liabilities relating to the Certificates are
not chargeable with liabilities arising out of any other business we may
conduct. Income, gains or losses, whether or not realized, from assets of the
Separate Account are credited to or charged against the Separate Account
without regard to our other income gains or losses. We are the issuer of the
Certificates, and the obligations set forth in the Certificates (other than
those of Annuitants or Certificate Owners) are our obligations.
In addition to contributions made under the Accumulator Certificates, we may
allocate to the Separate Account monies received under other contracts,
certificates, or agreements. Owners of all such contracts, certificates or
agreements will participate in the Separate Account in proportion to the
amounts they have in the Investment Funds that relate to their contracts,
certificates or agreements. We may retain in the Separate Account assets that
are in excess of the reserves and other liabilities relating to the
Accumulator Certificates or to other contracts, certificates or agreements, or
we may transfer the excess to our General Account.
We reserve the right, subject to compliance with applicable law; (1) to add
Investment Funds (or sub-funds of Investment Funds) to, or to remove
Investment Funds (or sub-funds) from, the Separate Account, or to add other
separate accounts; (2) to combine any two or more Investment Funds or
sub-funds thereof; (3) to transfer the assets we determine to be the share of
the class of contracts to which the Certificate belongs from any Investment
Fund to another Investment Fund; (4) to operate the Separate Account or any
Investment Fund as a management investment company under the 1940 Act, in
which case charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against the Separate Account; (5) to
deregister the Separate Account under the 1940 Act, provided that such action
conforms with the requirements of applicable law; (6) to restrict or eliminate
any voting rights as to the Separate Account; and (7) to cause one or more
Investment Funds to invest some or all of their assets in one or more other
trusts or investment companies. If any changes are made that result in a
material change in the underlying investment policy of an Investment Fund, you
will be notified as required by law.
HR TRUST
HR Trust is an open-end diversified management investment company, more
commonly called a mu-
9
<PAGE>
tual fund. As a "series" type of mutual fund, it issues several different
series of stock, each of which relates to a different Portfolio of HR Trust.
HR Trust commenced operations in January 1976 with a predecessor of its Common
Stock Portfolio. HR Trust does not impose a sales charge or "load" for buying
and selling its shares. All dividend distributions to HR Trust are reinvested
in full and fractional shares of the Portfolio to which they relate.
Investment Funds that invest in Portfolios of HR Trust, purchase Class IB
shares of a corresponding Portfolio of HR Trust. More detailed information
about HR Trust, its investment objectives, policies, restrictions, risks,
expenses, the Rule 12b-1 Plan relating to Class IB shares, and all other
aspects of its operations appears in its prospectus which accompanies this
prospectus or in its statement of additional information.
HR TRUST'S MANAGER AND ADVISER
HR Trust is managed and advised by Alliance Capital Management L.P.
(Alliance), which is registered with the SEC as an investment adviser under
the 1940 Act. Alliance, a publicly-traded limited partnership, is indirectly
majority-owned by Equitable Life. On December 31, 1996, Alliance was managing
approximately $182.8 billion in assets. Alliance acts as an investment adviser
to various separate accounts and general accounts of Equitable Life and other
affiliated insurance companies. Alliance also provides management and
consulting services to mutual funds, endowment funds, insurance companies,
foreign entities, qualified and non-tax qualified corporate funds, public and
private pension and profit-sharing plans, foundations and tax-exempt
organizations.
Alliance's record as an investment manager is based, in part, on its ability
to provide a diversity of investment services to domestic, international and
global markets. Alliance prides itself on its ability to attract and retain a
quality, professional work force. Alliance employs more than 194 investment
professionals, including 83 research analysts. Portfolio managers have an
average investment experience of more than 15 years.
Alliance's main office is located at 1345 Avenue of the Americas, New York,
New York 10105.
EQ TRUST
EQ Trust is an open-end management investment company. As a "series type" of
mutual fund, EQ Trust issues different series of stock, each of which relates
to a different Portfolio of EQ Trust. EQ Trust commenced operations on
. EQ Trust does not impose a sales charge or "load" for
buying and selling its shares. All dividend distributions to EQ Trust are
reinvested in full and fractional shares of the Portfolio to which they relate.
Investment Funds that invest in Portfolios of EQ Trust, purchase Class IB
shares of a corresponding Portfolio of EQ Trust. More detailed information
about EQ Trust, its investment objectives, policies and restrictions, risks,
expenses, the Rule 12b-1 Plan relating to the Class IB shares, and all other
aspects of its operations appears in its prospectus which accompanies this
prospectus and in its statement of additional information.
EQ TRUST'S MANAGER AND ADVISERS
EQ Trust is managed by EQ Financial Consultants, Inc. (EQ Financial) which,
subject to supervision and direction of the Trustees of EQ Trust, has overall
responsibility for the general management and administration of EQ Trust. EQ
Financial is an investment adviser registered under the 1940 Act, and a
broker-dealer registered under the Exchange Act. EQ Financial is a Delaware
corporation and an indirect, wholly-owned subsidiary of Equitable Life.
EQ Financial has entered into investment advisory agreements with T. Rowe
Price Associates, Inc., Putnam Investment Management, Inc., Massachusetts
Financial Services Company, Morgan Stanley Asset Management, Inc., Warburg,
Pincus Counsellors, Inc., and Merrill Lynch Asset Management, L.P., each of
which serves as an adviser to one or more of the Portfolios of EQ Trust.
10
<PAGE>
INVESTMENT POLICIES AND OBJECTIVES OF HR TRUST'S PORTFOLIOS AND EQ TRUST'S
PORTFOLIOS
Each Portfolio has a different investment objective which it tries to achieve
by following separate investment policies. The policies and objectives of each
Portfolio will affect its return and its risks. There is no guarantee that
these objectives will be achieved. Set forth below is a summary of the
investment policy and objective for each Portfolio. This summary is qualified
in its entirety by reference to the prospectuses for HR Trust and EQ Trust,
both of which accompany this prospectus. Please read the prospectuses for each
of the trusts carefully before investing.
The policies and objectives of HR Trust's Portfolios may be summarized as
follows:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ------------------------------ -------------------------------------------------------- -----------------------------
<S> <C> <C>
ASSET ALLOCATION SERIES:
(Alliance) Conservative Diversified mix of publicly-traded, fixed-income and High total return without, in
Investors equity securities; asset mix and security selection are the adviser's opinion, undue
primarily based upon factors expected to reduce risk. risk to principal
The Portfolio is generally expected to hold
approximately 70% of its assets in fixed income
securities and 30% in equity securities.
(Alliance) Growth Investors Diversified mix of publicly-traded, fixed-income and High total return consistent
equity securities; asset mix and security selection with the adviser's
based upon factors expected to increase possibility of determination of reasonable
high long-term return. The Portfolio is generally risk
expected to hold approximately 70% of its assets in
equity securities and 30% in fixed income securities.
EQUITY SERIES:
(Alliance) Growth & Income Primarily income producing common stocks and securities High total return through a
convertible into common stocks. combination of current income
and capital appreciation
(Alliance) Common Stock Primarily common stock and other equity-type Long-term growth of capital
instruments. and increasing income
(Alliance) Global Primarily equity securities of non-United States as well Long-term growth of capital
as United States companies.
(Alliance) International Primarily equity securities selected principally to Long-term growth of
permit participation in non-United States companies with capital (Alliance)
prospects for growth.
(Alliance) Aggressive Stock Primarily common stocks and other equity-type securities Long-term growth
of capital issued by quality small and intermediate
sized companies with strong growth prospects and in
covered options on those securities.
(Alliance) Small Cap Growth Primarily U.S. common stock and other equity type Long-term growth of capital
securities issued by small companies with favorable
growth prospects.
11
<PAGE>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ------------------------------ -------------------------------------------------------- -----------------------------
(Alliance) Equity Index Selected securities in the Standard & Poor's 500 Index Total return (before expenses)
(the "Index") which the advisor believes will, in the that approximates the total
aggregate, approximate the performance results of the return performance of the
Index Index (including reinvestment
of dividends) at risk level
consistent with that of the
Index
FIXED INCOME SERIES:
(Alliance) Money Market Primarily high quality U.S. dollar denominated money High level of current income
market instruments. while preserving assets and
maintaining liquidity
(Alliance) Intermediate Primarily debt securities issued or guaranteed by the High current income
Government Securities U.S. government, its agencies and instrumentalities. consistent with relative
Each investment will have a final maturity of not more stability of principal
than 10 years or a duration not exceeding that of a
10-year Treasury note.
</TABLE>
The policies and objectives of EQ Trust's Portfolios may be summarized as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
T. Rowe Price International Primarily common stocks of established non-United Long-term growth of capital
Stock States companies.
T. Rowe Price Equity Income Primarily dividend paying common stocks of Substantial dividend income
established companies. and also capital appreciation
EQ/Putnam Growth & Income Primarily common stocks that offer potential for Capital growth and,
Value capital growth and may, consistent with the secondarily, current income
Portfolio's investment objective, invest in common
stocks that offer potential for current income.
EQ/Putnam International Equity Primarily a diversified portfolio of equity Capital appreciation
securities of companies located outside the United
States.
EQ/Putnam Investors Growth Primarily common stocks in view of the Portfolio Long-term growth of capital
adviser's belief that equity ownership affords the and any increased income that
best opportunity for capital growth over the long results from this growth
term.
EQ/Putnam Balanced A well-diversified portfolio of stocks and bonds Balanced investment
that will produce both capital growth and current
income.
MFS Research A substantial portion of assets invest in common Long-term growth of capital
stock or securities convertible into common stock of and future income
companies believed by the Portfolio adviser to
possess better than average prospects for long-term
growth. A smaller proportion of assets may invest in
bonds, short-term debt obligations, preferred stocks
or common stocks whose principal characteristic is
income production rather than growth.
12
<PAGE>
Portfolio Investment Policy Objective
- ------------------------------ ----------------------------------------------------- -----------------------------
MFS Emerging Growth Companies Primarily (i.e., at least 80% of its assets Long-term growth of capital
normal circumstances) in common stocks of emerging
growth companies that the Portfolio adviser believes
are early in their life cycle but which have the
potential to become major enterprises.
Morgan Stanley Emerging Primarily equity securities of emerging market Long-term capital
Markets Equity country issuers. appreciation
Warburg Pincus Small Company Primarily in a portfolio of equity securities of Long-term capital
Value small capitalization companies (i.e., companies appreciation
having market capitalizations of $1 billion or less
at the time of initial purchase) that the Portfolio
adviser considers to be relatively undervalued.
Merrill Lynch Global Fully-managed investment policy utilizing United High total investment return
Allocation States and foreign equity, debt and money market consistent with prudent risk
securities the combination of which will be varied
from time to time both with respect to types of
securities and markets in response to changing market
and economic trends.
Merrill Lynch Basic Value Investment in securities, primarily equities, that Capital appreciation and,
the Portfolio adviser believes are undervalued and secondarily, income
therefore represent basic investment value.
</TABLE>
13
<PAGE>
- ------------------------------------------------------------------------------
PART 2: INVESTMENT PERFORMANCE
- -------------------------------------------------------------------------------
This Part presents performance data for each of the Investment Funds,
calculated by two methods. The first method, used in calculating the data in
the tables under "Standardized Performance Data," reflects all applicable fees
and charges, but not the charge for tax such as premium taxes.
The second method, used in calculating the data in the tables under "Rate of
Return Data for Investment Funds," also reflects all applicable fees and
charges, but not the withdrawal charge, the combined GMDB/GMIB, if applicable,
charge, or the charge for tax such as premium taxes. These additional charges,
if applicable, would effectively reduce the rates of return credited to a
particular Certificate.
HR Trust Portfolios
The performance data shown below for the Investment Funds investing in Class
IB shares of HR Trust Portfolios are based on the actual investment results of
the Portfolios, and have been adjusted for the fees and charges applicable
under the Certificates. However, the investment results prior to October 1996,
when Class IB shares were not available, reflect the performance of the Class
IA shares of Portfolios of HR Trust, without adjustment to reflect Rule 12b-1
fees. The Class IA shares are not subject to Rule 12b-1 fees, but are
otherwise identical in the Class IB shares. The Rule 12b-1 fees would
effectively reduce such investment performance.
The performance data for the Money Market and Common Stock Investment Funds
that invest in corresponding HR Trust Portfolios, for periods prior to March
22, 1985, reflect the investment results of two open-end management separate
accounts (the "predecessor separate accounts") which were reorganized in unit
investment trust form. The "Since Inception" figures for these Investment
Funds are based on the date of inception of the predecessor separate accounts.
These performance data have been adjusted to reflect the maximum investment
advisory fee payable for the corresponding Portfolio of HR Trust, as well as
an assumed charge of 0.06% for direct operating expenses.
EQ Trust Portfolios
The Investment Funds of the Separate Account that invest in Class IB shares
Portfolios of EQ Trust have only recently been established and no Certificates
funded by those Investment Funds have been issued as of the date of this
Prospectus. EQ Trust commenced operations on May , 1997. The performance data
shown in the tables for Investment Funds investing in Class IB shares of EQ
Trust Portfolios are presented on a hypothetical basis that reflects the
actual investment experience of publicly available mutual funds that are
managed by the respective EQ Trust Portfolio advisers. These public funds have
investment objectives, policies, strategies and risks substantially similar to
those of the corresponding Portfolios of EQ Trust. The performance data shown
reflect the estimated expenses of EQ Trust Portfolios all of the fees and
charges that would have been made under the Certificates as if the Investment
Funds and the Portfolios had been in existence for the periods shown. The public
funds performance data shown in the tables are solely for illustrative purposes,
because the Portfolios themselves have no prior performance history.
The results shown in the tables are not an estimate or guarantee of future
investment performance, and do not reflect the actual experience of amounts
invested under a particular Certificate.
See "Part 3: The Guaranteed Period Account" for information on the Guaranteed
Period Account.
STANDARDIZED PERFORMANCE DATA
The standardized performance data in the following tables illustrate the
average annual total return of the Investment Funds over the periods shown,
assuming a single initial contribution of $1,000 and the surrender of the
Certificate at the end of each period. These tables (which reflect the first
calcu lation method described above) are prepared in a manner prescribed by
the SEC for use when we advertise the performance of the Separate Account. An
Investment Fund's average annual total return is the annual rate of growth of
the Investment Fund that would be necessary to achieve the ending value of a
contribution kept in the Investment Fund for the period specified.
Each calculation assumes that the $1,000 contribution was allocated to only
one Investment Fund, no transfers or subsequent contributions were made and no
amounts were allocated to any other Investment Option under the Certificate.
In order to calculate annualized rates of return, we divide the Cash Value of
a Certificate which is surrendered on December 31, 1996 by the $1,000
contribution made at the beginning of each period illustrated. The result of
that calculation is the total growth rate for the period. Then we annualize
that growth rate to obtain the average annual percentage increase (decrease)
during the period shown. When we "annualize," we assume that a single rate of
return applied each year during the period will produce the ending value,
taking into account the effect of compounding.
14
<PAGE>
AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON
DECEMBER 31, 1996*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION
- ------------------------------------ ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
HR TRUST**
- ------------------------------------
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors xx.xx% xx.xx% xx.xx% -- xx.xx%
(Alliance) Growth Investors xx.xx xx.xx xx.xx -- xx.xx
EQUITY SERIES: [To be inserted by amendment]
(Alliance) Growth & Income xx.xx xx.xx -- -- xx.xx
(Alliance) Common Stock xx.xx xx.xx xx.xx xx.xx% xx.xx
(Alliance) Global xx.xx xx.xx xx.xx -- xx.xx
(Alliance) International xx.xx -- -- -- xx.xx
(Alliance) Aggressive Stock xx.xx xx.xx xx.xx xx.xx xx.xx
(Alliance) Small Cap Growth xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(Alliance) Money Market xx.xx xx.xx xx.xx xx.xx xx.xx
(Alliance) Intermediate Govt.
Securities xx.xx xx.xx xx.xx -- xx.xx
EQ TRUST***
- -----------
T. Rowe Price
Int'l Stock xx.xx -- -- -- xx.xx
T. Rowe Price
Equity Income xx.xx -- -- -- xx.xx
EQ/Putnam Growth
& Income Value xx.xx -- -- -- xx.xx
EQ/Putnam Int'l
Equity xx.xx -- -- -- xx.xx
EQ/Putnam
Investors Growth xx.xx -- -- -- xx.xx
[to be inserted by amendment]
EQ/Putnam
Balanced xx.xx -- -- -- xx.xx
MFS Research xx.xx -- -- -- xx.xx
MFS Emerging
Growth Companies xx.xx -- -- -- xx.xx
Morgan Stanley
Emerging Markets
Equity xx.xx -- -- -- xx.xx
Warburg Pincus
Small Company
Value xx.xx -- -- -- xx.xx
Merrill Lynch
Global Allocation xx.xx -- -- -- xx.xx
Merrill Lynch
Basic Value xx.xx -- -- -- xx.xx
</TABLE>
- ------------
* See footnotes on next page.
15
<PAGE>
The tables below illustrate the growth of an assumed investment of $1,000,
with fees and charges deducted on the standardized basis described above for
the first method of calculation.
GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1996*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION
- ------------------------------------ ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
HR TRUST**
- -----------
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors $x,xxx $x,xxx $x,xxx -- $x,xxx
(Alliance) Growth Investors x,xxx x,xxx x,xxx -- x,xxx
EQUITY SERIES: [to be inserted by amendment]
(Alliance) Growth & Income x,xxx x,xxx -- -- x,xxx
(Alliance) Common Stock x,xxx x,xxx x,xxx $x,xxx x,xxx
(Alliance) Global x,xxx x,xxx x,xxx -- x,xxx
(Alliance) International x,xxx -- -- -- x,xxx
(Alliance) Aggressive Stock x,xxx x,xxx x,xxx x,xxx x,xxx
(Alliance) Small Cap Growth x,xxx x,xxx x,xxx x,xxx x,xxx
(Alliance) Equity Index x,xxx x,xxx x,xxx x,xxx x,xxx
FIXED INCOME SERIES:
(Alliance) Money Market $x,xxx $x,xxx $x,xxx $x,xxx $x,xxx
(Alliance) Intermediate Govt.
Securities x,xxx x,xxx x,xxx -- x,xxx
EQ TRUST***
- -----------
T. Rowe Price
Int'l Stock x,xxx -- -- -- x,xxx
T. Rowe Price
Equity Income x,xxx -- -- -- x,xxx
EQ/Putnam Growth
& Income Value x,xxx -- -- -- x,xxx
EQ/Putnam Int'l
Equity x,xxx -- -- -- x,xxx
EQ/Putnam
Investors Growth x,xxx -- -- -- x,xxx
[to be inserted by amendment]
EQ/Putnam
Balanced x,xxx -- -- -- x,xxx
MFS Research x,xxx -- -- -- x,xxx
MFS Emerging
Growth Companies x,xxx -- -- -- x,xxx
Morgan Stanley
Emerging Markets
Equity x,xxx -- -- -- x,xxx
Warburg Pincus
Small Company
Value x,xxx -- -- -- x,xxx
Merrill Lynch
Global Allocation x,xxx -- -- -- x,xxx
Merrill Lynch
Basic Value x,xxx -- -- -- x,xxx
</TABLE>
- ------------
* The tables reflect charges under a Certificate with the 0.45% combined
GMDB/GMIB charge.
** The "Since Inception" dates for the Portfolios of HR Trust are as
follows: (Alliance) Conservative Investors (October 2, 1989);
(Alliance) Growth Investors (October 2, 1989); (Alliance) Growth &
Income (October 1, 1993); (Alliance) Common Stock (January 13, 1976);
(Alliance) Global (August 27, 1987); (Alliance) International (April 3,
1995); (Alliance) Aggressive Stock (January 27, 1986); (Alliance) Small
Cap Growth ( ); (Alliance) Equity Index ( ); (Alliance) Money Market
(July 13, 1981); and (Alliance) Intermediate Government Securities
(April 1, 1991).
*** The "Since Inception" date for the Portfolios of EQ Trust is . The
publicly available fund performance data reflected in the tables for EQ
Trust Portfolios are based on the actual performance of mutual funds
comparable to the Portfolios and do not reflect performance of the
Portfolios themselves.
16
<PAGE>
RATE OF RETURN DATA FOR INVESTMENT FUNDS
The following tables (which reflect the second calculation method described
above) provide you with information on rates of return on an annualized,
cumulative and year-by-year basis.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of
return reflect performance over a stated period of time. Annualized rates of
return represent the annual rate of growth that would have produced the same
cumulative return, if performance had been constant over the entire period.
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. Nor do they reflect other charges such as the mortality and
expense risks charge and the administration charge, or any withdrawal charge
under the Certificates. Comparisons with these benchmarks, therefore, are of
limited use. We include them because they are widely known and may help you to
understand the universe of securities from which each Portfolio is likely to
select its holdings. Benchmark data reflect the reinvestment of dividend
income.
PORTFOLIO INCEPTION DATES AND COMPARATIVE BENCHMARKS:
Asset Allocation Series:
(ALLIANCE) CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
(ALLIANCE) GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate
Bond Index and 70% Standard & Poor's 500 Index.
Equity Series:
(ALLIANCE) GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index
and 25% Value Line Convertible Index.
(ALLIANCE) COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index.
(ALLIANCE) GLOBAL: August 27, 1987; Morgan Stanley Capital International
World Index.
(ALLIANCE) INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International
Europe, Australia, Far East Index.
(ALLIANCE) AGGRESSIVE STOCK: January 27, 1986; 50% Standard & Poor's Mid-Cap
Total Return Index and 50% Russell 2000 Small Stock Index.
(ALLIANCE) SMALL CAP GROWTH: [to be inserted by amendment]
(ALLIANCE) EQUITY INDEX: [to be inserted by amendment]
Fixed Income Series:
(ALLIANCE) MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill
Index.
(ALLIANCE) INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman
Intermediate Government Bond Index.
T. ROWE PRICE INT'L STOCK: [to be inserted by amendment]
T. ROWE PRICE EQUITY INCOME: [to be inserted by amendment]
EQ/PUTNAM INT'L EQUITY: [to be inserted by amendment]
EQ/PUTNAM INVESTORS GROWTH & INCOME VALUE: [to be inserted by amendment]
EQ/PUTNAM BALANCED: [to be inserted by amendment]
MFS RESEARCH: [to be inserted by amendment]
MFS EMERGING GROWTH COMPANIES: [to be inserted by amendment]
MORGAN STANLEY EMERGING MARKETS: [to be inserted by amendment]
WARBURG PINCUS SMALL COMPANY VALUE: [to be inserted by amendment]
MERRILL LYNCH GLOBAL ALLOCATION: [to be inserted by amendment]
MERRILL LYNCH BASIC VALUE: [to be inserted by amendment]
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
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 Accumulator performance relative to other variable
annuity products.
17
<PAGE>
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% -- -- xx.xx%
Lipper Income xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(ALLIANCE) GROWTH INVESTORS xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Flexible Portfolio xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
EQUITY SERIES: [to be inserted by amendment]
(ALLIANCE) GROWTH & INCOME xx.xx xx.xx -- -- -- xx.xx
Lipper Growth & Income xx.xx xx.xx -- -- -- xx.xx
Benchmark xx.xx xx.xx -- -- -- xx.xx
(Alliance) COMMON STOCK xx.xx xx.xx xx.xx xx.xx% xx.xx% xx.xx
Lipper Growth xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Global xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(Alliance) International xx.xx -- -- -- -- xx.xx
Lipper International xx.xx -- -- -- -- xx.xx
Benchmark xx.xx -- -- -- -- xx.xx
(ALLIANCE) Aggressive Stock xx.xx xx.xx xx.xx xx.xx -- xx.xx
Lipper Small Company Growth xx.xx xx.xx xx.xx xx.xx -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx -- xx.xx
(ALLIANCE) SMALL CAP GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Standard & Poor's 500
Index xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES: [to be inserted by amendment]
(ALLIANCE) MONEY MARKET xx.xx xx.xx xx.xx xx.xx% xx.xx xx.xx
Lipper Money Market xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERMEDIATE
GOVERNMENT SECURITIES xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Gen. U.S. Government xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
T. ROWE PRICE
INT'L STOCK xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE
EQUITY INCOME xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
18
<PAGE>
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM GROWTH
& INCOME VALUE xx.xx% -- -- -- -- xx.xx%
Benchmark xx.xx xx.xx% xx.xx% xx.xx% xx.xx% xx.xx
EQ/PUTNAM INT'L
EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
INVESTORS GROWTH xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
BALANCED xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS RESEARCH xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
[to be inserted by amendment]
MFS EMERGING
GROWTH COMPANIES xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MORGAN STANLEY
EMERGING MARKETS
EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
WARBURG PINCUS
SMALL COMPANY
VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
GLOBAL ALLOCATION xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
BASIC VALUE xx.xx -- -- -- -- xx.xx
</TABLE>
- ------------
* See footnotes on next page.
19
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% -- -- xx.xx%
Lipper Income xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(ALLIANCE) GROWTH INVESTORS xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Flexible Portfolio xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
EQUITY SERIES: [to be inserted by amendment]
(ALLIANCE) GROWTH & INCOME xx.xx xx.xx -- -- -- xx.xx
Lipper Growth & Income xx.xx xx.xx -- -- -- xx.xx
Benchmark xx.xx xx.xx -- -- -- xx.xx
(ALLIANCE) COMMON STOCK xx.xx xx.xx xx.xx xx.xx% xx.xx% xx.xx
Lipper Growth xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Global xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
(ALLIANCE) INTERNATIONAL xx.xx -- -- -- -- xx.xx
Lipper International xx.xx -- -- -- -- xx.xx
Benchmark xx.xx -- -- -- -- xx.xx
(ALLIANCE) AGGRESSIVE STOCK xx.xx xx.xx xx.xx xx.xx -- xx.xx
Lipper Small Company Growth xx.xx xx.xx xx.xx xx.xx -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx -- xx.xx
(ALLIANCE) SMALL CAP GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Standard & Poor's 500
Index xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(ALLIANCE) MONEY MARKET xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Lipper Money Market xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) INTERMEDIATE
GOVERNMENT SECURITIES xx.xx xx.xx xx.xx -- -- xx.xx
Lipper Gen. U.S. Government xx.xx xx.xx xx.xx -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx -- -- xx.xx
</TABLE>
20
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
---------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
T. ROWE PRICE
INT'L STOCK xx.xx% -- -- -- -- xx.xx%
Benchmark xx.xx xx.xx% xx.xx% xx.xx% xx.xx% xx.xx
T. ROWE PRICE
EQUITY INCOME xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM GROWTH
& INCOME VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INT'L
EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
INVESTORS GROWTH xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
BALANCED xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
[to be inserted by amendment]
MFS RESEARCH xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS EMERGING
GROWTH COMPANIES xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MORGAN STANLEY
EMERGING MARKETS
EQUITY xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
WARBURG PINCUS
SMALL COMPANY
VALUE xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
GLOBAL ALLOCATION xx.xx -- -- -- -- xx.xx
Benchmark xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
BASIC VALUE xx.xx -- -- -- -- xx.xx
</TABLE>
- ------------
* See footnotes below.
21
<PAGE>
YEAR-BY-YEAR RATES OF RETURN*
<TABLE>
<CAPTION>
1984 1985 1986 1987 1988 1989
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx%
(ALLIANCE) GROWTH
INVESTORS xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQUITY SERIES:
(ALLIANCE) GROWTH &
INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) COMMON
STOCK** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) International xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) Aggressive
Stock xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) SMALL CAP
GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(ALLIANCE) MONEY
MARKET** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE)
INTERMEDIATE
GOVERNMENT
SECURITIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE
INT'L STOCK xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE
EQUITY INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM GROWTH
& INCOME VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INT'L
EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
INVESTORS GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
BALANCED xx.xx xx.xx xx.xx [TO BE INSERTED BY AMENDMENT]
MFS RESEARCH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS EMERGING
GROWTH COMPANIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MORGAN STANLEY
EMERGING MARKETS
EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
WARBURG PINCUS
SMALL COMPANY
VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
GLOBAL ALLOCATION xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
BASIC VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
(ALLIANCE) CONSERVATIVE
INVESTORS xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx% xx.xx %
(ALLIANCE) GROWTH
INVESTORS xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQUITY SERIES:
(ALLIANCE) GROWTH &
INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) COMMON
STOCK** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) GLOBAL xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) International xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) Aggressive
Stock xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) SMALL CAP
GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE) EQUITY INDEX xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
FIXED INCOME SERIES:
(ALLIANCE) MONEY
MARKET** xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
(ALLIANCE)
INTERMEDIATE
GOVERNMENT
SECURITIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE
INT'L STOCK xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
T. ROWE PRICE
EQUITY INCOME xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM GROWTH
& INCOME VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM INT'L
EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
INVESTORS GROWTH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
EQ/PUTNAM
BALANCED xx.xx xx.xx xx.xx xx.xx xx.xx
MFS RESEARCH xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MFS EMERGING
GROWTH COMPANIES xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MORGAN STANLEY
EMERGING MARKETS
EQUITY xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
WARBURG PINCUS SMALL COMPANY
VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
GLOBAL ALLOCATION xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
MERRILL LYNCH
BASIC VALUE xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
[FN]
- ------------
* Returns do not reflect the withdrawal charge, the combined GMDB/GMIB
charge and any charge for tax such as premium taxes.
** Prior to 1984 the Year-by-Year Rates of Return were:
<TABLE>
<CAPTION>
1976 1977 1978 1979 1980 1981 1982 1983
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK xx.xx% xx.xx% xx.xx xx.xx% xx.xx% xx.xx% xx.xx% xx.xx%
MONEY MARKET xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx xx.xx
</TABLE>
22
<PAGE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may describe
general economic and market conditions affecting the Separate Account and,
each respective trust and may compare the performance of the Investment Funds
with (1) that of other insurance company separate accounts or mutual funds
included in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., VARDS or similar investment services that monitor the
performance of insurance company separate accounts or mutual funds, (2) other
appropriate indices of investment securities and averages for peer universes
of funds which are shown under "Benchmarks" and "Portfolio Inception Dates and
Comparative Benchmarks" in this Part 2 or (3) data developed by us derived
from such indices or averages. The Morningstar Variable Annuity/Life Report
consists of nearly 700 variable life and annuity funds, all of which report
their data net of investment management fees, direct operating expenses and
separate account charges. VARDS is a monthly reporting service that monitors
approximately 760 variable life and variable annuity funds on performance and
account information. Advertisements or other communications furnished to
present or prospective Certificate Owners may also include evaluations of an
Investment Fund or Portfolio by financial publications that are nationally
recognized such as Barron's, Morningstar's Variable Annuity Sourcebook,
Business Week, Chicago Tribune, Forbes, Fortune, Institutional Investor,
Investment Adviser, Investment Dealer's Digest, Investment Management Weekly,
Los Angeles Times, Money, Money Management Letter, Kiplinger's Personal
Finance, Financial Planning, National Underwriter, Pension & Investments, USA
Today, Investor's Daily, The New York Times, and The Wall Street Journal.
MONEY MARKET FUND AND INTERMEDIATE GOVERNMENT SECURITIES FUND YIELD
INFORMATION
The current yield and effective yield of the Money Market Fund and
Intermediate Government Securities Fund may appear in reports and promotional
material to current or prospective Certificate Owners.
Money Market Fund
Current yield for the Money Market Fund 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). "Effective yield" is calculated in a manner
similar to that used to calculate current yield, 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. Money Market Fund yields and effective yields assume
the deduction of all Certificate charges and expenses other than the
withdrawal charge, combined GMDB/GMIB charge and any charge for tax such as
premium tax. See "Part 4: Money Market Fund and Intermediate Government
Securities Fund Yield Information" in the SAI.
Intermediate Government Securities Fund
Current yield for the Intermediate Government Securities Fund 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 manner similar to that used to calculate current yield, 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 monthly.
Intermediate Government Securities Fund yields and effective yields assume the
deduction of all Certificate charges and expenses other than the withdrawal
charge, combined GMDB/GMIB charge and any charge for tax such as premium tax.
See "Part 4: Money Market Fund and Intermediate Government Securities Fund
Yield Information" in the SAI.
23
<PAGE>
- -------------------------------------------------------------------------------
PART 3: THE GUARANTEED PERIOD ACCOUNT
- -------------------------------------------------------------------------------
GUARANTEE PERIODS
Each amount allocated to a Guarantee Period and held to the Period's
Expiration Date accumulates interest at a Guaranteed Rate. The Guaranteed Rate
for each allocation is the annual interest rate applicable to new allocations
to that Guarantee Period, which was in effect on the Transaction Date for the
allocation. We may establish different Guaranteed Rates under different
classes of Certificates. We use the term GUARANTEED PERIOD AMOUNT to refer to
the amount allocated to and accumulated in each Guarantee Period. The
Guaranteed Period Amount is reduced or increased by any market value
adjustment as a result of withdrawals, transfers or charges (see below).
Guarantee Periods may also be referred to as GIROs.
Your Guaranteed Period Account contains the Guarantee Periods to which you
have allocated Annuity Account Value. On the Expiration Date of a Guarantee
Period, its Guaranteed Period Amount and its value in the Guaranteed Period
Account are equal. We call the Guaranteed Period Amount on an Expiration Date
the Guarantee Period's Maturity Value. We report the Annuity Account Value in
your Guaranteed Period Account to reflect any market value adjustment that
would apply if all Guaranteed Period Amounts were withdrawn as of the
calculation date. The Annuity Account Value in the Guaranteed Period Account
on any Business Day, therefore, will be the sum of the present value of the
Maturity Value in each Guarantee Period, using the Guaranteed Rate in effect
for new allocations to each such Guarantee Period on such date.
Guarantee Periods and Expiration Dates
We currently offer Guarantee Periods ending on February 15th for each of the
maturity years 1998 through 2007.
Not all Guarantee Periods will be available for Annuitants ages 76 and above.
See "Allocation of Contributions" in Part 4. Also, the Guarantee Periods may
not be available for investment in all states. As Guarantee Periods expire we
expect to add maturity years so that generally 10 are available at any time.
We will not accept allocations to a Guarantee Period if, on the Transaction
Date:
o Such Transaction Date and the Expiration Date for such Guarantee Period
fall within the same calendar year.
o The Guaranteed Rate is 3%.
o The Guarantee Period has an Expiration Date beyond the February 15th
immediately following the Annuity Commencement Date.
Guaranteed Rates and Price Per $100 of Maturity Value
Because the Maturity Value of a contribution allocated to a Guarantee Period
can be determined at the time it is made, you can determine the amount
required to be allocated to a Guarantee Period in order to produce a target
Maturity Value (assuming no transfers or withdrawals are made and no charges
are allocated to the Guarantee Period). The required amount is the present
value of that Maturity Value at the Guaranteed Rate on the Transaction Date
for the contribution, which may also be expressed as the price per $100 of
Maturity Value on such Transaction Date.
Guaranteed Rates for new allocations as of April , 1997 and the related price
per $100 of Maturity Value for each currently available Guarantee Period were
as follows:
GUARANTEE
PERIODS WITH GUARANTEED
EXPIRATION DATE RATE AS OF PRICE
FEBRUARY 15TH OF APRIL , PER $100 OF
MATURITY YEAR 1997 MATURITY VALUE
- -------------------- -------------- ------------------
1998 x.xx% $xx.xx
1999 x.xx xx.xx
2000 x.xx xx.xx
2001 x.xx xx.xx
2002 x.xx xx.xx
2003 x.xx xx.xx
2004 x.xx xx.xx
2005 x.xx xx.xx
2006 x.xx xx.xx
2007 x.xx xx.xx
Allocation Among Guarantee Periods
The same approach as described above may also be used to determine the amount
which you would need to allocate to each Guarantee Period in order to create a
series of constant Maturity Values for two or more years.
For example, if you wish to have $100 mature on February 15th of each of years
1998 through 2002, then according to the above table the lump sum contribution
you would have to make as of April , 1997 would be $xxx.xx (i.e., the sum of
the
24
<PAGE>
price per $100 of Maturity Value for each maturity year from 1998 through
2002).
The above table is provided to illustrate the use of present value
calculations. It does not take into account the potential for charges to be
deducted or withdrawals or transfers from Guarantee Periods. Actual
calculations will also be based on Guaranteed Rates on each actual Transaction
Date, which may differ.
Options at Expiration Date
We will notify you on or before December 31st prior to the Expiration Date of
each Guarantee Period in which you have any Guaranteed Period Amount. You may
elect one of the following options to be effective at the Expiration Date,
subject to the restrictions set forth on the prior page and under "Allocation
of Contributions" in Part 4:
(a) to transfer the Maturity Value into any Guarantee Period we are then
offering, or into any of our Investment Funds; or
(b) to withdraw the Maturity Value (subject to any withdrawal charges
which may apply).
If we have not received your election as of the Expiration Date, the Maturity
Value in the expired Guarantee Period will be transferred into the Guarantee
Period with the earliest Expiration Date.
MARKET VALUE ADJUSTMENT FOR
TRANSFERS, WITHDRAWALS OR SURRENDER
PRIOR TO THE EXPIRATION DATE
Any withdrawal (including transfers, surrender and deductions) from a
Guarantee Period prior to its Expiration Date will cause any remaining
Guaranteed Period Amount for that Guarantee Period to be increased or
decreased by a market value adjustment. The amount of the adjustment will
depend on two factors: (a) the difference between the Guaranteed Rate
applicable to the amount being withdrawn and the Guaranteed Rate on the
Transaction Date for new allocations to a Guarantee Period with the same
Expiration Date, and (b) the length of time remaining until the Expiration
Date. In general, if interest rates have risen between the time when an amount
was originally allocated to a Guarantee Period and the time it is withdrawn,
the market value adjustment will be negative, and vice versa; and the longer
the period of time remaining until the Expiration Date, the greater the impact
of the interest rate difference. Therefore, it is possible that a significant
rise in interest rates could result in a substantial reduction in your Annuity
Account Value in the Guaranteed Period Account related to longer term
Guarantee Periods.
The market value adjustment (positive or negative) resulting from a withdrawal
of all funds from a Guarantee Period will be determined for each contribution
allocated to that Guarantee Period as follows:
(1) We determine the present value of the Maturity Value on the Transaction
Date as follows:
(a) We determine the Guaranteed Period Amount that would be payable on
the Expiration Date, using the applicable Guaranteed Rate.
(b) We determine the period remaining in your Guarantee Period (based on
the Transaction Date) and convert it to fractional years based on a
365 day year. For example three years and 12 days becomes 3.0329.
(c) We determine the current Guaranteed Rate which applies on the
Transaction Date to new allocations to the same Guarantee Period.
(d) We determine the present value of the Guaranteed Period Amount
payable at the Expiration Date, using the period determined in (b)
and the rate determined in (c).
(2) We determine the Guaranteed Period 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 Guarantee Period, which may be
positive or negative.
The market value adjustment (positive or negative) resulting from a withdrawal
(including any withdrawal charges) of a portion of the amount in a Guarantee
Period will be a percentage of the market value adjustment that would be
applicable upon a withdrawal of all funds from a Guarantee Period. This
percentage is determined by (i) dividing the amount of the withdrawal or
transfer from the Guarantee Period by (ii) the Annuity Account Value in such
Guarantee Period prior to the withdrawal or transfer. See Appendix I for an
example.
The Guaranteed Rate for new allocations to a Guarantee Period is the rate we
have in effect for this purpose even if new allocations to that Guarantee
Period would not be accepted at the time. This rate will not be less than 3%.
If we do not have a Guaranteed Rate in effect for a Guarantee Period to which
the "current Guaranteed Rate" in (1)(c) would apply, we will use the rate at
the next closest Expiration Date. If we are no longer offering new Guarantee
Periods, the "current Guaranteed Rate" will be determined in accordance with
our procedures then in effect. For purposes of calculating the market value
adjustment only, we reserve the right to add up to 0.25% to the current rate
in (1)(c) above.
25
<PAGE>
INVESTMENTS
Amounts allocated to Guarantee Periods will be held in a "nonunitized"
separate account established by Equitable Life under the laws of New York.
This separate account provides an additional measure of assurance that full
payment of amounts due under the Guarantee Periods will be made. Under the New
York Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the Certificates are not
chargeable with liabilities arising out of any other business we may conduct.
Investments purchased with amounts allocated to the Guaranteed Period Account
are the property of Equitable Life. Any favorable investment performance on
the assets held in the separate account accrues solely to Equitable Life's
benefit. Certificate Owners do not participate in the performance of the
assets held in this separate account. Equitable Life may, subject to
applicable state law, transfer all assets allocated to the separate account to
its general account. Regardless of whether assets supporting Guaranteed Period
Accounts are held in a separate account or our general account, all benefits
relating to the Annuity Account Value in the Guaranteed Period Account are
guaranteed by Equitable Life.
Equitable Life has no specific formula for establishing the Guaranteed Rates
for the Guarantee Periods. Equitable Life expects the rates to be influenced
by, but not necessarily correspond to, among other things, the yields on the
fixed income securities to be acquired with amounts that are allocated to the
Guarantee Periods at the time that the Guaranteed Rates are established. Our
current plans are to invest such amounts in fixed income obligations,
including corporate bonds, mortgage backed and asset backed securities and
government and agency issues having durations in the aggregate consistent with
those of the Guarantee Periods.
Although the foregoing generally describes Equitable Life's plans for
investing the assets supporting Equitable Life's obligations under the fixed
portion of the Certificates, Equitable Life is not obligated to invest those
assets according to any particular plan except as may be required by state
insurance laws, nor will the Guaranteed Rates Equitable Life establishes be
determined by the performance of the nonunitized separate account.
General Account
Our general account supports all of our policy and contract guarantees,
including those applicable to the Guaranteed Period Account, as well as our
general obligations. Amounts applied under the Life Contingent Annuity become
part of the general account. See "Systematic Withdrawals Plus Life Contingent
Annuity" in Part 4.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
applicable exemptions and exclusionary provisions, interests in the general
account have not been registered under the Securities Act of 1933, as amended
(1933 Act), nor is the general account an investment company under the 1940
Act. Accordingly, neither the general account nor the Life Contingent Annuity
is subject to regulation under the 1933 Act or the 1940 Act. However, the
market value adjustment interests under the Certificates are registered under
the 1933 Act.
We have been advised that the staff of the SEC has not made a review of the
disclosure that is included in this prospectus for your information that
relates to the general account (other than market value adjustment interests)
and the Life Contingent Annuity. The disclosure, however, may be subject to
certain generally applicable provisions of the Federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
26
<PAGE>
- ------------------------------------------------------------------------------
PART 4: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE
- ------------------------------------------------------------------------------
WHAT IS THE ACCUMULATOR?
The Accumulator Certificate is a non-qualified deferred annuity designed to
provide for retirement income at a future date through the investment of funds
on an after-tax basis. Generally, earnings will accumulate without being
subject to annual income tax, until withdrawn. Withdrawals made prior to age
59 1/2 may be subject to tax penalty.
When issued with the appropriate endorsement, an Accumulator Certificate may
be purchased by a plan qualified under Section 401(a) of the Code. Such
purchases may not be available in all states. Plan fiduciaries considering
purchase of a Certificate should read the important information in Appendix
II.
The provisions of your Certificate may be restricted by applicable laws or
regulations.
AVAILABILITY OF THE CERTIFICATES
The Certificates are available for Annuitant issue ages 20 through 83. These
Certificates may not be available in all states.
CONTRIBUTIONS UNDER THE CERTIFICATES
Your initial contribution must be at least $5,000.
Subsequent contributions may be made in an amount of at least $1,000 at any
time up until the Annuitant attains age 84. We may refuse to accept any
contributions if the sum of all contributions under all accumulation
Certificates with the same Annuitant would then total more than $1,500,000. We
reserve the right to limit aggregate contributions made after the first
Contract Year to 150% of first year contributions. We may also refuse to
accept any contribution if the sum of all contributions under all Equitable
Life annuity accumulation certificates/contracts that you own would then total
more than $2,500,000.
Contributions are credited as of the Transaction Date.
METHODS OF PAYMENT
Except as indicated below, all contributions must be made by check. All
contributions made by check must be drawn on a bank or credit union in the
U.S., in U.S. dollars and made payable to Equitable Life. All checks are
accepted subject to collection. All contributions should be sent to Equitable
Life at our Processing Office address designated for contributions.
Wire Transmittals
We will accept, by agreement with broker-dealers who use wire transmittals,
transmittal of initial contributions by wire order from the broker-dealer to
the Processing Office. Such transmittals must be accompanied by essential
information we require to allocate the contribution.
Contributions accepted by wire order will be invested at the value next
determined following receipt for contributions allocated to the Investment
Funds. Contributions allocated to the Guaranteed Period Account will receive
the Guaranteed Rate(s) in effect for the applicable Guarantee Period(s) on the
date contributions are received. Wire orders not accompanied by complete
information, may be retained for a period not exceeding five Business Days
while an attempt is made to obtain the required information. If the required
information cannot be obtained within those five Business Days, the Processing
Office will inform the broker-dealer, on behalf of the applicant, of the
reasons for the delay and return the contribution immediately to the
applicant, unless the applicant specifically consents to our retaining the
contribution until the required information is received by the Processing
Office.
Notwithstanding the acceptance by us of the wire order and the essential
information, however, a Certificate will not be issued until the receipt and
acceptance of a properly completed application. During the time from receipt
of the initial contribution until a signed application is received from the
Certificate Owner, no other financial transactions may be requested.
If an application is not received within ten days of receipt of the initial
contribution via wire order, or if an incomplete application is received and
cannot be completed within ten days of receipt of the initial contribution,
the amount of the initial contribution will be returned to the applicant.
After your Certificate has been issued, subsequent contributions may be
transmitted by wire.
ALLOCATION OF CONTRIBUTIONS
You have two options from which to choose for allocation of your
contributions: Self-Directed Allocation and Principal Assurance.
Self-Directed Allocation
You design your own investment program by allocating your contributions among
the Investment Options in any way you choose. Your contributions may be
allocated to one or up to all of the available
27
<PAGE>
Investment Options at any time. We allocate contributions among the Investment
Options according to your allocation percentages. Allocations must be in whole
percentages. Allocation percentages can be changed at any time by writing to
our Processing Office, or by telephone. The change will be effective on the
Transaction Date and will remain in effect for future contributions unless
another change is requested. Allocation of any contribution to the Guaranteed
Period Account is subject to the following restrictions.
o No more than 60% of any contribution may be allocated to the
Guaranteed Period Account.
o For Annuitants ages 76 and above, allocations may be made only to
Guarantee Periods with maturities of five years or less; however, in
no event may allocations be made to Guarantee Periods with maturities
beyond the February 15th immediately following the Annuity
Commencement Date.
Rebalancing--Rebalancing provides a convenient way for you to periodically
rebalance your Annuity Account Value to pre-selected percentages without
having to provide transfer instructions each time. You must have at least
$5,000 of Annuity Account Value at the time you elect this program. You elect
the rebalancing program by submitting your request in a form satisfactory to
us.
Under this program, your Annuity Account Value is rebalanced quarterly,
semi-annually, or annually to percentages you select and among Investment
Options you select. While this program is in effect you may still make other
transfer requests. However, if you make a transfer request you must provide
new rebalancing percentages, otherwise the rebalancing program will terminate.
You may change your rebalancing allocation percentages at any time.
Rebalancing may not be elected if the dollar cost averaging or the systematic
withdrawal option is in effect. If Guarantee Periods are included,
rebalancing may result in a market value adjustment.
You may cancel this program by submitting a request in a form satisfactory to
us.
Principal Assurance
This option (available for Annuitant issue ages 20 through 75) is designed to
assure that your Maturity Value in a specified Guarantee Period equals your
initial contribution, while at the same time allowing you to invest in the
Investment Funds. The maturity year you select for such specified Guaranteed
Period generally may not be later than 10 years nor earlier than seven years.
In order to accomplish this strategy, we will allocate a portion (equal to the
present value) of your initial contribution to a Guarantee Period based on the
year you select. See "Guaranteed Rates and Price Per $100 of Maturity Value"
in Part 3. You may allocate the balance of your contribution to the Investment
Funds in any way you choose. Such allocations to the Investment Funds must be
in whole percentages.
Principal Assurance may only be elected at issue of your Certificate and
assumes no withdrawals or transfers of the amount allocated to the specified
Guarantee Period.
Subsequent contributions must be allocated under "Self-Directed Allocation"
described above.
Allocations to the Investment Funds
A contribution allocated to an Investment Fund purchases Accumulation Units in
that Investment Fund based on the Accumulation Unit Value for that Investment
Fund computed on the Transaction Date.
Allocations to the Guaranteed Period Account
Contributions allocated to the Guaranteed Period Account will have the
Guaranteed Rate for the specified Guarantee Period offered on the Transaction
Date.
FREE LOOK PERIOD
You have the right to examine the Accumulator Certificate for a period of 10
days after you receive it, and to return it to us for a refund. You cancel it
by sending it to our Processing Office. The free look is extended if your
state requires a refund period of longer than 10 days. This right applies only
to the initial owner of a Certificate.
Your refund will equal the Annuity Account Value reflecting any investment
gain or loss, and any positive or negative market value adjustment, through
the date we receive your Certificate at our Processing Office. Some states may
require that we calculate the refund differently.
If Systematic Withdrawals Plus Life Contingent Annuity is elected in the
application for the Certificate, your refund will include any amount applied
under the Life Contingent Annuity (discussed below).
We follow these same procedures if you change your mind before you receive
your Certificate, but after a contribution has been made. See "Part 7: Tax
Aspects of the Certificates" for possible consequences of canceling your
Certificate during the free look period.
If you cancel your Certificate during the free look period, we may require
that you wait six months before you may apply for a Certificate with us again.
28
<PAGE>
ANNUITY ACCOUNT VALUE
Your Annuity Account Value is the sum of the amounts in the Investment
Options.
Annuity Account Value in Investment Funds
The Annuity Account Value in an Investment Fund on any Business Day is equal
to the number of Accumulation Units in that Investment Fund times the
Accumulation Unit Value for the Investment Fund for that date. The number of
Accumulation Units in an Investment Fund at any time is equal to the sum of
Accumulation Units purchased by contributions and transfers less the sum of
Accumulation Units redeemed for withdrawals, transfers or deductions for
charges.
The number of Accumulation Units purchased or sold in any Investment Fund
equals the dollar amount of the transaction divided by the Accumulation Unit
Value for that Investment Fund for the applicable Transaction Date.
The number of Accumulation Units will not vary because of any later change in
the Accumulation Unit Value. The Accumulation Unit Value varies with the
investment performance of the corresponding Portfolios of, which in turn
reflects the investment income and realized and unrealized capital gains and
losses of the Portfolios, as well as each trust's fees and expenses. The
Accumulation Unit Value is also stated after deduction of the Separate Account
asset charges relating to the Certificates. A description of the computation
of the Accumulation Unit Value is found in the SAI.
Annuity Account Value in Guaranteed Period
Account
The Annuity Account Value in the Guaranteed Period Account on any Business Day
will be the sum of the present value of the Maturity Value in each Guarantee
Period, using the Guaranteed Rate in effect for new allocations to such
Guarantee Period on such date. (This is equivalent to the Guaranteed Period
Amount increased or decreased by the full market value adjustment.) The
Annuity Account Value, therefore, may be higher or lower than the
contributions (less withdrawals) accumulated at the Guaranteed Rate. At the
Expiration Date the Annuity Account Value in the Guaranteed Period Account
will equal the Maturity Value. See "Part 3: The Guaranteed Period Account."
TRANSFERS AMONG INVESTMENT OPTIONS
At any time prior to the Annuity Commencement Date, you may transfer all or
portions of your Annuity Account Value among the Investment Options, subject
to the following restrictions.
o Transfers out of a Guarantee Period other than at the Expiration Date
will result in a market value adjustment. See "Part 3: The Guaranteed
Period Account."
o Transfers to Guarantee Periods are subject to the restrictions set
forth under "Guarantee Periods and Expiration Dates" in Part 3 and are
limited for Annuitant ages 76 and above. See "Allocation of
Contributions" above.
Transfer requests must be made directly to our Processing Office. Your request
for a transfer should specify your Certificate number, the amounts or
percentages to be transferred and the Investment Options to and from which the
amounts are to be transferred. Your transfer request may be in writing or by
telephone.
For telephone transfer requests, procedures have been established by Equitable
Life that are considered to be reasonable and are designed to confirm that
instructions communicated by telephone are genuine. Such procedures include
requiring certain personal identification information prior to acting on
telephone instructions and providing written confirmation. In light of the
procedures established, Equitable Life will not be liable for following
telephone instructions that it reasonably believes to be genuine.
We may restrict, in our sole discretion, the use of an agent acting under a
power of attorney, such as a market timer, on behalf of more than one
Certificate Owner to effect transfers. Any agreements to use market timing
services to effect transfers are subject to our rules then in effect and must
be on a form satisfactory to us.
A transfer request will be effective on the Transaction Date and the transfer
to or from Investment Funds will be made at the Accumulation Unit Value next
computed after the Transaction Date. All transfers will be confirmed in
writing.
DOLLAR COST AVERAGING
For Certificate Owners who (at issue of the Certificate) want to dollar cost
average their entire initial contribution from the Money Market Fund into the
other Investment Funds over a period of twelve months, we offer a program
under which the charges normally deducted from Investment Funds will not be
deducted. See "Charges Deducted from the Investment Funds" in Part 5. We also
offer dollar cost averaging under the program described below.
If you have at least $5,000 of Annuity Account Value in the Money Market Fund,
you may choose to have a specified dollar amount or percentage of your Annuity
Account Value transferred from the Money Market Fund to other Investment Funds
on a
29
<PAGE>
monthly, quarterly or annual basis. This program may be elected at any time.
The main objective of dollar cost averaging is to attempt to shield your
investment from short term price fluctuations. Since the same dollar amount is
transferred to other Investment Funds each month, more Accumulation Units are
purchased in an Investment Fund if the value per Accumulation Unit is low and
fewer Accumulation Units are purchased if the value per Accumulation Unit is
high. Therefore, a lower average value per Accumulation Unit may be achieved
over the long term. This plan of investing allows you to take advantage of
market fluctuations but does not assure a profit or protect against a loss in
declining markets.
The minimum amount that may be transferred on each Transaction Date is $250.
The maximum amount which may be transferred is equal to the Annuity Account
Value in the Money Market Fund at the time the option is elected, divided by
the number of transfers scheduled to be made each Contract Year.
The transfer date will be the same calendar day of the month as the Contract
Date. If, on any transfer date, the Annuity Account Value in the Money Market
Fund is equal to or less than the amount you have elected to have transferred,
the entire amount will be transferred and the dollar cost averaging option
will end. You may change the transfer amount once each Contract Year, or
cancel this option by sending us satisfactory notice to our Processing Office
at least seven calendar days before the next transfer date.
Dollar cost averaging may not be elected while a rebalancing program or the
systematic withdrawal option is in effect.
DEATH BENEFIT
When the Annuitant Dies
Generally, upon receipt of proof satisfactory to us of the Annuitant's death
prior to the Annuity Commencement Date, we will pay the death benefit to the
beneficiary named in your Certificate. You designate the beneficiary at the
time you apply for the Certificate. While the Certificate is in effect, you
may change your beneficiary by writing to our Processing Office. The change
will be effective on the date the written submission was signed. The death
benefit payable will be determined as of the date we receive such proof of
death and any required instructions as to the method of payment.
The death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
the GMDB defined below; and
(2) the death benefit provided with respect to the Guaranteed Period
Account which is equal to the Annuity Account Value in the
Guaranteed Period Account or, if greater, the sum of the Guaranteed
Period Amounts in each Guarantee Period. See "Part 3: The
Guaranteed Period Account."
There are two plans available under the Certificates for providing guaranteed
benefits, Plan A and Plan B. Plan A (available for Annuitant issue ages 20
through 75) provides a Combined GMDB/GMIB Benefit. Plan B provides a GMDB Only
Benefit, and has a lower charge. The GMDB and GMIB are discussed below.
For Annuitant issue ages 20 through 75, you must elect the Combined GMDB/GMIB
Benefit (Plan A) or the GMDB Only Benefit (Plan B) in the application. Once
elected, the plan may not be changed. For Annuitant issue ages 76 through 83,
for Certificates issued in New York and in states where the GMIB is not
currently available, the GMDB Only Benefit (Plan B) will apply.
For the specific charges, see "Part 5: Deductions and Charges."
GMDB
Your GMDB is the minimum amount payable with respect to the Investment Funds
upon the death of the Annuitant.
Applicable to Certificates issued in all states except New York
6% to Age 80 Benefit (Applicable to ages 20 through 75)--On the Contract Date,
the GMDB is equal to the portion of the initial contribution allocated to the
Investment Funds. Thereafter, the GMDB is credited with interest at 6% (3% for
amounts in the Fixed Income Series) on each Contract Date anniversary through
the Annuitant's age 80 and 0% thereafter, and is adjusted for any subsequent
contributions and transfers into the Investment Funds and transfers and
withdrawals from such Funds.
For Annuitant issue ages 76 through 83, the GMDB, as described below, will
continue to grow through age 85.
Applicable to Certificates issued in New York for Annuitant issue ages 20
through 79
Annual Ratchet to Age 80--On the Contract Date, the GMDB is equal to the
initial contribution allocated to the Investment Funds. Thereafter, the GMDB
is reset to the Annuity Account Value on a
30
<PAGE>
Contract Date anniversary if higher than the current GMDB, through the
Annuitant's age 80. The GMDB is adjusted for any subsequent contributions and
transfers into the Investment Funds and transfers and withdrawals from such
Funds.
Applicable to Certificates issued in New York for
Annuitant issue ages 80 through 83
On the Contract Date, the GMDB is equal to the portion of the initial
contribution allocated to the Investment Funds. Thereafter, the GMDB is equal
to such portion of the initial contribution plus (a) any subsequent
contributions and transfers into the Investment Funds, less (b) any transfers
and withdrawals from such Funds.
See Appendix III for an example of the calculation of the GMDB. Withdrawals
and transfers will reduce your GMDB, see "How Withdrawals and Transfers Affect
Your GMDB and GMIB" below.
How Payment is Made
We will pay the death benefit to the beneficiary in the form of the income
annuity option you have chosen under your Certificate. If no income annuity
option has been chosen at the time of the Annuitant's death, the beneficiary
will receive the death benefit in a lump sum. However, subject to certain
exceptions in the Certificate, Equitable Life's rules then in effect and any
other applicable requirements under the Code, the beneficiary may elect to
apply the death benefit to one or more income annuity options offered by
Equitable Life. See "Income Annuity Options" below. Note that if you are both
the Certificate Owner and the Annuitant, only a life annuity or an annuity
that does not extend beyond the life expectancy of the beneficiary may be
elected.
Successor Annuitant
If you are both the Certificate Owner and the Annuitant and you elect your
spouse to be both the sole primary beneficiary and the successor Annuitant/
Certificate Owner, then no death benefit is payable until your surviving
spouse's death.
On the Processing Date following your death, if the successor
Annuitant/Certificate Owner election was elected at issue of the Certificate
and is in effect at your death, the GMDB will be reset at the greater of the
current GMDB and the current Annuity Account Value in the Investment Funds.
In determining whether the GMDB will continue to grow, we will use the age (as
of the Processing Date) of the successor Annuitant/Certificate Owner.
WHEN THE CERTIFICATE OWNER DIES
BEFORE THE ANNUITANT
When you are not the Annuitant and you die before the Annuity Commencement
Date, the beneficiary named to receive the death benefit upon the Annuitant's
death will automatically succeed as Certificate Owner (unless you name a
different person as a successor Owner in a written form acceptable to us and
send it to our Processing Office). The Certificate provides that the original
Certificate Owner's entire interest in the Certificate be completely
distributed to the named beneficiary by the fifth anniversary of such Owner's
death (unless an income annuity option is elected and payments begin within
one year after the Certificate Owner's death and are made over the
beneficiary's life or over a period not to exceed the beneficiary's life
expectancy). If an income annuity option has not been elected, as described
above, on the fifth anniversary of your death, we will pay any Annuity Account
Value remaining on such date, less any applicable withdrawal charge. If the
successor Certificate Owner is your surviving spouse, no distributions are
required as long as both the surviving spouse and the Annuitant are living.
GMIB
GMIB, available under the Combined GMDB/GMIB Benefit (Plan A), may not
currently be available in your state. State availability information may be
obtained from your agent.
GMIB is an optional benefit which provides a minimum amount of guaranteed
lifetime future income with respect to the Investment Funds. It operates
through the application of your Annuity Account Value in the Investment Funds
when you elect the Assured Payment Plan (Life Annuity with a Period Certain).
The Assured Payment Plan provides payments during a period certain with payments
continuing for life thereafter.
On the Transaction Date that you exercise GMIB, your periodic lifetime income
that will be provided under the Assured Payment Plan will be the greater of
(i) your GMIB, and (ii) the amount of income that would be provided based on
your Annuity Account Value in the Investment Funds as of the Transaction Date
and our then current annuity purchase factors.
If you have any Annuity Account Value in the Guaranteed Period Account under
your Accumulator Certificate as of the Transaction Date that you exercise
GMIB, such Annuity Account Value will also be applied (at current annuity
purchase factors) toward the purchase of payments under the Assured Payment
Plan. Such Annuity Account Value will increase the payments provided by GMIB.
A market value adjustment may apply.
Listed below are GMIB amounts per $100,000 of initial contribution, for a male
age 60 (at issue) on Contract Date anniversaries as indicated below, assuming
no subsequent contributions or withdrawals.
31
<PAGE>
GMIB ANNUAL
CONTRACT DATE INCOME PAYABLE
ANNIVERSARY AT FOR LIFE
ELECTION 10 YEAR CERTAIN
- -------------- ---------------
7 $ 8,992
10 12,160
15 18,358
20 27,856
Withdrawals and transfers will reduce your GMIB, see "How Withdrawals and
Transfers Affect Your GMDB and GMIB" below.
GMIB may be exercised only under the following conditions:
o The Assured Payment Plan is elected within 30 days following the 7th
or later Contract Date anniversary under your Accumulator Certificate.
However, it may not be elected earlier than the Annuitant's age 60,
nor later than the Annuitant's age 83; except that for Annuitant's
issue ages 20 to 44, it may be elected 15 years after the Contract
Date.
o The period certain you select is as indicated below, based on the
Annuitant's age at the time the Assured Payment Plan is elected and
the type of payments selected (If elected prior to age 60, only level
payments are permitted):
LEVEL PAYMENTS
- -------------------------------------------
ANNUITANT'S AGE
AT ELECTION PERIOD CERTAIN
- ---------------------- -------------------
60 through 80 10 years
81 through 83 90 less issue age
INCREASING PAYMENTS
ANNUITANT'S AGE
AT ELECTION PERIOD CERTAIN
- ---------------------- -------------------
60 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
o Payments start one payment mode from the Contract Date of the Assured
Payment Plan Certificate.
Each year on your Contract Date anniversary, if you are eligible to exercise
GMIB, we will send you an eligibility notice illustrating how much income
could be provided under such option on the Contract Date anniversary. You may
then notify us within 30 days following the Contract Date anniversary if you
want to exercise the GMIB by submitting the proper form and returning your
Accumulator Certificate. The income to be provided under the Assured Payment
Plan Certificate will be determined on the Transaction Date that we receive
your request and the Certificate and, therefore, may differ from the
eligibility notice. It will be based on either the GMIB that was determined on
the Contract Date anniversary, or the Annuity Account Value and our current
annuity purchase factors as of such Transaction Date.
The Assured Payment Plan (Life Annuity with a Period Certain) is offered
through our Prospectus for the Assured Payment Plan dated May 1, 1997, which
may be obtained from your registered representative. We will also provide a
prospectus with the eligibility notice. You should read it carefully before
you decide to exercise GMIB.
You may always apply your Annuity Account Value to any of our life income
annuity options. The income annuity options are discussed below. These options
differ from the Assured Payment Plan and may provide higher or lower income
levels but do not have all the features under the Assured Payment Plan. You
may request an illustration from your agent.
Successor Annuitant/Certificate Owner
If the successor Annuitant/Certificate Owner election (discussed above) was
elected at issue of the Certificate and is in effect at your death, GMIB will
continue to be available on Contract Date anniversaries seven and later based
on the Contract Date of the Accumulator Certificate, provided GMIB is
exercised as specified above based on the age of the successor
Annuitant/Certificate Owner.
WITHDRAWAL OPTIONS
The Accumulator is an annuity contract, even though you may elect to receive
your benefits in a non-annuity form. You may take withdrawals from your
Certificate before the Annuity Commencement Date and while the Annuitant is
alive. Three withdrawal options are available: Lump Sum Withdrawals,
Systematic Withdrawals and Systematic Withdrawals Plus Life Contingent
Annuity. Withdrawals may result in withdrawal charges. See "Part 5:
Deductions and Charges." Withdrawals may also be taxable and subject to tax
penalty. See "Part 7: Tax Aspects of the Certificates."
Amounts withdrawn from the Guaranteed Period Account, other than at the
Expiration Date, will result in a market value adjustment. See "Market Value
Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration
Date" in Part 3.
As a deterrent to early withdrawal (generally prior to age 59 1/2) the Code
provides certain penalties. We may also be required to withhold income taxes
from the amount distributed. These rules are outlined in "Part 7: Tax Aspects
of the Certificates."
32
<PAGE>
o LUMP SUM WITHDRAWALS--You may take Lump Sum Withdrawals any time subject
to a minimum withdrawal amount of $1,000. A request to withdraw more
than 90% of the Cash Value as of the date of the withdrawal will result
in the termination of the Certificate and will be treated as a surrender
of the Certificate for its Cash Value. See "Surrendering the
Certificates to Receive the Cash Value," below.
To make a Lump Sum Withdrawal, you must submit a request satisfactory to us
which specifies the Investment Options from which the Lump Sum Withdrawal
will be taken. If we have received the information we require, the requested
withdrawal will become effective on the Transaction Date and proceeds will
usually be mailed within seven calendar days thereafter, but we may delay
payment as described in "When Payments Are Made" below. If we receive only
partially completed information, our Processing Office will contact you for
specific instructions before your request can be processed.
o SYSTEMATIC WITHDRAWALS--Systematic Withdrawals provide level percentage
or level amount payouts. You may choose to receive Systematic
Withdrawals on a monthly, quarterly or annual frequency. You select a
dollar amount or percentage of the Annuity Account Value to be
withdrawn, subject to a maximum of 1.2% monthly, 3.6% quarterly and
15.0% annually, but in no event may any payment be less than $250. If at
the time a Systematic Withdrawal is to be made, the withdrawal amount
would be less than $250, no payment will be made and your Systematic
Withdrawal election will terminate.
You select the date of the month when the withdrawals will be made, but you
may not choose a date later than the 28th day of the month. If no date is
selected, withdrawals will be made on the same calendar day of the month as
the Contract Date. The commencement of payments under the Systematic
Withdrawal option may not be elected to start sooner than 28 days after
issue of the Certificate.
You may elect Systematic Withdrawals at any time by completing the proper
form and sending it to our Processing Office. You may change the payment
frequency of your Systematic Withdrawals once each Contract Year or cancel
this withdrawal option at any time by sending notice in a form satisfactory
to us. The notice must be received at our Processing Office at least seven
calendar days prior to the next scheduled withdrawal date. You may also
change the amount or percentage of your Systematic Withdrawals once in each
Contract Year. However, you may not change the amount or percentage in any
Contract Year where you have previously taken another withdrawal under the
Lump Sum Withdrawals option described above.
o SYSTEMATIC WITHDRAWALS PLUS LIFE CONTINGENT ANNUITY--This option is
available for election under Certificates with the GMDB Only Benefit
(Plan B) at Annuitant ages 60 through 75. However, it may currently not
be available in all states. This option provides systematic withdrawals
during a deferral period and guaranteed annuity payments thereafter for
the Annuitant's lifetime (SINGLE LIFE) or the lifetime of the Annuitant
and a joint Annuitant (JOINT & SURVIVOR) you designate. Withdrawals you
receive during the deferral period are made from the Annuity Account
Value under your Certificate, and are followed by Life Contingent
Annuity payments (described below). Deferral period withdrawals in the
first year are designed to equal 6% of the initial contribution (or
Annuity Account Value at time of election), with withdrawals increasing
by 3% each year thereafter. The first payment under the Life Contingent
Annuity will be 3% greater than the final withdrawal scheduled to be
made at the end of the deferral period and will increase annually on
each anniversary of the payment start date based on the annual increase,
if any, in the Consumer Price Index, but in no event greater than 3% per
year.
You may elect this option at any time by completing the proper form. You
select the length of the deferral period subject to a minimum of seven years
and a maximum of 15 years. You may choose to receive withdrawals on a
monthly, quarterly or annual mode, subject to a minimum of $250 in the first
year. All withdrawals will be made on the 15th of the month. Withdrawals
will begin one payment mode after the Contract Date or effective date of the
option. You may cancel your Systematic Withdrawals at any time by sending
notice in a form satisfactory to us. The notice must be received at our
Processing Office at least seven calendar days prior to the next scheduled
withdrawal date. If you cancel the Systematic Withdrawals, the Life
Contingent Annuity will still be in effect and payments will begin on the
scheduled initial payment date. The Life Contingent Annuity may only be
canceled during its Free Look Period, discussed below.
Withdrawals during the Deferral Period
Withdrawals are not guaranteed since the Annuity Account Value available for
withdrawal will depend on the performance of the Investment Funds and any
market value adjustments for
33
<PAGE>
amounts in the Guarantee Periods. It is possible that poor investment
performance in the Investment Funds and negative market value adjustments in
the Guarantee Periods, may result in the Annuity Account Value being
exhausted prior to the end of the deferral period. This may result in no
withdrawals being made for a period of time until the Life Contingent
Annuity payments are scheduled to begin. However, you may elect to
accelerate the date the Life Contingent Annuity payments will begin in order
to receive continuous payments. Such payments will be made in reduced
amounts.
Good investment performance and positive market value adjustments may result
in significant Annuity Account Value at the end of the deferral period. In
such a case, any remaining Annuity Account Value will be applied to increase
the annuity payments under the Life Contingent Annuity. Excess Annuity
Account Value at the end of the deferral period may also result from payment
of subsequent contributions as discussed below.
Withdrawals under this option are not subject to withdrawal charges provided
no other withdrawals are made. Once you take a Lump Sum Withdrawal, all
subsequent withdrawals under this option will be subject to a withdrawal
charge to the extent that in any Contract Year they exceed the 15% free
corridor amount.
Allocation of Contributions
If elected at the time you apply for the Certificate, based on the amount of
your initial contribution, the Annuitant's age and sex (and the age and sex
of the joint Annuitant, if applicable), the mode of payment, the form of
payment and the deferral period you select, a portion of your initial
contribution is applied by us to the Life Contingent Annuity. The balance of
the initial contribution is allocated to the Investment Options according to
your instructions. If elected after issue, a portion of your Annuity Account
Value is applied to the Life Contingent Annuity and the balance is allocated
according to your instructions. A market value adjustment may apply with
respect to amounts transferred from the Guaranteed Period Account.
If you elect this option in the application and your initial contribution
will come from multiple sources, your application must also indicate that
contributions are to be initially allocated to the Money Market Fund.
Election of this option must include your instructions to apply a portion of
your Annuity Account Value to the Life Contingent Annuity and the balance
according to your instructions, on the date the last such contribution is
received.
Any subsequent contributions will be allocated according to your
instructions. However, if withdrawal payments have begun, subsequent
contributions will not increase the amount of withdrawal payments you will
receive.
You may transfer your Annuity Account Value among the Investment Options
subject to the rules indicated under "Transfers Among Investment Options"
above.
Life Contingent Annuity Payments
The Life Contingent Annuity provides lifetime payments starting after the
end of the deferral period. The portion of your contributions or Annuity
Account Value applied under the Life Contingent Annuity does not have a Cash
Value or an Annuity Account Value and, therefore, does not provide for
transfers or withdrawals. Once the deferral period has ended and payments
have begun under the Life Contingent Annuity, subsequent amounts may no
longer be applied under the Life Contingent Annuity.
THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND
ANNUITY INCOME IS PAID ONLY IF THE ANNUITANT (OR A JOINT ANNUITANT) IS
LIVING AT THE DATE ANNUITY BENEFITS BEGIN. BENEFITS ARE ONLY PAID DURING THE
ANNUITANT'S LIFETIME AND, IF APPLICABLE, THE LIFETIME OF A JOINT ANNUITANT.
CONSEQUENTLY, YOU SHOULD CONSIDER THE POSSIBILITY THAT NO AMOUNTS WILL BE
PAID UNDER THE LIFE CONTINGENT ANNUITY IF THE ANNUITANT (OR A JOINT
ANNUITANT) DOES NOT SURVIVE TO THE DATE PAYMENTS ARE TO START UNDER SUCH
ANNUITY.
You may elect to have the Life Contingent Annuity provide increasing
payments on a Single Life or a Joint and 100% to Survivor basis. The Life
Contingent Annuity may also provide payments on a Joint and one-half to
Survivor or a Joint and two-thirds to Survivor basis.
Payments under the Life Contingent Annuity will be made during the
Annuitant's lifetime (and the lifetime of the joint Annuitant, if
applicable) on the same payment mode and date as the payments that were made
during the deferral period.
A portion of each annuity payment under the Life Contingent Annuity will be
excluded from taxable income. See "Part 7: Tax Aspects of the
Certificates."
Free Look Period
If the Systematic Withdrawals Plus Life Contingent Annuity option is elected
after issue of the Certificate, after the first application of an amount
under the Life Contingent Annuity, you have the
34
<PAGE>
right to examine the Life Contingent Annuity for a period of 10 days. During
this period you may request that we cancel the Life Contingent Annuity and
the amount applied will be allocated to the Investment Options under the
Accumulator Certificate according to your allocation percentages, as
described under "Allocation of Contributions" above. If you cancel the Life
Contingent Annuity, we may require that you wait one year from the date of
cancelation before amounts may be applied again.
Withdrawal Charge
Once amounts are applied under the Life Contingent Annuity, the withdrawal
charge (discussed in Part 5) under the Certificate will be imposed as a
percentage of contributions that have not been withdrawn, less the amount
applied under the Life Contingent Annuity.
Income Annuity Option and Surrendering
the Certificates
If you elect to cancel your systematic withdrawals, and elect an annuity
benefit as described under "Income Annuity Options" below, or surrender the
Certificate for its Cash Value as described under "Surrendering the
Certificates to Receive the Cash Value" below, once we receive your returned
Certificate, your Certificate will be returned to you with a notation that
the Life Contingent Annuity is still in effect. Thereafter, no subsequent
contributions will be accepted under the Certificate and no amounts may be
applied under the Life Contingent Annuity.
Assignment
Once amounts are applied to the Life Contingent Annuity, the Life Contingent
Annuity may not be assigned.
1035 Exchanges
Under the Certificate, a transfer of the Cash Value under your Certificate
to another issuer may not qualify under Section 1035 of the Code as a tax
free exchange, once amounts have been applied under the Life Contingent
Annuity.
Allocation of Systematic Withdrawals
Unless you specify otherwise, Systematic Withdrawals under both options above,
will be withdrawn on a pro rata basis from your Annuity Account Value in the
Investment Funds. If there is insufficient value or no value in the Investment
Funds, any additional amount of the withdrawal required or the total amount of
the withdrawal, as applicable, will be withdrawn from the Guarantee Periods in
order of the earliest Expiration Date(s) first.
Withdrawal Charges
Withdrawals in excess of the 15% free corridor amount may be subject to a
withdrawal charge. See "Withdrawal Charge" in Part 5.
How Withdrawals and Transfers Affect Your GMDB and GMIB
Under the 6% to Age 80 Benefit and under GMIB, withdrawals or transfers from
the Investment Funds greater than 6% of the Annuity Account Value and any
withdrawal or transfers from the Investment Funds under the Annual Ratchet to
Age 80, will cause a reduction in the GMDB (described above) and GMIB Benefit
Base (described below) on a pro rata basis. This means that if you take a
withdrawal of $10,000 and such withdrawal represents 10% of your Annuity
Account Value as of the Transaction Date, your current GMDB and current GMIB
Benefit Base will be reduced by 10%.
Under the 6% to Age 80 Benefit and under GMIB, withdrawals or transfers from
the Investment Funds of 6% or less will cause a dollar-for-dollar reduction in
the GMDB and GMIB Benefit Base. That means that if you take a withdrawal of
$10,000, which represents less than 6% of your Annuity Account Value as of the
Transaction Date, your current GMDB and current GMIB Benefit Base will be
reduced by $10,000.
GMIB Benefit Base--The GMIB Benefit Base is equal to the portion of the
initial contribution allocated to the Investment Funds on the Contract Date.
Thereafter, the GMIB Benefit Base is credited with interest at 6% (3% for
amounts in the Fixed Income Series) on each Contract Date anniversary
through the Annuitant's age 80, and 0% thereafter, and is adjusted for any
subsequent contributions and transfers into the Investment Funds and
transfers and withdrawals from such Funds. The GMIB Benefit Base will also
be reduced by any withdrawal charge remaining on the Transaction Date that
you exercise GMIB.
Your GMIB Benefit Base is applied to guaranteed minimum annuity purchase
factors to determine the GMIB. The guaranteed minimum annuity purchase
factors are based on (i) interest at 2.5% if GMIB is exercised within 30
days following a Contract Date anniversary in years 7 through 9 and at 3% if
exercised within 30 days following the 10th or later Contract Date
anniversary, and (ii) mortality based on the 1983 Individual Annuity
Mortality Table "a" projected with modified Scale G. The purchase factors
assume that mortality will improve in the future and are more conservative
than the basis underlying current annuity purchase rates.
35
<PAGE>
Your GMIB benefit base does not create an Annuity Account Value or a Cash
Value and is used solely for purposes of calculating the GMIB.
The timing of your withdrawals and whether they exceed the 6% threshold
described above can have a significant impact on your GMDB or GMIB.
CASH VALUE
The Cash Value under the Certificate fluctuates daily with the investment
performance of the Investment Funds you have selected and reflects any upward
or downward market value adjustment. See "Part 3: The Guaranteed Period
Account." We do not guarantee any minimum Cash Value except for amounts in a
Guarantee Period held to the Expiration Date. On any date before the Annuity
Commencement Date while the Certificate is in effect, the Cash Value is equal
to the Annuity Account Value less any withdrawal charge. The free corridor
amount will not apply when calculating the withdrawal charge applicable upon a
surrender. See "Part 5: Deductions and Charges."
SURRENDERING THE CERTIFICATES TO
RECEIVE THE CASH VALUE
You may surrender a Certificate to receive the Cash Value at any time while
the Annuitant is living and before the Annuity Commencement Date.
For a surrender to be effective, we must receive your written request and the
Certificate at our Processing Office. The Cash Value will be determined on the
Transaction Date. All benefits under the Certificate will be terminated as of
that date. You may receive the Cash Value in a single sum payment or apply it
under one or more of the income annuity options described below. We will
usually pay the Cash Value within seven calendar days, but we may delay
payment as described in "When Payments are Made" below.
In some cases, surrenders may have adverse tax consequences. See "Part 7: Tax
Aspects of the Certificates."
INCOME ANNUITY OPTIONS
Income annuity options provide periodic payments over a specified period of
time which may be fixed or may be based on the Annuitant's life. Annuity forms
of payment are calculated as of the Annuity Commencement Date, which is on
file with our Processing Office. You can change the Annuity Commencement Date
by writing to our Processing Office any time before the Annuity Commencement
Date. However, you may not choose a date later than the 28th day of any month.
Also, based on the issue age of the Annuitant, the Annuity Commencement Date
may not be later than the Processing Date which follows the Annuitant's 90th
birthday (may be different in some states).
Before the Annuity Commencement Date, we will send a letter advising that
annuity benefits are available. Unless you otherwise elect, we will pay fixed
annuity benefits on the "normal form" indicated for your Certificate as of the
Annuity Commencement Date. The amount applied to provide the annuity benefit
will be (1) the Annuity Account Value for any life annuity form or (2) the
Cash Value for any period certain only annuity form except that if the period
certain is more than five years, the amount applied will be no less than 95%
of the Annuity Account Value.
Amounts in the Guarantee Periods that are applied to an income annuity option
prior to an Expiration Date will result in a market value adjustment. See
"Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the
Expiration Date" in Part 3.
ANNUITY FORMS
o Life Annuity: An annuity which guarantees payments for the rest of the
Annuitant's life. Payments end with the last monthly payment before the
Annuitant's death. Because there is no death benefit associated with
this annuity form, it provides the highest monthly payment of any of the
life income annuity options, so long as the Annuitant is living.
o Life Annuity-Period Certain: This annuity form also guarantees payments
for the rest of the Annuitant's life. In addition, if the Annuitant dies
before a specified period of time (the "certain period") has ended,
payments will continue to the beneficiary for the balance of the certain
period. Certain periods may be 5, 10, 15 or 20 years. A life annuity
with a certain period of 10 years is the normal form of annuity under
the Certificates.
o Life Annuity-Refund Certain: This annuity form guarantees payments to
you for the rest of your life. In addition, if you die before the amount
applied to purchase this annuity option has been recovered, payments
will continue to your beneficiary until that amount has been recovered.
This option is available only as a fixed annuity.
o Period Certain Annuity: This annuity form guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years, and does not
involve life contingencies.
36
<PAGE>
o Joint and Survivor Life Annuity: This annuity form guarantees life
income to you and, after your death, continuation of income to the
survivor.
The life annuity-period certain and the life annuity-refund certain are
available on either a single life or joint and survivor life basis.
The income annuity options outlined above are available in both fixed and
variable form, unless otherwise indicated. Fixed annuity payments are
guaranteed by us and will be based either on the tables of guaranteed annuity
payments in your Certificate or on our then current annuity rates, whichever
is more favorable for the Annuitant. Variable income annuities may be funded
through the Investment Funds through the purchase of annuity units. The amount
of each variable annuity payment may fluctuate, depending upon the performance
of the Investment Funds. That is because the annuity unit value rises and
falls depending on whether the actual rate of net investment return (after
deduction of charges) is higher or lower than the assumed base rate. See
"Annuity Unit Values" in the SAI. Variable income annuities may also be
available by separate prospectus through Investment Funds of other separate
accounts we offer.
For all Annuitants, the normal form of annuity provides for fixed payments. We
may offer other forms not outlined here. Your registered representative can
provide details.
For each income annuity option, we will issue a separate written agreement
putting the option into effect. Before we pay any annuity benefit, we require
the return of the Certificate.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity, the type of annuity chosen and, in the case of a life
income annuity option, the Annuitant's age (or the Annuitant's and joint
Annuitant's ages) and in certain instances, the sex of the Annuitant(s). Once
an income annuity option is chosen and payments have commenced, no change can
be made.
If, at the time you elect an income annuity option, the amount to be applied
is less than $2,000 or the initial payment under the option elected is less
than $20 monthly, we reserve the right to pay the Annuity Account Value in a
single sum rather than as payments under the annuity form chosen.
ASSURED PAYMENT PLAN
You may apply your Annuity Account Value, in whole or in part, and subject to
any withdrawal charges to the extent described below, to purchase the Assured
Payment Plan (Life Annuity with a Period Certain), provided the Annuitant
meets the issue age and payment restrictions for the Assured Payment Plan. If
you apply a part of the Annuity Account Value, it will be considered a
withdrawal and may be subject to withdrawal charges. See "Withdrawal Options"
above. The Assured Payment Plan, is designed to provide guaranteed level or
increasing annual payments for the Annuitant's life or for the Annuitant's
life and the life of a joint Annuitant. If 100% of the Annuity Account Value
is applied from an Accumulator Certificate to purchase the Assured Payment
Plan at a time when the dollar amount of the withdrawal charge is greater than
2% of remaining contributions (after withdrawals), such withdrawal charge will
not be deducted. However, a new withdrawal charge schedule will apply under
the Assured Payment Plan. For purposes of the Assured Payment Plan withdrawal
charge schedule, the year in which your Annuity Account Value is applied under
the Assured Payment Plan will be "Contract Year 1." If 100% of the Annuity
Account Value is applied from the Accumulator when the dollar amount of the
withdrawal charge is 2% or less, such withdrawal charge will not be deducted
and there will be no withdrawal charge schedule under the Assured Payment
Plan. You should consider the timing of your purchase as it relates to the
potential for withdrawal charges under the Assured Payment Plan. No subsequent
contributions will be permitted under the Assured Payment Plan Certificate.
You may also apply your Annuity Account Value to purchase the Assured Payment
Plan (Period Certain) once withdrawal charges are no longer in effect. This
version of the Assured Payment Plan provides for annual payments for a
specified period. No withdrawal charges will apply under the Assured Payment
Plan Certificate.
The Assured Payment Plan (Life Annuity with a Period Certain) and Assured
Payment Plan (Period Certain) are described in our prospectus for the Assured
Payment Plan, dated May 1, 1997. Copies are available from your registered
representative.
To purchase this annuity form we also require the return of your Certificate.
An Assured Payment Plan Certificate will be issued putting this annuity form
into effect.
Depending upon your circumstances, this may be accomplished on a tax-free
basis. Consult your tax adviser.
WHEN PAYMENTS ARE MADE
Under applicable law, application of proceeds from the Investment Funds to a
variable annuity, payment of a death benefit from the Investment Funds,
payment of any portion of the Annuity Account Value (less any applicable
withdrawal charge) from the Investment Funds, and, upon surrender, payment of
the Cash Value from the Investment Funds will be made within seven calendar
days after the
37
<PAGE>
Transaction Date. Payments or application of proceeds from the Investment
Funds can be deferred for any period during which (1) the New York Stock
Exchange is closed or trading on it is restricted, (2) sales of securities or
determination of the fair value of an Investment Fund's assets is not
reasonably practicable because of an emergency, or (3) the SEC, by order,
permits us to defer payment in order to protect persons with interest in the
Investment Funds.
We can defer payment of any portion of the Annuity Account Value in the
Guaranteed Period Account (other than for death benefits) for up to six months
while you are living. We may also defer payments for any amount attributable
to a contribution made in the form of a check for a reasonable amount of time
(not to exceed 15 days) to permit the check to clear.
ASSIGNMENT
The Certificates may be assigned at any time before the Annuity Commencement
Date and for any purpose other than as collateral or security for a loan.
Equitable Life 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
may have adverse tax consequences. See "Part 7: Tax Aspects of the
Certificates."
SERVICES WE PROVIDE
O REGULAR REPORTS
o Statement of your Certificate values as of the last day of the
calendar year;
o Three additional reports of your Certificate values each year;
o Annual and semi-annual statements of each trust; and
o Written confirmation of financial transactions.
O TOLL-FREE TELEPHONE SERVICES
o Call 1-800-789-7771 for arecording of daily Accumulation Unit Values
and Guaranteed Rates applicable to the Guarantee Periods. Also call
during our regular business hours to speak to one of our customer
service representatives.
O PROCESSING OFFICE
O FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
Post Office Box 13014
Newark, NJ 07188-0014
O FOR CONTRIBUTIONS SENT BY EXPRESS MAIL:
Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
O FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS,
WITHDRAWALS) SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
O FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS,
WITHDRAWALS) SENT BY
EXPRESS MAIL:
Equitable Life
Income Management Group
200 Plaza Drive
Secaucus, NJ 07096
DISTRIBUTION OF THE CERTIFICATES
As the distributor of the Certificates, Equitable Distributors, Inc. (EDI), an
indirect wholly owned subsidiary of Equitable Life, has responsibility for
sales and marketing functions for the Certificates. EDI also serves as the
principal underwriter of the Separate Account under the 1940 Act. EDI is
registered with the SEC as a broker-dealer under the Exchange Act and is a
member of the National Association of Securities Dealers, Inc. EDI's principal
business address is 1290 Avenue of the Americas, New York, New York 10104. EDI
was paid a fee of $126,914 for 1995 and $ for 1996 for its services under its
"Distribution Agreement" with Equitable Life and the Separate Account.
The Certificates will be sold by registered representatives of EDI and its
affiliates, who are also our licensed insurance agents. Broker-dealer sales
compensation for EDI and its affiliates will generally not exceed six percent
of total contributions made under a Certificate. EDI may also receive
compensation and reimbursement for its marketing services under the terms of
its distribution agreement with Equitable Life. Broker-dealers receiving sales
compensation will generally pay a portion thereof to their registered
representatives as commission related to sales of the Certificates. The
offering of the Certificates is intended to be continuous.
38
<PAGE>
- -------------------------------------------------------------------------------
PART 5: DEDUCTIONS AND CHARGES
- -------------------------------------------------------------------------------
CHARGES DEDUCTED FROM THE
ANNUITY ACCOUNT VALUE
We allocate the entire amount of each contribution to the Investment Options
you select, subject to certain restrictions. We then periodically deduct
certain amounts from your Annuity Account Value. The charges described below
and under "Charges Deducted from the Investment Funds" below will not be
increased by us for the life of the Certificates. We may reduce certain
charges under group or sponsored arrangements. See "Group or Sponsored
Arrangements" below. Charges are deducted proportionately from all the
Investment Funds in which your Annuity Account Value is invested on a pro rata
basis, except as noted below.
Withdrawal Charge
A withdrawal charge will be imposed as a percentage of each contribution made
to the extent that a withdrawal exceeds the free corridor amount, or if the
Certificate is surrendered to receive its Cash Value. We determine the
withdrawal charge separately for each contribution in accordance with the
table below.
CONTRACT YEAR
1 2 3 4 5 6 7 8+
------ ------ ------ ------ ------ ------ ------ -----
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
The applicable withdrawal charge percentage is determined by the Contract Year
in which the withdrawal is made or the Certificate is surrendered, beginning
with "Contract Year 1" with respect to each contribution withdrawn or
surrendered. For each contribution, the Contract Year in which we receive that
contribution is "Contract Year 1."
The withdrawal charge is deducted from the Investment Options from which each
such withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.
Free Corridor Amount
The free corridor amount is 15% of the Annuity Account Value at the
beginning of the Contract Year minus any amount previously withdrawn
during that Contract Year.
Any withdrawal requested that exceeds the free corridor amount will be subject
to the withdrawal charge. The 15% free corridor amount is not applicable to a
surrender.
For purposes of calculating the withdrawal charge, (1) we treat contributions
as being withdrawn on a first-in first-out basis, and (2) amounts withdrawn up
to the free corridor amount are not considered a withdrawal of any
contributions. Although we treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge, the Federal income tax law
treats earnings as withdrawn first. See "Part 7: Tax Aspects of the
Certificates."
The withdrawal charge is to help cover sales expenses.
For Certificates issued to a charitable remainder trust, the free corridor
amount may be changed to be the greater of (1) the current Annuity Account
Value, less the excess of contributions that have not been withdrawn (earnings
in the Certificate) and (2) the free corridor amount defined above.
Withdrawal Processing Charge
We reserve the right to impose a charge of the lesser of $25 and 2.0% of the
amount withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. This charge, if made, is to cover our administrative expenses in
processing Lump Sum Withdrawals.
Combined GMDB/GMIB Benefit Charge (Plan A)
We deduct a charge annually on each Processing Date for providing the Combined
GMDB/GMIB Benefit (Plan A). The charge is equal to a percentage of the GMDB in
effect on the Processing Date. The percentage is equal to 0.45%.
GMDB Only Benefit Charge (Plan B)
We deduct a charge annually on each Processing Date for providing the GMDB
Only Benefit (Plan B). The charge is equal to a percentage of the GMDB in
effect on the Processing Date. For Annuitant issue ages 20 through 75, the
percentage is equal to 0.20%. For Annuitant issue ages 76 through 83, the
percentage is equal to 0.45%.
Charges for State Premium and Other Applicable Taxes
We deduct a charge for applicable taxes, such as state or local premium taxes,
that might be imposed in your state. Generally we deduct this charge from the
amount applied to provide an income annuity option. In certain states,
however, we may deduct the charge for taxes from contributions. The current
tax charge that might be imposed varies by state
39
<PAGE>
and ranges from 0% to 3.5% (the rate is 1% in Puerto Rico and 5% in the Virgin
Islands).
CHARGES DEDUCTED FROM THE
INVESTMENT FUNDS
Mortality and Expense Risks Charge
We will deduct a daily charge from the assets in each Investment Fund to
compensate us for mortality and expense risks. The daily charge is at the rate
of 0.002477%, which is equivalent to an annual rate of 0.90%, on the assets in
each Investment Fund. Approximately 0.60% of this annual charge is allocated
to the mortality risk and 0.30% is allocated to the expense risk.
We will realize a gain from this charge to the extent it is not needed to
provide for benefits and expenses under the Certificate. We will use any gain
for any lawful purpose including payment of distribution expenses not
recovered from sales charges under the Certificate.
The mortality risk assumed is the risk that Annuitants as a group will live
for a longer time than our actuarial tables predict. As a result, we would be
paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each Certificate, will differ from actual mortality experience.
Lastly, we assume a mortality risk to the extent that at the time of death,
the GMDB exceeds the Cash Value of the Certificate.
The expense risk assumed is the risk that it will cost us more to issue and
administer the Certificates than we expect.
Administration Charge
We will deduct a daily charge from the assets in each Investment Fund, to
compensate us for a portion of the administration expenses under the
Certificates. The daily charge is at a rate of 0.000692% (equivalent to an
annual rate of 0.25%) on the assets in each Investment Fund. We reserve the
right to increase the charge to an annual rate of 0.35% the maximum permitted
under the Certificates.
HR TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against HR Trust's assets, the Rule
12b-1 Plan fee, direct operating expenses of HR Trust (such as trustees' fees,
expenses of independent auditors and legal counsel, bank and custodian charges
and liability insurance), and certain investment-related expenses of HR Trust
(such as brokerage commissions and other expenses related to the purchase and
sale of securities), are reflected in each Portfolio's daily share price. The
maximum investment advisory fees paid annually by the Portfolios cannot be
changed without a vote by shareholders. They are as follows:
AVERAGE DAILY NET ASSETS
-------------------------------------
FIRST NEXT OVER
$350 $400 $750
MILLION MILLION MILLION
----------- ----------- -----------
ASSET ALLOCATION SERIES:
(Alliance) Conservative Investors .550% .525% .500%
(Alliance) Growth Investors ..... .550% .525% .500%
EQUITY SERIES:
(Alliance) Common Stock .......... .400% .375% .350%
(Alliance) Global ................ .550% .525% .500%
(Alliance) Aggressive Stock ..... .500% .475% .450%
(Alliance) Small Cap Growth ..... .xxx% .xxx% .xxx%
FIXED INCOME SERIES:
(Alliance) Money Market .......... .400% .375% .350%
(Alliance) Intermediate Govt.
Securities ....................... .500% .475% .450%
FIRST NEXT OVER
$500 $500 $1
MILLION MILLION BILLION
--------- --------- ---------
EQUITY SERIES:
(Alliance) Growth & Income .. .550% .525% .500%
FIRST NEXT OVER
$500 $1 $1.5
MILLION BILLION BILLION
----------- ----------- -----------
EQUITY SERIES:
(Alliance) International .... .900% .850% .800%
FIRST NEXT OVER
$750 $750 $1.5
MILLION MILLION BILLION
(Alliance) Equity Index .... .350% .300% .250%
Investment advisory fees are established under HR Trust's investment advisory
agreements between HR Trust and its investment adviser, Alliance.
The Rule 12b-1 Plan provides that the HR Trust, on behalf of each Portfolio
may pay annually up to 0.25% of the average daily net assets of a Portfolio
attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. The Rule 12b-1 Plan
fee, which may be waived in the discretion of EDI may be increased only by
action of the Board of Trustees of HR Trust up to a maximum of 0.50% per
annum. All of these fees and expenses are described more fully in the HR Trust
prospectus.
EQ TRUST CHARGES TO PORTFOLIOS
Investment management fees charged daily against EQ Trust's assets, the Rule
12b-1 Plan fee, direct operating expenses of EQ Trust (such as trustees' fees,
expenses of independent auditors and legal counsel, administrative service
fees, custodian fees, and liability insurance), and certain investment-related
expenses of EQ Trust (such as brokerage commissions and other expenses related
to the pur-
40
<PAGE>
chase and sale of securities), are reflected in each Portfolio's daily share
price. The investment management fees paid annually by the Portfolios cannot
be changed without a vote by shareholders. They are as follows:
AVERAGE DAILY NET ASSETS
----------------------------------------
FIRST NEXT OVER
$20 MILLION $30 MILLION $50 MILLION
------------ ------------ ------------
T. Rowe Price
International Stock .750% .600% .500%
T. Rowe Price Equity
Income ............. .400% .400% .400%
FIRST NEXT OVER
$150 MILLION $150 MILLION $300 MILLION
------------- ------------- -------------
EQ/Putnam Growth &
Income ............. .500% .450% .350%
EQ/Putnam
International
Equity ............. .650% .550% .450%
EQ/Putnam Investors
Growth ............. .500% .450% .350%
EQ/Putnam Balanced . .500% .450% .350%
MFS Research ........ .400% .375% .350%
MFS Emerging Growth
Companies .......... .400% .375% .350%
FIRST NEXT NEXT NEXT OVER
$100 $50 $50 $300 $500
MILLION MILLION MILLION MILLION MILLION
--------- --------- --------- --------- ---------
Morgan Stanley
Markets
Equity ....... 1.150% .900% .800% .600% .400%
Warburg Pincus
Small Company
Value ........ .500% .500% .500% .500% .500%
FIRST NEXT OVER
$100 MILLION $200 MILLION $300 MILLION
------------- ------------- -------------
Merrill Lynch Global
Allocation ......... .500% .450% .350%
Merrill Lynch Basic
Value .............. .400% .375% .350%
Investment management fees are established under EQ Trust's Investment
Management Agreement between EQ Trust and its investment manager, EQ
Financial. EQ Financial has entered into expense limitation agreements with EQ
Trust, with respect to each Portfolio, pursuant to which EQ Financial has
agreed to waive or limit its fees and total annual operating expenses
(expressed as a percentage of the Portfolios' average daily net assets) to
%. See the prospectus for EQ Trust for more information.
The Rule 12b-1 Plan provides that EQ Trust, on behalf of each Portfolio, may
pay annually up to 0.25% of the average daily net assets of a Portfolio
attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. The Rule 12b-1 Plan
fees, which may be waived in the discretion of EDI, may be increased only by
action of the Board of Trustees of EQ Trust up to a maximum of 0.50% per
annum. All of these fees and expenses are described more fully in the EQ Trust
prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or change the minimum initial contribution requirements. We may also
change the guaranteed minimum death benefit and the guaranteed minimum income
benefit. We may offer Investment Funds investing in Class IA shares of HR
Trust and EQ Trust, which are not subject to 12b-1 Plan fees. 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
Certificates 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 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, including our
requirements for size and number of years in existence. Group or sponsored
arrangements that have been set up solely to buy Certificates or that have
been in existence less than six months will not qualify for reduced charges.
We may also establish different Guaranteed Rates for the Guarantee Periods
under different classes of Certificates for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when a Certificate is approved 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 and sponsored arrangements may be governed by the Code, the Employee
Retirement Income Security Act of 1974 (ERISA), or both. We make no
representations as to the impact of those and other applicable laws on such
programs. WE RECOMMEND THAT EMPLOYERS, TRUSTEES, AND OTHERS PURCHASING OR
MAKING CERTIFICATES AVAILABLE FOR PURCHASE UNDER SUCH PROGRAMS SEEK THE ADVICE
OF THEIR OWN LEGAL AND BENEFITS ADVISERS.
OTHER DISTRIBUTION ARRANGEMENTS
Charges may be reduced or eliminated 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
receive no commission or reduced commissions in connection with the sale of
the Certificates. In no event will a reduction or elimination charges be
permitted where it would be unfairly discriminatory.
41
<PAGE>
- ------------------------------------------------------------------------------
PART 6: VOTING RIGHTS
- ------------------------------------------------------------------------------
HR TRUST AND EQ TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of HR Trust and EQ Trust.
Since we own the assets of the Separate Account, we are the legal owner of the
shares and, as such, have the right to vote on certain matters. Among other
things, we may vote:
o to elect each trust's Board of Trustees,
o to ratify the selection of independent auditors for each trust, and
o on any other matters described in each trust's current prospectus or
requiring a vote by shareholders under the 1940 Act.
Because HR Trust is a Massachusetts business trust and EQ Trust is a Delaware
business trust, annual meetings are not required. Whenever a shareholder vote
is taken, we will give Certificate Owners the opportunity to instruct us how
to vote the number of shares attributable to their Certificates. If we do not
receive instructions in time from all Certificate Owners, we will vote the
shares of a Portfolio for which no instructions have been received in the same
proportion as we vote shares of that Portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote
directly because of amounts we have in an Investment Fund in the same
proportions that Certificate Owners vote.
Each share of each trust is entitled to one vote. Fractional shares will be
counted. Voting generally is on a Portfolio-by-Portfolio basis except that
shares will be voted on an aggregate basis when universal matters, such as
election of Trustees and ratification of independent auditors, are voted upon.
However, if the Trustees determine that shareholders in a Portfolio are not
affected by a particular matter, then such shareholders generally would not be
entitled to vote on that matter.
VOTING RIGHTS OF OTHERS
Currently, we control each trust. EQ Trust shares currently are sold only to
our separate accounts. HR Trust shares are held by other separate accounts of
ours and by separate accounts of insurance companies affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the Accumulator Certificate Owners, we
currently do not foresee any disadvantages arising out of this. HR Trust's
Board of Trustees intends to monitor events in order to identify any material
irreconcilable conflicts that possibly may arise and to determine what action,
if any, should be taken in response. If we believe that HR Trust's response to
any of those events insufficiently protects our Certificate Owners, we will
see to it that appropriate action is taken to protect our Certificate Owners.
SEPARATE ACCOUNT VOTING RIGHTS
If actions relating to the Separate Account require Certificate Owner
approval, Certificate Owners will be entitled to one vote for each
Accumulation Unit they have in the Investment Funds. Each Certificate Owner
who has elected a variable annuity payout may cast the number of votes equal
to the dollar amount of reserves we are holding for that annuity in an
Investment Fund divided by the Accumulation Unit Value for that Investment
Fund. We will cast votes attributable to any amounts we have in the Investment
Funds in the same proportion as votes cast by Certificate Owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
Federal securities laws. To the extent that those laws or the regulations
promulgated under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
42
<PAGE>
- -----------------------------------------------------------------------------
PART 7: TAX ASPECTS OF THE CERTIFICATES
- -----------------------------------------------------------------------------
This prospectus generally covers our understanding of the current Federal
income tax rules that apply to an annuity purchased with after-tax dollars
(non-qualified annuity). This section does not apply to Qualified Plan
Certificates discussed in Appendix II.
This prospectus does not provide detailed tax information and does not address
issues such as state income and other taxes or Federal gift and estate taxes.
Please consult a tax adviser when considering the tax aspects of the
Accumulator Certificates.
TAX CHANGES
The United States Congress has in the past considered and may in the future
consider proposals for legislation that, if enacted, could change the tax
treatment of annuities. In addition, the Treasury Department may amend
existing regulations, issue new regulations, or adopt new interpretations of
existing laws. State tax laws or, if you are not a United States resident,
foreign tax laws, may affect the tax consequences to you or the beneficiary.
These laws may change from time to time without notice and, as a result, the
tax consequences may be altered. There is no way of predicting whether, when
or in what form any such change would be adopted.
Any such change could have retroactive effects regardless of the date of
enactment. We suggest you consult your legal or tax adviser.
TAXATION OF NON-QUALIFIED ANNUITIES
Equitable Life has designed the Accumulator Certificate to qualify as an
"annuity" for purposes of Federal income tax law. Gains in the Annuity Account
Value of the Certificate generally will not be taxable to an individual until
a distribution occurs, either by a withdrawal of part or all of its value or
as a series of periodic payments. However, there are some exceptions to this
rule: (1) if a Certificate fails the investment diversification requirements;
(2) if an individual transfers a Certificate as a gift to someone other than a
spouse (or divorced spouse), any gain in its Annuity Account Value will be
taxed at the time of transfer; (3) the assignment or pledge of any portion of
the value of a Certificate will be treated as a distribution of that portion
of the Certificate; and (4) when an insurance company (or its affiliate)
issues more than one non-qualified deferred annuity certificate or contract
during any calendar year to the same taxpayer, the certificates or contracts
are required to be aggregated in computing the taxable amount of any
distribution.
Corporations, partnerships, trusts and other non-natural persons generally
cannot defer the taxation of current income credited to the Certificate unless
an exception under the Code applies.
Prior to the Annuity Commencement Date, any withdrawals which do not terminate
your total interest in the Certificate are taxable to you as ordinary income
to the extent there has been a gain in the Annuity Account Value. The balance
of the distribution is treated as a return of the "investment" or "basis" in
the Certificate and is not taxable. Generally, the investment or basis in the
Certificate equals the contributions made, less any amounts previously
withdrawn which were not taxable. Special rules may apply if contributions
made to another annuity certificate or contract prior to August 14, 1982 are
transferred to a Certificate in a tax-free exchange. To take advantage of
these rules, you should notify us prior to such an exchange.
If you surrender or cancel the Certificate, the distribution is taxable to the
extent it exceeds the investment in the Certificate.
Once annuity payments begin, a portion of each payment is considered to be a
tax-free recovery of investment based on the ratio of the investment to the
expected return under the Certificate. The remainder of each payment will be
taxable. In the case of a variable annuity, special rules apply if the
payments received in a year are less than the amount permitted to be recovered
tax-free. In the case of a life annuity, after the total investment has been
recovered, future payments are fully taxable. If payments cease as a result of
death, a deduction for any unrecovered investment will be allowed.
The taxable portion of a distribution is treated as ordinary income and is
subject to income tax withholding. See "Federal and State Income Tax
Withholding" below. In addition, a penalty tax of 10% applies to the taxable
portion of a distribution unless the distribution is (1) made on or after the
date the taxpayer attains age 59 1/2, (2) made on or after the taxpayer's
death, (3) attributable to the disability of the taxpayer, (4) part of a
series of substantially equal installments as an annuity for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life expectancies) of
the taxpayer and a beneficiary, or (5) with respect to income allocable to
43
<PAGE>
amounts contributed to an annuity certificate or contract prior to August 14,
1982 which are transferred to the Certificate in a tax-free exchange.
If, as a result of the Annuitant's death, the beneficiary is entitled to
receive the death benefit described in Part 4, the beneficiary is generally
subject to the same tax treatment as would apply to you, had you surrendered
the Certificate (discussed above).
If the beneficiary elects to take the death benefit in the form of a life
income or installment option, the election should be made within 60 days after
the day on which a lump sum death benefit first becomes payable and before any
benefit is actually paid. The tax computation will reflect your investment in
the Certificate.
The Certificate provides a minimum guaranteed death benefit that in certain
circumstances may be greater than either the contributions made or the Annuity
Account Value. This provision provides investment protection against an
untimely termination of a Certificate on the death of an Annuitant at a time
when the Certificate's Annuity Account Value might otherwise have provided a
lower benefit. Although we do not believe that the provision of this benefit
should have any adverse tax effect, it is possible that the IRS could take a
contrary position and could assert that some portion of the charges for the
minimum guaranteed death benefit should be treated for Federal income tax
purposes as a partial withdrawal from the Certificate. If this were so, such a
deemed withdrawal could be taxable, and for Certificate Owners under age 59
1/2, also subject to tax penalty.
You should discuss with your tax adviser the effect of any surrender or
withdrawal under the Accumulator Certificate after amounts have been applied
to the Life Contingent Annuity.
FEDERAL AND STATE INCOME TAX
WITHHOLDING
Equitable Life is required to withhold Federal income tax on the taxable
portion of annuity payments, unless the recipient elects not to be subject to
income tax withholding. The rate of withholding will depend on the type of
distribution and, in certain cases, the amount of the distribution. Special
withholding rules apply to foreign recipients and United States citizens
residing outside the United States. If a recipient does not have sufficient
income tax withheld or does not make sufficient estimated income tax payments,
however, the recipient may incur penalties under the estimated income tax
rules. Recipients should consult their tax advisers to determine whether they
should elect out of withholding. Requests not to withhold Federal income tax
must be made in writing prior to receiving benefits under the Certificate. Our
Processing Office will provide forms for this purpose. No election out of
withholding is valid unless the recipient provides us with the correct
taxpayer identification number and a United States residence address.
Certain states have indicated that income tax withholding will apply to
payments made from the Certificate to residents. In some states, a recipient
may elect out of state withholding. 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 and consult your tax
adviser.
Periodic payments are generally subject to wage-bracket type withholding (as
if such payments were payments of wages by an employer to an employee) unless
the recipient elects no withholding. If a recipient does not elect out of
withholding or does not specify the number of withholding exemptions,
withholding will generally be made as if the recipient is married and claiming
three withholding exemptions. There is an annual threshold of taxable income
from periodic annuity payments which is exempt from withholding based on this
assumption. For 1997, a recipient of periodic payments (e.g., monthly or
annual payments) which total less than a $14,400 taxable amount will generally
be exempt from Federal income tax withholding, unless the recipient specifies
a different choice of withholding exemption. A withholding election may be
revoked at any time and remains effective until revoked. If a recipient fails
to provide a correct taxpayer identification number, withholding is made as if
the recipient is single with no exemptions.
A recipient of a non-periodic distribution (total or partial) will generally
be subject to withholding at a flat 10% rate. A recipient who provides a
United States residence address and a correct taxpayer identification number
will generally be permitted to elect not to have tax withheld.
All recipients receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right to make
withholding elections.
OTHER WITHHOLDING
As a general rule, if death benefits are payable to a person two or more
generations younger than you, a Federal generation skipping tax may be payable
with respect to the benefit at rates similar to the maximum estate tax rate in
effect at the time. The generation skipping tax provisions generally apply
44
<PAGE>
to transfers which would also be subject to the gift and estate tax rules.
Individuals are generally allowed an aggregate generation skipping tax
exemption of $1 million. Because these rules are complex, you should consult
with your tax adviser for specific information, especially where benefits are
passing to younger generations, as opposed to a spouse or child.
If we believe a benefit may be subject to generation skipping tax we may be
required to withhold for such tax unless we receive acceptable written
confirmation that no such tax is payable.
SPECIAL RULES FOR CERTIFICATES ISSUED IN PUERTO RICO
Under current law Equitable Life treats income from Accumulator Certificates
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 Accumulator Certificates is also
subject to Puerto Rico tax. The computation of the taxable portion of amounts
distributed from a Certificate may differ in the two jurisdictions. Therefore,
an individual might have to file both U.S. and Puerto Rico tax returns,
showing different amounts of income for each. Puerto Rico generally provides a
credit against Puerto Rico tax for U.S. tax paid. Depending on an individual's
personal situation and the timing of the different tax liabilities, an
individual may not be able to take full advantage of this credit.
Please consult your tax adviser to determine the applicability of these rules
to your own tax situation.
IMPACT OF TAXES TO EQUITABLE LIFE
The Certificates provide that Equitable Life may charge the Separate Account
for taxes. Equitable Life can set up reserves for such taxes.
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers among the Investment Funds or between the Guaranteed Period Account
and one or more Investment Funds are not taxable.
45
<PAGE>
- ------------------------------------------------------------------------------
PART 8: KEY FACTORS IN RETIREMENT PLANNING
- ------------------------------------------------------------------------------
INTRODUCTION
The Accumulator is available to help meet the retirement income and investment
needs of individuals. 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 planning early for retirement; (3) the benefits of
tax-deferral; (4) the selection of an appropriate investment strategy; and (5)
the benefit of annuitization. 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, including the
Accumulator. In addition, unless otherwise noted, none of the illustrations
reflect any charges that may be applied under a particular investment vehicle,
including the Accumulator. 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. Monies are taxed upon withdrawal and a 10% penalty tax may apply
to premature withdrawals. Certain retirement programs prohibit early
withdrawals. See "Part 7: Tax Aspects of the Certificates." 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
Part 8 (other than charts 1, 2, 3, 4 and 7) is Ibbotson Associates, Inc.
Chicago. Stocks, Bonds, Bills and Inflation 1996 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 retirement, 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 that follow illustrate the detrimental impact of inflation over an
extended period of time. Between 1965 and 1995, the average annual inflation
rate was 5.39%. As demonstrated in Chart 1, this 5.39% annual rate of
inflation would cause the purchasing power of $35,000 to decrease to only
$7,246 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
1965-1995 historical inflation rate of 5.39% is used. In this case, an
additional $134,064 would be required to maintain the purchasing power of
$35,000 after 30 years.
CHART 1
[THE FOLLOWING TABLE WAS REPRESENTED AS A
3-D BAR GRAPH IN THE PROSPECTUS]
Today -- $35,000
10 years -- $20,705
20 years -- $12,248
30 years -- $ 7,246
[END OF GRAPHICALLY REPRESENTED DATA]
CHART 2
ANNUAL INCOME NEEDED
[THE FOLLOWING TABLE WAS REPRESENTED AS A
3-D BAR GRAPH IN THE PROSPECTUS]
Today -- $ 35,000
10 years -- $ 59,165
20 years -- $100,013
30 years -- $169,064
Increase Needed: $24,165 $65,013 $134,064
[END OF GRAPHICALLY REPRESENTED DATA]
46
<PAGE>
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 or her retirement program beginning at age 30, he or she would accumulate
$414,551 by age 65 under the assumptions described earlier. If that individual
waited until age 50, he or she would only accumulate $70,193 by age 65 under
the same assumptions.
CHART 3
[THE FOLLOWING TABLE WAS REPRESENTED AS
A STACKED AREA GRAPH IN THE PROSPECTUS:]
30 ................. $414,551
40 ................. $182,691
50 ................. $ 70,193
BLACK - Age 30 GRAY - Age 40 DOTTED - Age 50
[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 or she 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 or she would
accumulate only $97,804 under our assumptions.
TABLE 1
MONTHLY YEAR YEAR YEAR YEAR YEAR
CONTRIBUTION 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 52,969 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 or she starts at age 30, under our assumptions he
or she 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 or she would have to make a
monthly pre-tax contribution of $767 (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 TABLE WAS REPRESENTED
AS A BAR GRAPH IN THE PROSPECTUS:]
$ 93 a Month ............. 30 $39,265 $210,735
$212 a Month ............. 40 $63,641 $186,359
$552 a Month ............. 50 $99,383 $150,617
BLACK - Net Cost
WHITE - Tax-Deferred Earnings at 7.5%
[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. An example of this type of program is the deductible Individual
Retirement Annuity (IRA).
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 IRAs and non-qualified annuities.
The third approach to retirement savings is fully taxable. Contributions are
made with after-tax dol-
47
<PAGE>
lars 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 $2,000 annual pre-tax
contribution is made for thirty years. In this example, the retirement funds
would be $176,363 after thirty years (assuming a 7.5% rate of return, no
withdrawals and assuming the deduction of the 1.15% Separate Account daily
asset charge and the $30 annual contract fee--but no withdrawal charge or
other charges under the Certificate, or Trust charges to Portfolios), and such
funds would be $222,309 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 $126,981 and $160,062, respectively.
For the type of program that offers only tax-deferral, assume an after-tax
annual contribution of $1,440 for thirty years and the same rate of return.
The after-tax contribution is derived by taxing the $2,000 pre-tax
contribution again assuming a 28% tax bracket. In this example, the retirement
funds would be $126,275 after thirty years assuming the deduction of charges
and no withdrawals, and $160,062 without the effect of charges. Assuming a
lump sum withdrawal in year thirty, the total after-tax amount would be
$103,014 with charges deducted and $127,341 without charges as described
above.
For the fully taxable investment, assume an after-tax contribution of $1,440
for thirty years. Earnings are taxed annually. After thirty years, the amount
of this fully taxable investment is $108,046.
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.
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.
During the 1965-1995 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" below. Common stocks earned an
average annual return of 10.68% over this period, in contrast to 6.72% and
7.92% for the other two investment categories. Significantly, common stock
returns also outpaced inflation which grew at 5.39% over this period.
Although common stock returns have historically outpaced returns of fixed
investments, people often allocate a significant percentage of their
retirement funds to fixed return investments. Their primary concern is the
preservation of principal. Given this concern, Chart 5 illustrates the impact
of exposing only the interest generated by a fixed investment to the stock
market. In this illustration, the fixed investment is represented by a
Treasury Bill return and the stock investment is represented by the Standard &
Poor's 500 ("S&P 500").
The chart assumes that a $20,000 fixed investment was made on January 1, 1980.
If the interest on that investment were to accumulate based upon the return of
the S&P 500, the total investment would have been worth $131,033 in 1995. Had
the interest been reinvested in the fixed investment, the fixed investment
would have grown to $62,379. As illustrated in Chart 5, significant
opportunities for growth exist while preserving principal. See "Notes" below.
CHART 5
$131,033 with Interest Exposed to Stock Market (S&P 500)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PROSPECTUS]
Market Value Market Value
Month of S&P 500 If 100% in
Ending & Fixed Acct 3 Mo. T-Bill
1980 J 20,160 20,160
F 20,338 20,339
M 20,547 20,586
A 20,823 20,845
M 21,031 21,014
J 21,183 21,142
J 21,369 21,254
A 21,515 21,390
S 21,708 21,550
O 21,930 21,755
N 22,333 21,964
D 22,522 22,252
1981 J 22,619 22,483
F 22,888 22,724
M 23,239 22,999
A 23,386 23,247
M 23,637 23,514
J 23,878 23,832
J 24,129 24,127
A 24,156 24,436
S 24,196 24,739
O 24,659 25,039
N 25,079 25,306
D 25,118 25,527
1982 J 25,195 25,731
F 25,113 25,968
M 25,278 26,222
A 25,722 26,518
M 25,770 26,799
J 25,861 27,057
J 25,945 27,341
A 26,850 27,549
S 27,028 27,689
O 27,937 27,852
N 28,411 28,028
D 28,690 28,216
1983 J 29,131 28,410
F 29,492 28,587
M 29,965 28,767
A 30,862 28,971
M 30,943 29,171
J 31,495 29,366
J 31,284 29,584
A 31,627 29,808
S 31,938 30,035
O 31,930 30,263
N 32,348 30,475
D 32,418 30,698
1984 J 32,490 30,931
F 32,222 31,150
M 32,577 31,378
A 32,826 31,632
M 32,297 31,879
J 32,719 32,118
J 32,701 32,381
A 34,295 32,650
S 34,470 32,931
O 34,708 33,260
N 34,705 33,503
D 35,205 33,717
1985 J 36,503 33,936
F 36,845 34,133
M 37,000 34,345
A 37,089 34,592
M 38,272 34,820
J 38,673 35,012
J 38,748 35,229
A 38,744 35,423
S 38,262 35,635
O 39,208 35,867
N 40,706 36,086
D 41,803 36,320
1986 J 42,011 36,524
F 43,792 36,717
M 45,230 36,938
A 45,021 37,130
M 46,493 37,312
J 47,036 37,506
J 45,602 37,701
A 47,609 37,874
S 45,430 38,045
O 46,935 38,220
N 47,703 38,369
D 47,070 38,557
1987 J 50,789 38,719
F 52,147 38,885
M 53,115 39,068
A 52,912 39,240
M 53,327 39,389
J 55,086 39,578
J 56,925 39,760
A 58,441 39,947
S 57,685 40,127
O 49,695 40,367
N 47,333 40,509
D 49,428 40,667
1988 J 50,743 40,785
F 52,280 40,972
M 51,393 41,152
A 51,824 41,342
M 52,174 41,553
J 53,765 41,756
J 53,732 41,969
A 52,733 42,217
S 54,245 42,478
O 55,302 42,738
N 54,915 42,981
D 55,673 43,252
1989 J 58,362 43,490
F 57,529 43,755
M 58,548 44,048
A 60,672 44,343
M 62,465 44,694
J 62,377 45,011
J 66,323 45,326
A 67,365 45,662
S 67,310 45,958
O 66,344 46,271
N 67,446 46,590
D 68,687 46,874
1990 J 65,533 47,142
F 66,234 47,410
M 67,578 47,714
A 66,541 48,043
M 71,214 48,370
J 70,982 48,674
J 70,955 49,005
A 66,481 49,329
S 64,314 49,625
O 64,286 49,962
N 67,252 50,247
D 68,667 50,548
1991 J 70,922 50,811
F 74,664 51,055
M 76,053 51,280
A 76,316 51,552
M 78,820 51,794
J 76,216 52,011
J 78,945 52,266
A 80,422 52,507
S 79,523 52,748
O 80,405 52,970
N 78,042 53,176
D 84,752 53,378
1992 J 83,616 53,560
F 84,486 53,710
M 83,290 53,892
A 85,196 54,065
M 85,604 54,216
J 84,717 54,390
J 87,387 54,558
A 86,078 54,700
S 86,890 54,842
O 87,176 54,969
N 89,486 55,095
D 90,453 55,249
1993 J 91,013 55,376
F 92,016 55,498
M 93,614 55,637
A 91,858 55,770
M 93,843 55,893
J 94,136 56,033
J 93,836 56,167
A 96,699 56,308
S 96,183 56,454
O 97,774 56,578
N 97,093 56,720
D 98,087 56,850
1994 J 100,753 56,992
F 98,615 57,112
M 95,249 57,266
A 96,281 57,421
M 97,589 57,605
J 95,734 57,783
J 98,297 57,945
A 101,558 58,159
S 99,666 58,375
O 101,566 58,596
N 98,647 58,813
D 99,883 59,072
1995 J 102,044 59,320
F 105,307 59,557
M 107,925 59,831
A 110,571 60,095
M 114,257 60,419
J 116,566 60,703
J 119,871 60,976
A 120,235 61,263
S 124,521 61,526
O 124,249 61,816
N 128,920 62,075
D 131,033 63,379
$62,379 Without Interest Exposed to Stock Market
(S&P 500)
[END OF GRAPHICALLY REPRESENTED DATA]
Another variation of the example in Chart 5 is to gradually transfer principal
from a fixed investment into the stock market. Chart 6 assumes that a $20,000
fixed investment was made on January 1, 1980. For the next two years, $540 is
transferred monthly into the stock market (represented by the S&P 500). The
total investment, given this strategy,
48
<PAGE>
would have grown to $139,695 in 1995. In contrast, had the principal not been
transferred, the fixed investment would have grown to $62,379. See "Notes"
below.
CHART 6
$139,695 with Principal Transfer
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PROSPECTUS]
Market Value Market Value
Month of S&P 500 If 100% in
Ending & Fixed Acct 3 Mo. T-Bil
1980 J 20540 20160
F 20702 20339
M 20770 20586
A 21068 20845
M 21425 21014
J 21659 21142
J 22000 21254
A 22149 21390
S 22394 21550
O 22623 21755
N 23446 21964
D 23372 22252
1981 J 23246 22483
F 23569 22724
M 24053 22999
A 24031 23247
M 24246 23514
J 24324 23832
J 24514 24127
A 24051 24436
S 23651 24739
O 24397 25039
N 25087 25306
D 24857 25527
1982 J 24193 25731
F 23594 25968
M 23618 26222
A 24248 26518
M 23995 26799
J 23892 27057
J 23731 27341
A 25407 27549
S 25647 27689
O 27281 27852
N 28031 28028
D 28386 28216
1983 J 29041 28410
F 29568 28587
M 30282 28767
A 31737 28971
M 31721 29171
J 32549 29366
J 32000 29584
A 32424 29808
S 32790 30035
O 32616 30263
N 33176 30475
D 33142 30698
1984 J 33104 30931
F 32544 31150
M 32969 31378
A 33202 31632
M 32246 31879
J 32767 32118
J 32593 32381
A 34841 32650
S 34959 32931
O 35133 33260
N 35058 33503
D 35692 33717
1985 J 37434 33936
F 37844 34133
M 37970 34345
A 37984 34592
M 39531 34820
J 40023 35012
J 40038 35229
A 39976 35423
S 39254 35635
O 40428 35867
N 42341 36086
D 43701 36320
1986 J 43926 36524
F 46184 36717
M 47968 36938
A 47659 37130
M 49498 37312
J 50136 37506
J 48265 37701
A 50769 37874
S 47982 38045
O 49830 38220
N 50767 38369
D 49918 38557
1987 J 54519 38719
F 56165 38885
M 57317 39068
A 57035 39240
M 57525 39389
J 59630 39578
J 61849 39760
A 63662 39947
S 62711 40127
O 52932 40367
N 50090 40509
D 52585 40667
1988 J 54165 40785
F 55951 40972
M 54862 41152
A 55344 41342
M 55720 41553
J 57582 41756
J 57509 41969
A 56280 42217
S 58018 42478
O 59225 42738
N 58749 42981
D 59588 43252
1989 J 62695 43490
F 61691 43755
M 62824 44048
A 65234 44343
M 67232 44694
J 67118 45011
J 71581 45326
A 72728 45662
S 72661 45958
O 71544 46271
N 72760 46590
D 74150 46874
1990 J 70617 47142
F 71385 47410
M 72851 47714
A 71676 48043
M 76833 48370
J 76576 48674
J 76526 49005
A 71611 49329
S 69246 49625
O 69192 49962
N 72438 50247
D 73964 50548
1991 J 76420 50811
F 80470 51055
M 81977 51280
A 82241 51552
M 84947 51794
J 82165 52011
J 85076 52266
A 86666 52507
S 85709 52748
O 86662 52970
N 84157 53176
D 91300 53378
1992 J 90106 53560
F 91047 53710
M 89770 53892
A 91798 54065
M 92244 54216
J 91302 54390
J 94130 54558
A 92765 54700
S 93626 54842
O 93940 54969
N 96377 55095
D 97388 55249
1993 J 97994 55376
F 99055 55498
M 100732 55637
A 98899 55770
M 100989 55893
J 101297 56033
J 100991 56167
A 103992 56308
S 103458 56454
O 105136 56578
N 104425 56720
D 105474 56850
1994 J 108259 56992
F 106046 57112
M 102533 57266
A 103617 57421
M 104976 57605
J 103062 57783
J 105741 57945
A 109118 58159
S 107170 58375
O 109151 58596
N 106146 58813
D 107426 59072
1995 J 109681 59320
F 113071 59557
M 115775 59831
A 118526 60095
M 122319 60419
J 124733 60703
J 128155 60976
A 128547 61263
S 132973 61526
O 132710 61816
N 137525 62075
D 139695 62379
$62,379 Without Principal Transfer
[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.
The Accumulator can be an effective program for diversifying ongoing
investments between various asset categories. In addition, the Accumulator
offers special features which help address the risk associated with timing the
equity markets, such as dollar cost averaging. By transferring the same dollar
amount each month from the Money Market Fund to other Investment Funds, dollar
cost averaging attempts to shield your investment from short term price
fluctuations. This, however, does not assure a profit or protect against a
loss in declining markets.
THE BENEFIT OF ANNUITIZATION
An individual may shift the risk of outliving his or her principal by electing
a lifetime income annuity. See "Income Annuity Options," in Part 5. Chart 7
below shows the monthly income that can be generated under various forms of
life annuities, as compared to receiving level payments of interest only or
principal and interest from the investment. Calculations in the Chart are
based on the following assumption: a $100,000 contribution was made at one of
the ages shown, annuity payments begin immediately, and a 5% annuitization
interest rate is used. For purposes of this example, principal and interest
are paid out on a level basis over 15 years. In the case of the interest only
scenario, the principal is always available and may be left to other
individuals at death. Under the principal and interest scenario, a portion of
the principal will be left at death, assuming the individual dies within the
15 year period. In contrast, under the life annuity scenarios, there is no
residual amount left.
CHART 7
MONTHLY INCOME
($100,000 CONTRIBUTION)
<TABLE>
<CAPTION>
JOINT AND SURVIVOR*
-----------------------------------
Principal
Interest and
Only Interest for Single 50% to 66.67% to 100% to
Annuitant for Life 15 Years Life Survivor Survivor Survivor
- ----------- ---------- -------------- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Male 65 $401 $785 $ 617 $560 $544 $513
Male 70 401 785 685 609 588 549
Male 75 401 785 771 674 646 598
Male 80 401 785 888 760 726 665
Male 85 401 785 1,045 878 834 757
</TABLE>
- ------------
The numbers are based on 5% interest compounded annually and the 1983
Individual Annuity Mortality Table "a" projected with modified Scale G.
Annuity purchase rates available at annuitization may vary, depending
primarily on the annuitization interest rate, which may not be less than an
annual rate of 2.5%.
* The Joint and Survivor Annuity Forms are based on male and female
Annuitants of the same age.
49
<PAGE>
- ---------------------------------------------------------------------------
PART 9: INDEPENDENT ACCOUNTANTS
- ---------------------------------------------------------------------------
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life at December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996 included in Equitable Life's
Annual Report on Form 10-K, incorporated by reference in the prospectus, have
been examined by Price Waterhouse LLP, independent accountants, whose reports
thereon are incorporated herein by reference. Such consolidated financial
statements and consolidated financial statement schedules have been
incorporated herein by reference in reliance upon the reports of Price
Waterhouse LLP given upon their authority as experts in accounting and
auditing.
50
<PAGE>
APPENDIX I: 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 were
allocated on February 15, 1998 to a Guarantee Period with an Expiration Date
of February 15, 2007 at a Guaranteed Rate of 7.00% resulting in a Maturity
Value at the Expiration Date of $183,846, and further assuming that a
withdrawal of $50,000 were made on February 15, 2002.
ASSUMED
GUARANTEED RATE ON
FEBRUARY 15, 2002
----------------------
5.00% 9.00%
---------- ----------
As of February 15, 2002 (Before
Withdrawal)
- -----------------------------------------
(1) Present Value of Maturity Value, also
Annuity Account Value ................ $144,048 $119,487
(2) Guaranteed Period Amount ............. 131,080 131,080
(3) Market Value Adjustment: (1)-(2) .... 12,968 (11,593)
February 15, 2002 (After Withdrawal)
- -----------------------------------------
(4) Portion of (3) Associated
with Withdrawal: (3) x [$50,000 /
(1)] ................................. $ 4,501 $ (4,851)
(5) Reduction in Guaranteed
Period Amount: [$50,000-(4)] ........ 45,499 54,851
(6) Guaranteed Period Amount: (2)-(5) ... 85,581 76,229
(7) Maturity Value ....................... 120,032 106,915
(8) Present Value of (7), also
Annuity Account Value ................ 94,048 69,487
You should note that under this example if a withdrawal is made when rates
have increased (from 7.00% to 9.00% in the example), a portion of 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% in the example), a portion
of a positive market value adjustment is realized.
51
<PAGE>
APPENDIX II: QUALIFIED PLAN CERTIFICATES
- -----------------------------------------------------------------------------
CONTRIBUTIONS
When issued with the appropriate endorsement, Accumulator Certificates may be
used as an investment vehicle for a defined contribution plan maintained by an
employer and which is a tax qualified plan within the meaning of Section
401(a) for the Code.
When issued in connection with such a qualified plan, we will only accept
employer contributions from a trust under a plan qualified under Section
401(a) of the Code. If the plan contains a cash or deferred arrangement within
the meaning of Section 401(k) of the Code, contributions may include employee
pre-tax and employer matching or other employer contributions, but not
employee after-tax contributions to the plan.
CERTIFICATE OWNER, ANNUITANT AND BENEFICIARY
The Certificate Owner must be the trustee of a trust for a qualified plan
maintained by the employer. The Annuitant must be the participant/employee and
the beneficiary under the Certificate must be the Certificate Owner.
PURCHASE CONSIDERATIONS
Any trustee considering a purchase of the Accumulator should discuss with its
tax adviser whether this is an appropriate investment vehicle for the
employer's plan. The form of Certificate and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
This Certificate accepts transfer contributions only and not regular, ongoing
payroll contributions. For 401(k) plans, no employee after-tax contributions
are accepted. Further, Equitable will not perform or provide any plan record
keeping services with respect to this Certificate. The plan's administrator
will be solely responsible for performing or providing for all such services.
There is no loan feature offered under the Certificates, so if the plan
provides for loans and a participant takes a loan from the plan, other plan
assets must be used as the source of the loan and any loan repayments must be
credited to other investment vehicles and/or accounts available under the
plan.
Finally, because the method of purchasing the Certificates and the features of
the Certificates may appeal more to plan participants who are older and tend
to be highly paid, and because certain features of the Certificates are
available only to plan participants who meet certain minimum and/or maximum
age requirements, plan trustees should discuss with their advisers whether the
purchase of the Certificates would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
52
<PAGE>
APPENDIX III: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE
- -----------------------------------------------------------------------------
Under the Certificates the death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
the GMDB (see "GMDB" in Part 4); and
(2) the death benefit provided with respect to the Guaranteed Period
Account (see "Death Benefit Amount" in Part 3).
The following is an example illustrating the calculation of the GMDB. Assuming
$100,000 is allocated to the Investment Funds (with no allocation to the Fixed
Income Series), no subsequent contributions, no transfers and no withdrawals,
the GMDB for an Annuitant age 45 would be calculated as follows:
END OF
CONTRACT ANNUITY NON-NEW YORK NEW YORK
YEAR ACCOUNT VALUE GMDB(1) GMDB
- ---------- --------------- -------------- -------------
1 $105,000 $106,000 $105,000(2)
2 $105,500 $112,360 $115,500(2)
3 $132,825 $119,102 $132,825(2)
4 $106,260 $126,248 $132,825(3)
5 $116,886 $133,823 $132,825(3)
6 $140,263 $141,852 $140,263(2)
7 $140,263 $150,363 $140,263(3)
The Annuity Account Values for Contract Years 1 through 8 are determined based
on hypothetical rates of return of 5.00%, 10.00%, 15.00%, (20.00)%, 10.00%,
20.00% and 0.00%, respectively.
6% TO AGE 80 BENEFIT
(1) For Contract Years 1 through 7, the GMDB equals the initial contribution
increased by 6%.
NEW YORK ANNUAL RATCHET TO AGE 80
(2) At the end of Contract Years 1, 2 and 3, and again at the end of
Contract Year 6, the GMDB is equal to the current Annuity Account Value.
(3) At the end of Contract Years 4, 5 and 7, the GMDB is equal to the GMDB
at the end of the prior year since it is higher than the current Annuity
Account Value.
53
<PAGE>
- ---------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- ---------------------------------------------------------------------------
PAGE
----
Part 1: Accumulation Unit Values 2
Part 2: Annuity Unit Values 2
Part 3: Custodian and Independent Accountants 3
Part 4: Money Market Fund and Intermediate 3
Government Securities Fund Yield Information
Part 5: Long-Term Market Trends 4
Part 6: Financial Statements 6
HOW TO OBTAIN AN ACCUMULATOR STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 45
Send this request form to:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an Accumulator SAI:
---------------------------------------------------------
Name
---------------------------------------------------------
Address
---------------------------------------------------------
City State Zip
54
<PAGE>
INCOME MANAGERSM
ROLLOVER IRA
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1997
- -----------------------------------------------------------------------------
COMBINATION VARIABLE AND
FIXED DEFERRED ANNUITY CERTIFICATES
FUNDED THROUGH THE
INVESTMENT FUNDS OF SEPARATE ACCOUNT NO. 45
<TABLE>
<CAPTION>
<S> <C> <C>
HR TRUST EQ TRUST
- ----------------------------- --------------------------------------------------------------------------------------------
ASSET ALLOCATION SERIES: O T. ROWE PRICE INT'L STOCK O MFS RESEARCH
O (ALLIANCE) CONSERVATIVE O T. ROWE PRICE EQUITY O MFS EMERGING GROWTH
INVESTORS INCOME COMPANIES
O (ALLIANCE) GROWTH O EQ/PUTNAM GROWTH & INCOME O MORGAN STANLEY EMERGING
INVESTORS VALUE MARKETS EQUITY
EQUITY SERIES: O EQ/PUTNAM INT'L EQUITY O WARBURG PINCUS SMALL
O (ALLIANCE) GROWTH & O EQ/PUTNAM INVESTORS GROWTH COMPANY VALUE
INCOME O EQ/PUTNAM BALANCED O MERRILL LYNCH GLOBAL
O (ALLIANCE) COMMON STOCK ALLOCATION
O (ALLIANCE) GLOBAL O MERRILL LYNCH BASIC VALUE
</TABLE>
O (ALLIANCE) INTERNATIONAL
O (ALLIANCE) AGGRESSIVE
STOCK
O ALLIANCE) SMALL CAP
GROWTH
O (ALLIANCE) EQUITY INDEX
FIXED INCOME SERIES:
O (ALLIANCE) MONEY MARKET
O (ALLIANCE) INTERMEDIATE
GOVERNMENT SECURITIES
ISSUED BY:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Home Office: 1290 Avenue of the Americas, New York, NY 10104
Processing Office: Post Office Box 1547, Secaucus, NJ 07096-1547
This statement of additional information (SAI) is not a prospectus. It should
be read in conjunction with the Separate Account No. 45 prospectus for the
Rollover IRA, dated May 1, 1997. 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, by calling 1-800-789-7771, toll-free, or by contacting
your Registered Representative.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
- ----------------------------------------------------------------------------------------- --------
<S> <C>
Part 1 Minimum Distribution Withdrawals 2
- ----------------------------------------------------------------------------------------- --------
Part 2 Accumulation Unit Values 2
- ----------------------------------------------------------------------------------------- --------
Part 3 Annuity Unit Values 2
- ----------------------------------------------------------------------------------------- --------
Part 4 Custodian and Independent Accountants 3
- ----------------------------------------------------------------------------------------- --------
Part 5 Money Market Fund and Intermediate Government Securities Fund Yield Information 3
- ----------------------------------------------------------------------------------------- --------
Part 6 Long-Term Market Trends 4
- ----------------------------------------------------------------------------------------- --------
Part 7 Financial Statements 6
- ----------------------------------------------------------------------------------------- --------
</TABLE>
Copyright 1997
The Equitable Life Assurance Society of the United States,
New York, New York 10104.
All rights reserved.
<PAGE>
PART 1 - MINIMUM DISTRIBUTION WITHDRAWALS
If you elect Minimum Distribution Withdrawals described in Part 5 of the
prospectus, each year we calculate the Minimum Distribution Withdrawal amount
by using the value of your IRA as of December 31 of the prior calendar year.
We then calculate the minimum distribution amount based on the various
choices you make. This calculation takes into account withdrawals made during
the current calendar year but prior to the date we determine your Minimum
Distribution Withdrawal amount, except that when Minimum Distribution
Withdrawals are elected in the year in which you attain age 71 1/2, no
adjustment will be made for any withdrawals made between January 1 and April
1 in satisfaction of the minimum distribution requirement for the prior year.
An election can also be made (1) to have us recalculate your life expectancy,
or joint life expectancies, each year or (2) to have us determine your life
expectancy, or joint life expectancies, once and then subtract one year, each
year, from that amount. The joint life options are only available if the
spouse is the beneficiary. However, if you first elect Minimum Distribution
Withdrawals after April 1 of the year following the calendar year in which
you attain age 70 1/2, option (1) will apply.
PART 2 - ACCUMULATION UNIT VALUES
Accumulation Unit Values are determined at the end of each Valuation Period
for each of the Investment Funds. Other annuity contracts and certificates
which may be offered by us will have their own accumulation unit values for
the Investment Funds which may be different from those for the Rollover IRA.
The Accumulation Unit Value for an Investment Fund for any Valuation Period
is equal to the Accumulation Unit Value for the preceding Valuation Period
multiplied by the Net Investment Factor for that Investment Fund for that
Valuation Period. The NET INVESTMENT FACTOR is (a) - c where:
---
(b)
(a) is the value of the Investment Fund's shares of the corresponding
Portfolio at the end of the Valuation Period before giving effect to
any amounts allocated to or withdrawn from the Investment Fund for the
Valuation Period. For this purpose, we use the share value reported to
us by HR Trust or EQ Trust, as applicable.
(b) is the value of the Investment Fund's shares of the corresponding
Portfolio at the end of the preceding Valuation Period (after any
amounts allocated or withdrawn for that Valuation Period).
(c) is the daily Separate Account mortality and expense risks charge and
administration charge relating to the Certificates, times the number of
calendar days in the Valuation Period. These daily charges are at an
effective annual rate not to exceed a total of 1.15%.
PART 3 - ANNUITY UNIT VALUES
The annuity unit for each Investment Fund value was fixed at $1.00 on ,
1997 for Certificates with assumed base rates of net investment return of
both 5% and 3 1/2% a year. For each Valuation Period after that date, it is
the annuity unit value for the immediately preceding Valuation Period
multiplied by the adjusted Net Investment Factor under the Certificate. For
each Valuation Period, the adjusted Net Investment Factor is equal to the Net
Investment Factor reduced for each day in the Valuation Period by:
o .00013366 of the Net Investment Factor if the assumed base rate of net
investment return is 5% a year; or
o .00009425 of the Net Investment Factor if the assumed base rate of net
investment return is 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 deduction of
charges) is higher or lower than the assumed base rate.
All Certificates have a 5% assumed base rate of net investment return, except
in states where that rate is not permitted. Annuity payments under
Certificates with an assumed base rate of 3 1/2% will at first be smaller
than those under Certificates with a 5% assumed base
2
<PAGE>
rate. Payments under the 3 1/2% Certificates, however, will rise more rapidly
when unit values are rising, and payments will fall more slowly when unit
values are falling than those under 5% Certificates.
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 and are made on a monthly
basis. The first three payments are of equal amounts. Each of the first three
payments will be based on the amount specified in the Tables of Guaranteed
Annuity Payments in the Certificate.
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
involved a life contingency, the risk class and the age of the annuitants
will affect payments.
The amount of the fourth and each later payment will vary according to the
investment performance of the Investment Funds. Each monthly payment will be
calculated by multiplying the number of annuity units credited by the average
annuity unit value 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. Variable income annuities may also be available
by separate prospectus through the Investment Funds of other separate
accounts we offer.
Illustration of Changes in Annuity Unit Values. To show how we determine
variable annuity payments from month to month, assume that the Annuity
Account Value on an Annuity Commencement Date is enough to fund an annuity
with a monthly payment of $363 and that the annuity unit value for the
Valuation Period that includes the due date of the first annuity payment is
$1.05. The number of annuity units credited under the contract would be
345.71 (363 divided by 1.05 = 345.71).
If the fourth monthly payment is due in March, and the average annuity unit
value for January was $1.10, the annuity payment for March would be the
number of units (345.71) times the average annuity unit value ($1.10), or
$380.28. If the average annuity unit value was $1 in February, the annuity
payment for April would be 345.71 times $1, or $345.71.
PART 4 - CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable Life is the custodian for shares of the Trust owned by the Separate
Account.
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life at December 31, 1996 and 1995 and for each of the
three years ended December 31, 1996 included in the SAI have been audited by
Price Waterhouse LLP.
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life at December 31, 1996 and 1995 and for each of the
three years ended December 31, 1996 included in this SAI have been so
included in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of such firm as experts in accounting and
auditing.
PART 5 - MONEY MARKET FUND AND INTERMEDIATE
GOVERNMENT SECURITIES FUND YIELD INFORMATION
Money Market Fund
The Money Market Fund calculates yield information for seven-day periods. The
seven-day current yield calculation is based on a hypothetical Certificate
with one Accumulation Unit at the beginning of the period. To determine the
seven-day rate of return, the net change in the Accumulation Unit Value is
computed by subtracting the Accumulation Unit Value at the beginning of the
period from an Accumulation Unit Value, exclusive of capital changes, at the
end of the period.
Accumulation Unit Values reflect all other accrued expenses of the Money
Market Fund but do not reflect the withdrawal charge, the com-
3
<PAGE>
bined GMDB/GMIB charge or any charges for applicable taxes such as state or
local premium taxes.
The adjusted net change is divided by the Accumulation Unit Value at the
beginning of the period to obtain the adjusted base period rate of return.
This seven-day adjusted base period return is then multiplied by 365/7 to
produce an annualized seven-day current yield figure carried to the nearest
one-hundredth of one percent.
The effective yield is obtained by modifying the current yield to give effect
to the compounding nature of the Money Market Fund's investments, as follows:
the unannualized adjusted base period return is compounded by adding one to
the adjusted base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result, i.e., effective yield =
(base period return + 1 ) 365/7 -- 1. The Money Market Fund yields will
fluctuate daily. Accordingly, yields for any given period are not necessarily
representative of future results. In addition, the value of Accumulation
Units of the Money Market Fund will fluctuate and not remain constant.
Intermediate Government Securities Fund
The Intermediate Government Securities Fund calculates yield information for
30-day periods. The 30-day current yield calculation is based on a
hypothetical Certificate with one Accumulation Unit at the beginning of the
period. To determine the 30-day rate of return, the net change in the
Accumulation Unit Value is computed by subtracting the Accumulation Unit
Value at the beginning of the period from an Accumulation Unit Value,
exclusive of capital changes, at the end of the period.
Accumulation Unit Values reflect all other accrued expenses of the
Intermediate Government Securities Fund but do not reflect the withdrawal
charge, the combined GMDB/GMIB charge or any charges for applicable taxes
such as state or local premium taxes.
The adjusted net change is divided by the Accumulation Unit Value at the
beginning of the period to obtain the adjusted base period rate of return.
This 30-day adjusted base period return is then multiplied by 365/30 to
produce an annualized 30-day current yield figure carried to the nearest
one-hundredth of one percent.
The effective yield is obtained by modifying the current yield to give effect
to the compounding nature of the Intermediate Government Securities Fund's
investments, as follows: the unannualized adjusted base period return is
compounded by adding one to the adjusted base period return, raising the sum
to a power equal to 365 divided by 30, and subtracting one from the result,
i.e., effective yield = (base period return + 1) 365/30 -- 1. Intermediate
Government Securities Fund yields will fluctuate daily. Accordingly, yields
for any given period are not necessarily representative of future results. In
addition, the value of Accumulation Units of the Intermediate Government
Securities Fund will fluctuate and not remain constant.
Money Market Fund and Intermediate Government Securities Fund Yield
Information
The Money Market Fund and Intermediate Government Securities Fund yields
reflect charges that are not normally reflected in the yields of other
investments and therefore may be lower when compared with yields of other
investments. Money Market Fund and Intermediate Government Securities Fund
yields should not be compared to the return on fixed rate investments which
guarantee rates of interest for specified periods, such as the Guarantee
Periods. Nor should the yield be compared to the yield of money market funds
or government securities funds made available to the general public.
Because the Rollover IRA Certificates described in the prospectus are being
offered for the first time in 1997, no yield information is presented.
PART 6 - LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return
trends for various types of securities. The information presented, while not
directly related to the performance of the Investment Funds, helps to provide
a perspective on the potential returns of different asset classes over
different periods of time. By combining this information with knowledge of
your own financial needs (e.g., the length of time until you retire, your
financial requirements at retirement), you may be
4
<PAGE>
able to better determine how you wish to allocate contributions among the
Rollover IRA Investment Funds.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long-or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus
is on long-term growth potential and protection against inflation, there may
be advantages to allocating some or all of their Annuity Account Value to
those Investment Funds that invest in stocks.
Growth of $1 Invested on January 1, 1955
(Values are as of last business day)
[THE FOLLOWING TABLE WAS REPRESENTED AS A STACKED AREA
GRAPH IN THE PROSPECTUS]
S&P 500
TOTAL U.S.
RETURN INFLATION
------ ---------
INDEX VALUE
------ ---------
Dec 1954 1.00 1.00
Dec 1955 1.32 1.00
Dec 1956 1.40 1.03
Dec 1957 1.25 1.06
Dec 1958 1.79 1.08
Dec 1959 2.01 1.10
Dec 1960 2.02 1.11
Dec 1961 2.56 1.12
Dec 1962 2.34 1.14
Dec 1963 2.87 1.15
Dec 1964 3.34 1.17
Dec 1965 3.76 1.19
Dec 1966 3.38 1.23
Dec 1967 4.19 1.27
Dec 1968 4.65 1.33
Dec 1969 4.26 1.41
Dec 1970 4.43 1.49
Dec 1971 5.06 1.54
Dec 1972 6.02 1.59
Dec 1973 5.14 1.73
Dec 1974 3.78 1.94
Dec 1975 5.18 2.08
Dec 1976 6.42 2.18
Dec 1977 5.96 2.32
Dec 1978 6.35 2.53
Dec 1979 7.52 2.87
Dec 1980 9.96 3.23
Dec 1981 9.47 3.51
Dec 1982 11.50 3.65
Dec 1983 14.09 3.79
Dec 1984 14.97 3.94
Dec 1985 19.78 4.09
Dec 1986 23.44 4.13
Dec 1987 24.66 4.32
Dec 1988 28.81 4.51
Dec 1989 37.88 4.72
Dec 1990 36.68 5.00
Dec 1991 47.89 5.16
Dec 1992 51.56 5.31
Dec 1993 56.71 5.45
Dec 1994 57.45 5.60
Dec 1995 78.95 5.75
[END OF GRAPHICALLY REPRESENTED DATA]
- -----------------
[BLACK] Common Stock [WHITE] Inflation
Source: Ibbotson Associates, Inc. See discussion and information preceding
and following chart on next page.
Over shorter periods of time, however, common stocks tend to be subject to
more dramatic changes in value than fixed income (debt) securities. Investors
who are nearing retirement age, or who have a need to limit short-term risk,
may find it preferable to allocate a smaller percentage of their Annuity
Account Value to those Investment Funds that invest in common stocks. The
following graph illustrates the monthly fluctuations in value of $1 based on
monthly returns of the Standard & Poor's 500 during 1990, a year that
represents more typical volatility than 1995.
Growth of $1 Invested on January 1, 1990
(Values are as of last business date)
[THE FOLLOWING TABLE WAS REPRESENTED AS A SCATTER
GRAPH IN THE PROSPECTUS]
S&P 500
U.S. IT TOTAL
GVT TR RETURN
------ ---------
INDEX INDEX
------ ---------
Dec 1989 1.00 1.00
Jan 1990 0.99 0.93
Feb 1990 0.99 0.94
Mar 1990 0.99 0.97
Apr 1990 0.98 0.95
May 1990 1.01 1.04
Jun 1990 1.02 1.03
Jul 1990 1.04 1.03
Aug 1990 1.03 0.93
Sep 1990 1.04 0.89
Oct 1990 1.06 0.89
Nov 1990 1.08 0.94
Dec 1990 1.10 0.97
Common Stock Intermediate-Term Govt. Bonds
[END OF GRAPHICALLY REPRESENTED DATA]
Source: Ibbotson Associates, Inc. See discussion and information preceding
and following chart.
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1995 for different
types of securities: common stocks, long-term government bonds, long-term
corporate bonds, intermediate-term govern-ment 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 invest ment in securities, whether equity or debt,
involves varying degrees of potential risk, in addition to offering varying
degrees of potential reward.
5
<PAGE>
The rates of return illustrated do not represent returns of the Separate
Account. In addition, there is no assurance that the performance of the
Investment Funds will correspond to rates of return such as those illustrated
in the chart.
For a comparative illustration of performance results of the Investment Funds
(which reflect the Trust and Separate Account charges), see "Part 2:
Investment Performance" in the prospectus.
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
LONG-TERM INTERMEDIATE-
FOR THE FOLLOWING PERIODS COMMON LONG-TERM CORPORATE TERM U.S. TREASURY CONSUMER
ENDING 12/31/95 STOCKS GOVT. BONDS BONDS GOVT. BONDS BILLS PRICE INDEX
- ----------------------------- -------- ------------- ----------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 37.43% 31.67% 26.39% 16.80% 5.60% 2.74%
3 Years 15.26 12.82 10.47 7.22 4.13 2.72
5 Years 16.57 13.10 12.07 8.81 4.29 2.83
10 Years 14.84 11.92 11.25 9.08 5.55 3.48
20 Years 14.59 10.45 10.54 9.69 7.28 5.23
30 Years 10.68 7.92 8.17 8.36 6.72 5.39
40 Years 10.78 6.38 6.75 7.02 5.73 4.46
50 Years 11.94 5.35 5.75 5.87 4.80 4.36
60 Years 11.34 5.20 5.46 5.34 4.01 4.10
Since 12/31/26 10.54 5.17 5.69 5.25 3.72 3.12
Inflation adjusted since 1926 7.20 1.99 2.49 2.07 0.58 --
</TABLE>
SOURCE: Ibbotson, Roger G., and Rex A. Sinquefield, Stocks, Bonds, Bills, and
Inflation (SBBI), 1982, updated in Stocks, Bonds, Bills and Inflation 1996
Yearbook(Trademark), 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 1969-1995, represented by the
Salomon Brothers Long-term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers Index was backdated using Salomon Brothers
monthly yield data and a methodology similar to that used by Salomon Brothers
for 1969-1995; for the period 1927-1945, the Standard and Poor's monthly
High-Grade Corporate Composite yield data were used, assuming a 4 percent
coupon and a twenty year maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS--Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five year
maturity.
U. S. TREASURY BILLS--Measured by rolling over each month a one-bill
portfolio containing, at the beginning of each month, the bill having the
shortest maturity not less than one month.
INFLATION--Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
PART 7 - FINANCIAL STATEMENTS
The consolidated financial statements of The Equitable Life Assurance Society
of the United States included herein should be considered only as bearing
upon the ability of Equitable Life to meet its obligations under the
Certificates. [To be filed by amendment]
- -----------------------------------------------------------------------------
There are no financial statements for the Separate Account investing in Class
IB shares of HR Trust and EQ Trust as the Separate Account did not invest in
such shares prior to the date of the prospectus and SAI.
6
<PAGE>
INCOME MANAGER (SERVICE MARK)
ACCUMULATOR
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1997
- -----------------------------------------------------------------------------
COMBINATION VARIABLE AND
FIXED DEFERRED ANNUITY CERTIFICATES
FUNDED THROUGH THE
INVESTMENT FUNDS OF SEPARATE ACCOUNT NO. 45
ASSET ALLOCATION SERIES:
<TABLE>
<CAPTION>
HR TRUST EQ TRUST
- --------------------------- --------------------------------------------------------
<S> <C> <C>
ASSET ALLOCATION SERIES: O T. ROWE PRICE INT'L STOCK O MFS RESEARCH
O (ALLIANCE) CONSERVATIVE O T. ROWE PRICE EQUITY O MFS EMERGING GROWTH
INVESTORS INCOME COMPANIES
O (ALLIANCE) GROWTH O EQ/PUTNAM GROWTH O MORGAN STANLEY EMERGING
INVESTORS & INCOME VALUE MARKETS EQUITY
EQUITY SERIES: O EQ/PUTNAM INT'L EQUITY O WARBURG PINCUS SMALL
O (ALLIANCE) GROWTH & O EQ/PUTNAM INVESTORS COMPANY VALUE
INCOME GROWTH O MERRILL LYNCH GLOBAL
O (ALLIANCE) COMMON STOCK O EQ/PUTNAM BALANCED ALLOCATION
O (ALLIANCE) GLOBAL O MERRILL LYNCH BASIC VALUE
O (ALLIANCE) INTERNATIONAL
O (ALLIANCE) AGGRESSIVE
STOCK
O (ALLIANCE) SMALL CAP
GROWTH
O (ALLIANCE) EQUITY INDEX
FIXED INCOME SERIES:
O (ALLIANCE) MONEY MARKET
O (ALLIANCE) INTERMEDIATE
GOVERNMENT SECURITIES
</TABLE>
ISSUED BY:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Home Office: 1290 Avenue of the Americas, New York, NY 10104
Processing Office: Post Office Box 1547, Secaucus, NJ 07096-1547
This statement of additional information (SAI) is not a prospectus. It should
be read in conjunction with the Separate Account No. 45 prospectus for the
Accumulator, dated May 1, 1997. 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, by calling 1-800-789-7771, toll-free, or by contacting
your Registered Representative.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
- ----------------------------------------------------------------------------------------- --------
<S> <C>
Part 1 Accumulation Unit Values 2
- ----------------------------------------------------------------------------------------- --------
Part 2 Annuity Unit Values 2
- ----------------------------------------------------------------------------------------- --------
Part 3 Custodian and Independent Accountants 3
- ----------------------------------------------------------------------------------------- --------
Part 4 Money Market Fund and Intermediate Government Securities Fund Yield Information 3
- ----------------------------------------------------------------------------------------- --------
Part 5 Long-Term Market Trends 4
- ----------------------------------------------------------------------------------------- --------
Part 6 Financial Statements 6
- ----------------------------------------------------------------------------------------- --------
</TABLE>
Copyright 1997
The Equitable Life Assurance Society of the United States,
New York, New York 10104.
All rights reserved.
<PAGE>
PART 1 - ACCUMULATION UNIT VALUES
Accumulation Unit Values are determined at the end of each Valuation Period
for each of the Investment Funds. Other annuity contracts and certificates
which may be offered by us will have their own accumulation unit values for
the Investment Funds which may be different from those for the Accumulator.
The Accumulation Unit Value for an Investment Fund for any Valuation Period
is equal to the Accumulation Unit Value for the preceding Valuation Period
multiplied by the Net Investment Factor for that Investment Fund for that
Valuation Period. The NET INVESTMENT FACTOR is (a) - c where:
---
(b)
(a) is the value of the Investment Fund's shares of the corresponding
Portfolio at the end of the Valuation Period before giving effect to
any amounts allocated to or withdrawn from the Investment Fund for the
Valuation Period. For this purpose, we use the share value reported to
us by HR Trust or EQ Trust, as applicable.
(b) is the value of the Investment Fund's shares of the corresponding
Portfolio at the end of the preceding Valuation Period (after any
amounts allocated or withdrawn for that Valuation Period).
(c) is the daily Separate Account mortality and expense risks charge and
administration charge relating to the Certificates, times the number of
calendar days in the Valuation Period. These daily charges are at an
effective annual rate not to exceed a total of 1.15%.
PART 2 - ANNUITY UNIT VALUES
The annuity unit value for each Investment Fund was fixed at $1.00 on ,
1997 for Certificates with assumed base rates of net investment return of
both 5% and 3 1/2% a year. For each Valuation Period after that date, it is
the annuity unit value for the immediately preceding Valuation Period
multiplied by the adjusted Net Investment Factor under the Certificate. For
each Valuation Period, the adjusted Net Investment Factor is equal to the Net
Investment Factor reduced for each day in the Valuation Period by:
o .00013366 of the Net Investment Factor if the assumed base rate of net
investment return is 5% a year; or
o .00009425 of the Net Investment Factor if the assumed base rate of net
investment return is 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 deduction of
charges) is higher or lower than the assumed base rate.
All Certificates have a 5% assumed base rate of net investment return, except
in states where that rate is not permitted. Annuity payments under
Certificates with an assumed base rate of 3 1/2% will at first be smaller
than those under Certificates with a 5% assumed base rate. Payments under the
3 1/2% Certificates, however, will rise more rapidly when unit values are
rising, and payments will fall more slowly when unit values are falling than
those under 5% Certificates.
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 and are made on a monthly
basis. The first three payments are of equal amounts. Each of the first three
payments will be based on the amount specified in the Tables of Guaranteed
Annuity Payments in the Certificate.
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
involved a life contingency, the risk class and the age of the annuitants
will affect payments.
The amount of the fourth and each later payment will vary according to the
investment performance of the Investment Funds. Each monthly payment will be
calculated by multiplying the number of annuity units credited by the average
annuity unit value 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. Variable income annuities may also be available
by separate prospectus through the Investment Funds of other separate
accounts we offer.
Illustration of Changes in Annuity Unit Values.
To show how we determine variable annuity payments from month to month,
assume that
2
<PAGE>
the Annuity Account Value on an Annuity Commencement Date is enough to fund
an annuity with a monthly payment of $363 and that the annuity unit value for
the Valuation Period that includes the due date of the first annuity payment
is $1.05. The number of annuity units credited under the contract would be
345.71 (363 divided by 1.05 = 345.71).
If the fourth monthly payment is due in March, and the average annuity unit
value for January was $1.10, the annuity payment for March would be the
number of units (345.71) times the average annuity unit value ($1.10), or
$380.28. If the average annuity unit value was $1 in February, the annuity
payment for April would be 345.71 times $1, or $345.71.
PART 3 - CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable Life is the custodian for shares of the Trust owned by the Separate
Account.
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life at December 31, 1996 and 1995 and for each of the
three years ended December 31, 1996 included in the SAI have been audited by
Price Waterhouse LLP.
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life at December 31, 1996 and 1995 and for each of the
three years ended December 31, 1996 included in this SAI have been so
included in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of such firm as experts in accounting and
auditing.
PART 4 - MONEY MARKET FUND AND INTERMEDIATE
GOVERNMENT SECURITIES FUND YIELD INFORMATION
Money Market Fund
The Money Market Fund calculates yield information for seven-day periods. The
seven-day current yield calculation is based on a hypothetical Certificate
with one Accumulation Unit at the beginning of the period. To determine the
seven-day rate of return, the net change in the Accumulation Unit Value is
computed by subtracting the Accumulation Unit Value at the beginning of the
period from an Accumulation Unit Value, exclusive of capital changes, at the
end of the period.
Accumulation Unit Values reflect all other accrued expenses of the Money
Market Fund but do not reflect the withdrawal charge, the combined GMDB/GMIB
charge or any charges for applicable taxes such as state or local premium
taxes.
The adjusted net change is divided by the Accumulation Unit Value at the
beginning of the period to obtain the adjusted base period rate of return.
This seven-day adjusted base period return is then multiplied by 365/7 to
produce an annualized seven-day current yield figure carried to the nearest
one-hundredth of one percent.
The effective yield is obtained by modifying the current yield to give effect
to the compounding nature of the Money Market Fund's investments, as follows:
the unannualized adjusted base period return is compounded by adding one to
the adjusted base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result, i.e., effective yield =
(base period return + 1 ) 365/7 -1. The Money Market Fund yields will
fluctuate daily. Accordingly, yields for any given period are not necessarily
representative of future results. In addition, the value of Accumulation
Units of the Money Market Fund will fluctuate and not remain constant.
Intermediate Government Securities Fund
The Intermediate Government Securities Fund calculates yield information for
30-day periods. The 30-day current yield calculation is based on a
hypothetical Certificate with one Accumu lation Unit at the beginning of the
period. To determine the 30-day rate of return, the net change in the
Accumulation Unit Value is computed by subtracting the Accumulation Unit
Value at the beginning of the period from an Accumulation Unit Value,
exclusive of capital changes, at the end of the period.
Accumulation Unit Values reflect all other accrued expenses of the
Intermediate Government Securities Fund but do not reflect the withdrawal
charge, the GMDB/GMIB charge or any charges for applicable taxes such as
state or local premium taxes.
The adjusted net change is divided by the Accumulation Unit Value at the
beginning of the period to obtain the adjusted base period rate of return.
This 30-day adjusted base period return is then multiplied by 365/30 to
produce an annualized 30-day current yield figure carried to the nearest
one-hundredth of one percent.
3
<PAGE>
The effective yield is obtained by modifying the current yield to give effect
to the compounding nature of the Intermediate Government Securities Fund's
investments, as follows: the unannualized adjusted base period return is
compounded by adding one to the adjusted base period return, raising the sum
to a power equal to 365 divided by 30, and subtracting one from the result,
i.e., effective yield = (base period return + 1) 365/30 -1. Intermediate
Government Securities Fund yields will fluctuate daily. Accordingly, yields
for any given period are not necessarily representative of future results. In
addition, the value of the Accumulation Units of the Intermediate Government
Securities Fund will fluctuate and not remain constant.
Money Market Fund and Intermediate Government Securities Fund Yield
Information
Money Market Fund and the Intermediate Government Securities Fund yields
reflect charges that are not normally reflected in the yields of other
investments and therefore may be lower when compared with yields of other
investments. Money Market Fund and Intermediate Government Securities Fund
yields should not be compared to the return on fixed rate investments which
guarantee rates of interest for specified periods, such as the Guarantee
Periods. Nor should the yield be compared to the yield of money market funds
or government securities funds made available to the general public.
Because the Accumulator Certificates described in the prospectus are being
offered for the first time in 1997, no yield information is presented.
PART 5 -LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return
trends for various types of securities. The information presented, while not
directly related to the performance of the Investment Funds, helps to provide
a perspective on the potential returns of different asset classes over
different periods of time. By combining this information with knowledge of
personal financial needs (e.g., the length of time until you retire, your
financial requirements at retirement), you may be able to better determine
how you wish to allocate contributions among the Accumulator Investment
Funds.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long-or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus
is on long-term growth potential and protection against inflation, there may
be advantages to allocating some or all of their Annuity Account Value to
those Investment Funds that invest in stocks.
Growth of $1 Invested on January 1, 1955
(Values are as of the last business day)
[THE FOLLOWING TABLE WAS REPRESENTED AS A STACKED
AREA GRAPH IN THE PROSPECTUS]
- ------------------------------------------
S&P 500
TOTAL U.S.
RETURN INFLATION
- ------------------------------------------
INDEX VALUE
- ------------------------------------------
Dec 1955 1.32 1.00
Dec 1956 1.40 1.03
Dec 1957 1.25 1.06
Dec 1958 1.79 1.08
Dec 1959 2.01 1.10
Dec 1960 2.02 1.11
Dec 1961 2.56 1.12
Dec 1962 2.34 1.14
Dec 1963 2.87 1.15
Dec 1964 3.34 1.17
Dec 1965 3.76 1.19
Dec 1966 3.38 1.23
Dec 1967 4.19 1.27
Dec 1968 4.65 1.33
Dec 1969 4.26 1.41
Dec 1970 4.43 1.49
Dec 1971 5.06 1.54
Dec 1972 6.02 1.59
Dec 1973 5.14 1.73
Dec 1974 3.78 1.94
Dec 1975 5.18 2.08
Dec 1976 6.42 2.18
Dec 1977 5.96 2.32
Dec 1978 6.35 2.53
Dec 1979 7.52 2.87
Dec 1980 9.96 3.23
Dec 1981 9.47 3.51
Dec 1982 11.50 3.65
Dec 1983 14.09 3.79
Dec 1984 14.97 3.94
Dec 1985 19.78 4.09
Dec 1986 23.44 4.13
Dec 1987 24.66 4.32
Dec 1988 28.81 4.51
Dec 1989 37.88 4.72
Dec 1990 36.68 5.00
Dec 1991 47.89 5.16
Dec 1992 51.56 5.31
Dec 1993 56.71 5.45
Dec 1994 57.45 5.60
Dec 1995 78.95 5.75
- ------------------------------------------
[END OF GRAPHICALLY REPRESENTED DATA]
[BLACK] Common Stock [WHITE] Inflation
Source: Ibbotson Associates, Inc. See discussion and information preceding
and following chart.
Over shorter periods of time, however, common stocks tend to be subject to
more dramatic changes in value than fixed income (debt) securities. Investors
who are nearing retirement age, or who have a need to limit short-term risk,
may find it preferable to allocate a smaller percentage of their Annuity
Account Value to those Investment Funds that invest in common stocks. The
following graph illustrates the monthly fluctuations in value of $1 based on
monthly returns of the Standard & Poor's 500 during 1990, a year that
represents more typical volatility than 1995.
4
<PAGE>
Growth of $1 Invested on January 1, 1990
(Values are as of the last business day)
[THE FOLLOWING TABLE WAS REPRESENTED AS A SCATTER
GRAPH IN THE PROSPECTUS]
- ------------------------------------------
S&P 500
U.S. IT TOTAL
GVT TR RETURN
- ------------------------------------------
INDEX INDEX
- ------------------------------------------
Dec 1989 1.00 1.00
Jan 1990 0.99 0.93
Feb 1990 0.99 0.94
Mar 1990 0.99 0.97
Apr 1990 0.98 0.95
May 1990 1.01 1.04
Jun 1990 1.02 1.03
Jul 1990 1.04 1.03
Aug 1990 1.03 0.93
Sep 1990 1.04 0.89
Oct 1990 1.06 0.89
Nov 1990 1.08 0.94
Dec 1990 1.10 0.97
[END OF GRAPHICALLY REPRESENTED DATA]
Source: Ibbotson Associates, Inc. See discussion and information preceding
and following chart.
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1995 for different
types of securities: common stocks, long-term government bonds, long-term
corporate bonds, intermediate-term government bonds and U.S. Treasury Bills.
For comparison purposes, the Consumer Price Index is shown as a measure of
inflation. The average annual returns shown in the chart reflect capital
appreciation and assume the reinvestment of dividends and interest. No
investment management fees or expenses, and no charges typically associated
with deferred annuity products, are reflected.
The information presented is merely a summary of past experience for
unmanaged groups of securities and is neither an estimate or guarantee of
future performance. Any investment in securities, whether equity or debt,
involves varying degrees of potential risk, in addition to offering varying
degrees of potential reward.
The rates of return illustrated do not represent returns of the Separate
Account. In addition, there is no assurance that the performance of the
Investment Funds will correspond to rates of return such as those illustrated
in the chart.
For a comparative illustration of performance results of the Investment Funds
(which reflect the Trust and Separate Account charges), see "Part 2:
Investment Performance" in the prospectus.
5
<PAGE>
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
LONG-TERM INTERMEDIATE-
FOR THE FOLLOWING PERIODS COMMON LONG-TERM CORPORATE TERM U.S. TREASURY CONSUMER
ENDING 12/31/95 STOCKS GOVT. BONDS BONDS GOVT. BONDS BILLS PRICE INDEX
- ----------------------------- -------- ------------- ----------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 37.43% 31.67% 26.39% 16.80% 5.60% 2.74%
3 Years 15.26 12.82 10.47 7.22 4.13 2.72
5 Years 16.57 13.10 12.07 8.81 4.29 2.83
10 Years 14.84 11.92 11.25 9.08 5.55 3.48
20 Years 14.59 10.45 10.54 9.69 7.28 5.23
30 Years 10.68 7.92 8.17 8.36 6.72 5.39
40 Years 10.78 6.38 6.75 7.02 5.73 4.46
50 Years 11.94 5.35 5.75 5.87 4.80 4.36
60 Years 11.34 5.20 5.46 5.34 4.01 4.10
Since 12/31/26 10.54 5.17 5.69 5.25 3.72 3.12
Inflation adjusted since 1926 7.20 1.99 2.49 2.07 0.58 --
</TABLE>
SOURCE: Ibbotson, Roger G., and Rex A. Sinquefield, Stocks, Bonds, Bills, and
Inflation (SBBI), 1982, updated in Stocks, Bonds, Bills and Inflation 1996
Yearbook(Trademark), 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 1969-1995, represented by the
Salomon Brothers Long-term, High-Grade Corporate Bond Index for the period
1946-1968, the Salomon Brothers Index was backdated using Salomon Brothers
monthly yield data and a methodology similar to that used by Salomon Brothers
for 1969-1995; for the period 1927-1945, the Standard and Poor's monthly
High-Grade Corporate Composite yield data were used, assuming a 4 percent
coupon and a twenty year maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS--Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five year
maturity.
U. S. TREASURY BILLS--Measured by rolling over each month a one-bill
portfolio containing, at the beginning of each month, the bill having the
shortest maturity not less than one month.
INFLATION--Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
PART 6 - FINANCIAL STATEMENTS
The consolidated financial statements of The Equitable Life Assurance Society
of the United States included herein should be considered only as bearing
upon the ability of Equitable Life to meet its obligations under the
Certificates. [To be filed by amendment]
There are no financial statements for the Separate Account investing in Class
IB shares of HR Trust and EQ Trust as the Separate Account did not invest in
such shares prior to the date of the prospectus and SAI.
6
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B. (To be filed
by amendment).
(b) Exhibits.
The following exhibits are filed herewith:
1. Resolutions of the Board of Directors of The Equitable Life
Assurance Society of the United States ("Equitable") authorizing
the establishment of the Registrant, previously filed with this
Registration Statement No. 33-83750 on September 6, 1994.
2. Not applicable.
3. (a) Form of Distribution Agreement among Equitable
Distributors, Inc., Separate Account No. 45 and
Equitable Life Assurance Society of the United States,
previously filed with this Registration Statement No.
33-83750 on February 3, 1995.
(b) Form of Sales Agreement among Equitable Distributors,
Inc., as Distributor, a Broker- Dealer (to be named) and
a General Agent (to be named), previously filed with this
Registration Statement No. 33-83750 on February 3, 1995.
(c) Form of The Hudson River Trust Sales Agreement by
and among Equico Securities, Inc., The Equitable
Life Assurance Society of the United States,
Equitable Distributors, Inc. and Separate Account
No. 45 of The Equitable Life Assurance Society of
the United States, previously filed with this
Registration Statement No. 33-83750 on January 17,
1995.
4. (a) Form of group annuity contract no. 1050-94IC,
previously filed with this Registration Statement
No. 33-83750 on September 6, 1994.
(b) Forms of group annuity certificate nos. 94ICA and
94ICB, previously filed with this Registration
Statement No. 33-83750 on September 6, 1994.
(c) Forms of endorsement nos. 94ENIRAI, 94ENNQI and
94ENMVAI to contract no. 1050-94IC and data pages
nos. 94ICA/BIM and 94ICA/BMVA, previously filed with
this Registration Statement No. 33-83750 on
September 6, 1994.
C-1
<PAGE>
(d) Forms of data pages no. 94ICA/BIM (IRA) and (NQ),
previously filed with this Registration Statement
No. 33-83750 on February 3, 1995.
(e) Form of endorsement no. 95ENLCAI to contract no. 1050-94IC
and data pages no. 94ICA/BLCA, previously filed with this
Registration Statement No. 33-83750 on April 10, 1995.
(f) Forms of data pages for Rollover IRA, IRA Assured Payment
Option, IRA Assured Payment Option Plus, Accumulator,
Assured Growth Plan, Assured Growth Plan (Flexible Income
Program), Assured Payment Plan (Period Certain) and Assured
Payment Plan (Life with a Period Certain), previously filed
with this Registration Statement No. 33-83750 on August 31,
1995.
(g) Forms of data pages for Rollover IRA, IRA Assured Payment
Option Plus and Accumulator, previously filed with this
Registration Statement No. 33-83750 on April 23, 1996.
(h) Form of Guaranteed Minimum Income Benefit Endorsement to
Contract Form No. 10-50-94IC and the Certificates under the
Contract, previously filed with this Registration Statement
No. 33-83750 on April 23, 1996.
(i) Form of data pages for Accumulator and Rollover IRA,
previously filed with this Registration Statement No.
33-83750 on, October 15, 1996.
(j) Form of data pages for Accumulator and Rollover IRA, to be
filed by amendment.
5. (a) Forms of application used with the IRA, NQ and Fixed
Annuity Markets, previously filed with this Registration
Statement No. 33-83750 on February 3, 1995.
(b) Forms of Enrollment Form/Application for Rollover IRA,
Choice Income Plan and Accumulator, previously filed with
this Registration Statement No. 33-83750 on April 23, 1996.
6. (a) Restated Charter of Equitable, as amended January 1,
1997.
(b) By-Laws of Equitable, as amended November 21, 1996.
7. Not applicable.
8. Not applicable.
9. Opinion and Consent of Jonathan E. Gaines, Esq., Vice President
and Associate General Counsel of Equitable, as
C-2
<PAGE>
to the legality of the securities being registered, previously
filed with this Registration Statement No. 33-83750 on January
17, 1995.
10. (a) Consent of Price Waterhouse LLP, to be filed by
amendment.
(b) Powers of Attorney.
11. Not applicable.
12. Not applicable.
13. (a) Formulae for Determining Money Market Fund Yield for
a Seven-Day Period for the INCOME MANAGER,
previously filed with this Registration Statement
No. 33-83750 on February 3, 1995.
(b) Formulae for Determining Cumulative and Annualized
Rates of Return for the INCOME MANAGER, previously
filed with this Registration Statement No. 33-83750
on February 3, 1995.
(c) Formulae for Determining Standardized Performance
Value and Annualized Average Performance Ratio for
INCOME MANAGER Certificates, previously filed with
this Registration Statement No. 33-83750 on February
3, 1995.
27. Financial Data Schedule. (To be filed by Amendment).
C-3
<PAGE>
Item 25: Directors and Officers of Equitable.
Set forth below is information regarding the directors and principal
officers of Equitable. Equitable's address is 787 Seventh Avenue,
New York, New York 10019. The business address of the persons whose
names are preceded by an asterisk is that of Equitable.
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
DIRECTORS
Claude Bebear Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Christopher J. Brocksom Director
AXA Equity & Law
Amersham Road
High Wycombe
Bucks HP 13 5 AL
England
Francoise Colloc'h Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Henri de Castries Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Joseph L. Dionne Director
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
William T. Esrey Director
Sprint Corporation
P.O. Box 11315
Kansas City, MO 64112
Jean-Rene Fourtou Director
Rhone-Poulenc S.A.
25 Quai Paul Doumer
92408 Courbevoie Cedex,
France
Norman C. Francis Director
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
C-4
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
Donald J. Greene Director
LeBouef, Lamb, Greene & MacRae
125 West 55th Street
New York, NY 10019-4513
John T. Hartley Director
Harris Corporation
1025 NASA Boulevard
Melbourne, FL 32919
John H.F. Haskell, Jr. Director
Dillon, Read & Co., Inc.
535 Madison Avenue
New York, NY 10028
Mary R. Henderson Director
CPC International, Inc.
International Plaza
P.O. Box 8000
Englewood Cliffs, NJ 07632-9976
W. Edwin Jarmain Director
Jarmain Group Inc.
121 King Street West
Suite 2525
Toronto, Ontario M5H 3T9,
Canada
G. Donald Johnston, Jr. Director
184-400 Ocean Road
John's Island
Vero Beach, FL 32963
Winthrop Knowlton Director
Knowlton Brothers, Inc.
530 Fifth Avenue
New York, NY 10036
Arthur L. Liman Director
Paul, Weiss, Rifkind, Wharton &
Garrison
1285 Avenue of the Americas
New York, NY 10019
George T. Lowy Director
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
C-5
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
Didier Pineau-Valencienne Director
Schneider S.A.
64-70 Avenue Jean-Baptiste Clement
92646 Boulogne-Billancourt Cedex
France
George J. Sella, Jr. Director
P.O. Box 397
Newton, NJ 07860
Dave H. Williams Director
Alliance Capital Management Corporation
1345 Avenue of the Americas
New York, NY 10105
OFFICER-DIRECTORS
*James M. Benson President, Chief Executive Officer
and Director
*William T. McCaffrey Senior Executive Vice President,
Chief Operating Officer and Director
*Joseph J. Melone Chairman of the Board and Director
OTHER OFFICERS
A. Frank Beaz Senior Vice President
1290 Avenue of the Americas
New York, NY 10104
Leon Billis Senior Vice President
1290 Avenue of the Americas
New York, NY 10104
Harvey Blitz Senior Vice President and Deputy
1290 Avenue of the Americas Chief Financial Officer
New York, NY 10104
Kevin R. Byrne Vice President and Treasurer
1290 Avenue of the Americas
New York, NY 10104
*Jerry M. de St. Paer Executive Vice President
Gordon G. Dinsmore Senior Vice President
1290 Avenue of the Americas
New York, NY 10104
Alvin H. Fenichel Senior Vice President and
1290 Avenue of the Americas Controller
New York, NY 10104
C-6
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
Paul J. Flora Senior Vice President and Auditor
1290 Avenue of the Americas
New York, NY 10104
*Robert E. Garber Executive Vice President and General
Counsel
Donald R. Kaplan Vice President and Chief Compliance
1290 Avenue of the Americas Officer and Associate General Counsel
New York, NY 10104
*Michael S. Martin Senior Vice President
Peter D. Noris Executive Vice President and Chief
1290 Avenue of the Americas Investment Officer
New York, NY 10104
Anthony C. Pasquale Senior Vice President
1290 Avenue of the Americas
New York, NY 10104
Pauline Sherman Vice President, Secretary and
1290 Avenue of the Americas Associate General Counsel
New York, NY 10104
Samuel B. Shlesinger Senior Vice President
1290 Avenue of the Americas
New York, NY 10104
Richard V. Silver Senior Vice President and Deputy
1290 Avenue of the Americas General Counsel
New York, NY 10104
*Jose Suquet Executive Vice President and Chief
Agency Officer
*Stanley B. Tulin Senior Executive Vice President
and Chief Financial Officer
C-7
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the
Insurance Company or Registrant
Separate Account No. 45 of The Equitable Life Assurance Society of
the United States (the "Separate Account") is a separate account of Equitable.
Equitable, a New York stock life insurance company, is a wholly owned
subsidiary of The Equitable Companies Incorporated (the "Holding Company"), a
publicly traded company.
The largest stockholder of the Holding Company is AXA-UAP which
beneficially owns approximately 63.9% of the Holding Company's outstanding
common stock plus convertible preferred stock. AXA-UAP is able to exercise
significant influence over the operations and capital structure of the
Holding Company and its subsidiaries, including Equitable. AXA-UAP, a French
company, is the holding company for an international group of insurance and
related financial services companies.
C-8
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (l991) (Delaware)
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (44.1%) (See
Addendum B(1) for subsidiaries)
The Equitable Life Assurance Society of the United States (1859)
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
EVLICO, INC. (1995) (Delaware)
EVLICO East Ridge, Inc. (1995) (California)
GP/EQ Southwest, Inc. (1995) (Texas) (5.885%)
Franconom, Inc. (1985) (Pennsylvania)
Frontier Trust Company (1987) (North Dakota)
Gateway Center Buildings, Garage, and Apartment Hotel, Inc.
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
Equitable Managed Assets (Delaware)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
Alliance Capital Management L.P. (2.71% limited partnership
interest)
ACMC, Inc. (1991) (Delaware)(s)
Alliance Capital Management L.P. (1988) (Delaware)
(49.09% limited partnership interest)
EVCO, Inc. (1991) (New Jersey)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
Equitable Underwriting and Sales Agency (Bahamas) Limited (1993)
(Bahamas)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-9
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Fox Run Inc. (1994) (Massachusetts)
STCS, Inc. (1992) (Delaware)
CCMI Corporation (1994) (Maryland)
FTM Corporation (1994) (Maryland)
HVM Corporation (1994) (Maryland)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
GP/EQ Southwest, Inc. (1995) (Texas) (94.132%)
Camelback JVS, Inc. (1995) (Arizona)
ELAS Realty, Inc. (1996) (Delaware)
Equitable Realty Assets Corporation (1983) (Delaware)
100 Federal Street Realty Corporation (Massachusetts)
Equitable Holding Corporation (1985) (Delaware)
EQ Financial Consultants, Inc. (formerly Equico Securities, Inc.)
(l97l) (Delaware) (a) (b)
ELAS Securities Acquisition Corp. (l980) (Delaware)
100 Federal Street Funding Corporation (Massachusetts)
EquiSource of New York, Inc. (1986) (New York) (See
Addendum A for subsidiaries)
Equitable Casualty Insurance Company (l986) (Vermont)
EREIM LP Corp. (1986) (Delaware)
EREIM LP Associates (1%)
EML Associates (.02%)
Six-Pac G.P., Inc. (1990) (Georgia)
Equitable Distributors, Inc. (1988) (Delaware) (a)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-10
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EQ and
EHC) (Delaware) (36.1%) (See Addendum B(1) for
subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
Equitable Structured Settlement Corporation (1996) (Delaware)
Equitable Investment Corporation (l97l) (New York)
Stelas North Carolina Limited Partnership (50% limited partnership
interest) (l984)
Equitable JV Holding Corporation (1989) (Delaware)
Alliance Capital Management Corporation (l991) (Delaware) (b) (See
Addendum B(2) for subsidiaries)
Equitable Capital Management Corporation (l985) (Delaware) (b)
Alliance Capital Management L.P. (1988) (Delaware)
(14.67% limited partnership interest)
EQ Services, Inc. (1992) (Delaware)
Equitable Agri-Business, Inc. (1984) Delaware
Equitable Real Estate Investment Management, Inc. (l984)
(Delaware) (b) (See Addendum B(3) for subsidiaries)
(b) Registered Investment Advisor
C-11
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM A - SUBSIDIARY
OF EQUITABLE HOLDING CORPORATION
HAVING MORE THAN FIVE SUBSIDIARIES
----------------------------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet Business Corporation
of New York) has the following subsidiaries that are brokerage companies to
make available to Equitable Agents within each state traditional (non-equity)
products and services not manufactured by Equitable:
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988) (Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-12
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM B - INVESTMENT SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
approximately 150 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Securities Corporation (1985)
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corp. (1985)
(Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
DLJ Real Estate, Inc.
DLJ Capital Corporation (b)
DLJ Mortgage Capital, Inc. (1988) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Alliance Capital Management Corporation (as general partner) (b)has the
following subsidiaries:
Alliance Capital Management L.P. (1988) (Delaware) (b)
Alliance Capital Management Corporation of Delaware, Inc.
(Delaware)
Alliance Fund Services, Inc. (Delaware) (a)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Capital Oceanic Corp. (Delaware)
Alliance Capital Management Australia Pty. Ltd.
(Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (99.98%)
Alliance Eastern Europe Inc. (Delaware)
Alliance Barra Research Institute, Inc. (Delaware) (50%)
Alliance Capital Management Canada, Inc. (Canada)
(99.99%)
Alliance Capital Management (Brazil) Llda
Alliance Capital Global Derivatives Corp. (Delaware)
Alliance International Fund Services S.A.
(Luxembourg)
Alliance Capital Management (India) Ltd. (Delaware)
Alliance Capital Mauritius Ltd.
Alliance Corporate Finance Group, Incorporated
(Delaware)
Equitable Capital Diversified Holdings, L.P. I
Equitable Capital Diversified Holdings, L.P. II
Curisitor Alliance L.L.C. (Delaware)
Curisitor Holdings Limited (UK)
Alliance Capital Management (Japan), Inc.
Alliance Capital Management (Asia) Ltd.
Alliance Capital Management (Turkey), Ltd.
Cursitor Alliance Management Limited (UK)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-13
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM B - (CONT.)
INVESTMENT SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
Equitable Real Estate Investment Management, Inc. (b) has the following
subsidiaries:
Equitable Realty Portfolio Management, Inc. (1984) (Delaware)
EQK Partners (100% general partnership interest)
Compass Management and Leasing Co. (formerly EREIM, Inc.) (1984)
(Colorado)
Equitable Real Estate Capital Markets, Inc. (1987) (Delaware)
(a)
EPPNLP Corp. (1987) (Delaware)
Equitable Pacific Partners Corp. (1987) (Delaware)
Equitable Pacific Partners Limited Partnership
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P.
EML Associates, L.P. (80%)
Compass Retail, Inc. (1990) (Delaware)
Compass Management and Leasing, Inc. (1991) (Delaware)
CJVS, Inc. (1994) (California)
Compass Cayman (1996) (Cayman Islands)
Compass Management and Leasing (UK) Limited
Column Financial, Inc. (1993) (Delaware) (50%)
Buckhead Strategic Corp. (1994) (Delaware)
Buckhead Strategic Fund, L.P.
BH Strategic Co. I, L.P.
BH Strategic Co. II, L.P.
BH Strategic Co. III, L.P.
BH Strategic Co. IV, L.P.
Community Funding, Inc. (1994) (Delaware)
Community Mortgage Fund, L.P. (1994) (Delaware)
Buckhead Strategic Corp., II (1995) (Delaware)
Buckhead Strategic Fund L.P. II
Buckhead Co. I, L.P.
Buckhead Co. II, L.P.
Buckhead Co. III, L.P.
HYDOC, L.L.C.
Headwind Holding Corp.
Buckhead Co. IV, L.P.
Tricon Corp.
Tricon, L.P.
Equitable Real Estate Hyperion Capital Advisors LLC (1995)
(Delaware)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-14
<PAGE>
AXA GROUP CHART
The information listed below is dated as of January 1, 1996; percentages shown
represent voting power. The name of the owner is noted when AXA indirectly
controls the company.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Assurances Iard France 96.9%
Axa Assurances Vie France 100% by Axa and Uni Europe
Vie
Uni Europe Assurance France 100% by Axa and Axa
Assurances Iard
Uni Europe Vie France 99.3% by Axa and Axa
Assurances Iard
Alpha Assurances Vie France 100%
Axa Direct France 100%
Direct Assurances Iard France 100% by Axa Direct
Direct Assurance Vie France 100% by Axa Direct
Axa Direkt Versicherung A.G. Germany 100% owned by Axa Direct
Axiva France 90.3%
Defense Civile France 95%
Societe Francaise d'Assistance France 51.2% by Axa Assurances Iard
Monvoisin Assurances France 99.92% by different companies
and Mutuals
Societe Beaujon France 100%
Lor Finance France 99.9%
Jour Finance France 100% by different companies
Compagnie Auxiliaire pour le France 100% by Societe Beaujon
Commerce et l'Industrie
C.F.G.A. France 99.96% owned by the mutuals
and Finaxa
Saint Bernard Diffusion France 89.9%
Sogarep France 95%, (100% with the mutuals)
Argovie France 100% by Axiva and SCA Argos
Finargos France 66.4% owned by Axiva
Astral France 100% by Uni Europe Assurance
Argos France N.S.
Finaxa Belgium Belgium 100%
C-15
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Belgium Belgium 18.5% by Axa(SA) and 72.5%
by Finaxa Belgium
De Kortrijske Verzekering Belgium 99.8%
Juris Belgium 100%
Finaxa Luxembourg Luxembourg 100%
Axa Assurance IARD Luxembourg Luxembourg 99.4%
Axa Assurance Vie Luxembourg Luxembourg 99.4%
Axa Aurora Spain 50%
Aurora Polar SA de Seguros y Spain 99.8% owned by Axa Aurora
Reaseguros
Axa Vida SA de Seguros y Spain 99.8% owned by Axa Aurora
Reaseguros
Axa Gestion de Seguros y Spain 100% owned by Axa Aurora
Reaseguros
Axa Assicurazioni Italy 100%
Eurovita Italy 30% owned by Axa
Assicurazioni
Axa Equity & Law plc U.K. 99.9%
Axa Equity & Law Life U.K. 100% by Axa Equity & Law plc
Assurance Society
Axa Equity & Law International U.K. 100% owned by Axa Equity &
Law plc
Axa Equity & Law Netherlands 100% by Axa Equity & Law plc
Levensverzekeringen
Axa Insurance U.K. 100%
Axa Global Risks U.K. 100% by Axa and Uni Europe
Assurance
Axa U.K. U.K. 100%
Axa Canada Canada 100%
Boreal Insurance Canada 100% owned by AXA Canada
Axa Assurances Inc. Canada 100% owned by Axa Canada
Axa Insurance Inc. Canada 100% owned by Axa Canada
Anglo Canada General Canada 100% owned by Axa Canada
Insurance Cy
Axa Pacific Insurance Canada 100% by Boreal Insurance
Boreal Assurances Agricoles Canada 100% by Boreal Insurance
C-16
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Sime Axa Berhad Malaysia 30%
Axa Sime Investment Holdings Singapore 50%
Pte Ltd
Axa Sime Assurance Hong Kong 100% owned by Axa Sime Invt.
Holdings Pte Ltd
Axa Sime Assurance Singapore 100% owned by Axa Sime Invt
Holdings Pte Ltd
Axa Life Insurance Hong Kong 100%
PT Asuransi Axa Indonesia Indonesia 80%
Equitable Cies Incorp. U.S.A. 60.6% owned by Axa, 44.4%
Financiere 45, 3.8%,
Lorfinance 7.6% and Axa
Equity & Law Life
Association Society 4.8%
Equitable Life Assurance of U.S.A. 100% owned by Equitable Cies
the USA Inc.
National Mutual Holdings Ltd Australia 51%
The National Mutual Life Australia 100% owned by National
Association of Australasia Ltd Mutual Holdings Ltd
National Mutual International 74% owned by National Mutual
Pty Ltd Holdings Ltd and 26% by The
National Mutual Life
Association of Australasia
National Mutual (Bermuda) Ltd Australia 100% owned by National
Mutual International Pty Ltd
National Mutual Asia Ltd Bermudas 54% owned by National Mutual
(Bermuda) Ltd and 20% by
Delta Ltd
National Mutual Funds Australia 100% owned by National Mutual
Management (Global) Ltd Holdings Ltd
National Mutual Funds USA 100% owned by National Mutual
Management North America Funds Management (Global) Ltd
Holdings Inc.
Australian Casualty & Life Ltd Australia 100% owned by National Mutual
Holdings Ltd
National Mutual Health Australia 100% owned by National Mutual
Insurance Pty Ltd Holdings Ltd
Axa Reassurance France 100%
Axa Re Finance France 100% owned by Axa Reassurance
Axa Re Vie France 100% owned by Axa Reassurance
Axa Cessions France 100%
C-17
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Abeille Reassurances France 100% owned by Axa
Reassurance
Axa Re Mexico Mexico 100% owned by Axa
Reassurance
Axa Re Asia Singapore 100% owned by Axa
Reassurance
Axa Re U.K. Plc U.K. 100% owned by Axa Re U.K.
Holding
Axa Re U.K. Holding U.K. 100% owned by Axa
Reassurance
Axa Re U.S.A. U.S.A. 100% owned by Axa America
Axa America U.S.A. 100% owned by Axa
Reassurance
International Technology U.S.A. 80% owned by Axa America
Underwriters Inc. (INTEC)
Axa Re Life U.S.A. 100% owned by Axa Re Vie
C.G.R.M. Monaco 100% by Axa Reassurance
Axa Life Insurance Japan 100% owned by Axa
Dongbu Axa Life Insurance Co Korea 50%
Ltd
Axa Oyak Hayat Sigota Turkey 60%
Oyak Hayat Sigorta Turkey 11%
C-18
<PAGE>
AXA FINANCIAL BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Compagnie Financiere de Paris France 96.9%, (100% with the
(C.F.P.) Mutuals)
Axa Banque France 98.7% owned by C.F.P.
Financiere 78 France 100% owned by C.F.P.
Axa Credit France 65% owned by C.F.P.
Axa Gestion Interessement France 100% owned by C.F.P.
Compagnie Europeenne de France 100% owned by C.F.P.
Credit (C.E.C.)
Fidei France 20.7% owned by C.F.P. and
10.8% by Axamur
Meeschaert Rousselle France 100% owned by Financiere 78
M R Futures SNC France 59% by Meeschaert Rousselle
Opale Derivee Bourse France 89.4% by M.R. Futures and
Meeschaert Rousselle
Anjou Courtage France 70% owned by Meeschaert
Rousselle
Axiva Gestion France 100% owned by Axiva
Juri Creances France 100% by different companies
Societe de Placements France 99.3% with the Mutuals
Selectionnes S.P.S.
Presence et Initiative France 73% with the Mutuals
Vamopar France 100% owned by Societe
Beaujon
Financiere Mermoz France 100%
Axa Asset Management Europe France 100%
Axa Asset Management France 100% owned by Axa Asset
Partenaires Management Europe
Axa Asset Management Conseils France 100% owned by Axa Asset
Management Europe
Axa Asset Management France 100% owned by Axa Asset
Distribution Management Europe
Axa Equity & Law Home Loans U.K. 100% owned by Axa Equity
& Law
Axa Equity & Law Commercial U.K. 100% owned by Axa Equity
Loans & Law
C-19
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Alliance Capital Management U.S.A. 59% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 36.1% owned by ELAS and
44.1% by Equitable Cies Inc.
Cogefin Luxembourg 100% owned by Axa Belgium
Soflinter Belgium 100% owned by Axa Belgium
Financiere 45 France 99.6%
Mofipar France 99.76% owned by Societe
Beaujon
ORIA France 100% owned by Axa Millesimes
Axa Oeuvres d'Art France 100% by the Mutuals
Axa Cantenac Brown France 100%
Colisee Acti Finance 1 France 100% owned by Societe
Beaujon
Colisee Acti Finance 2 France 100% owned by Axa Assurances
Iard Mutuelle
Participations 2001 France 100% owned by Societe
Beaujon
Finalor France 100% owned by Societe
Beaujon
C-20
<PAGE>
AXA REAL ESTATE BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
C.I.P.M. France 97.6% with the Mutuals
Fincosa France 100% owned by C.I.P.M.
Prebail France 100% owned by Societe
Beaujon and C.F.P.
Axamur France 100% by different companies
and mutuals
Parigest France 100% by the Mutuals, C.I.P.M.
and Fincosa
Parimmo France 100% by the insurance
companies and the mutuals
S.G.C.I. France 100% with the Mutuals
Transaxim France 99.4% owned by S.G.C.I.
Compagnie Parisienne de France 100% owned by S.G.C.I.
Participations
Monte Scopeto France 100% owned by C.P.P.
Matipierre France 100% by different companies
Securimmo France 87% by different companies
and mutuals
Paris Orleans France 99.9% by different companies
Colisee Bureaux France 99.4% by different companies
Colisee Premiere France 99.9% by different companies
Colisee Laffitte France 99.8% by Colisee Bureaux
Carnot Laforge France 100% by Colisee Premiere
Parc Camoin France 100% by Colisee Premiere
Delta Point du Jour France 100% owned by Matipierre
Paroi Nord de l'Arche France 100% owned by Matipierre
Falival France 100% owned by Axa Reassurance
Compagnie du Gaz d'Avignon France 99% owned by Axa Assurances
Iard
Ahorro Familiar France 40.1% owned by Axa Assurances
Iard
Fonciere du Val d'Oise France 100% owned by C.P.P.
Sodarec France 99.9% owned by C.P.P.
Centrexpo France 99.9% owned by C.P.P.
C-21
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Fonciere de la Vile du Bois France 99.6% owned by Centrexpo
Colisee Seine France 97.4% by different companies
Translot France 99.9% by SGCI
S.N.C. Dumont d'Urville France 100% owned by Colisee
Premiere
Colisee Participations France 100% by SGCI
Colisee Federation France 100% by SGCI
Colisee Saint Georges France 100% by SGCI
Drouot Industrie France 50% by SGCI
Colisee Vauban France 99.7% by Matipierre
Fonciere Colisee France 98.9% by Matipierre
Axa Pierre S.C.I. France 97.6% owned by different
companies and Mutuals
Axa Millesimes France 77.8% owned by AXA and the
Mutuals
Chateau Suduirault France 100% owned by Axa Millesimes
Diznoko Hongrie 100% owned by Axa Millesimes
Compagnie Fonciere Matignon France 100% by different companies
and Mutuals
Equitable Real Estate U.S.A. 100% owned by ELAS
Investment
Quinta do Noval Vinhos S.A. Portugal 99.9% owned by Axa Millesimes
C-22
<PAGE>
OTHER AXA BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
A.N.F. France 95.4% owned by Finaxa
SCOR France 10.1% owned by Axa
Reassurance
Campagnie du Cambodge France 23% owned by A.N.F.
Lucia France 20.6% owned by Axa Assurance
Iard and 8.6% by the mutuals
Rubis et Cie France 12.7% owned by Uni Europe
Assurance
Schneider S.A. France 10%
Eurofin France 31.6% owned by Compangie
Financiere de Paris
C-23
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
1. The year of formation or acquisition and state or country of
incorporation of each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real estate
subsidiaries, partnerships, and joint ventures formed to operate or
develop a single real estate property or a group of related properties,
and certain inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock
ownership except: (a) The Equitable Companies Incorporated's 44.1%
interest in Donaldson, Lufkin & Jenrette, Inc. and Equitable
Holding Corporation's 36.1% interest in same; (b) as noted for
certain partnership interests; (c) Equitable Life's ACMC, Inc.'s
and Equitable Capital Management Corporation's limited partnership
interests in Alliance Capital Management L.P.; (d) as noted for
certain subsidiaries of Alliance Capital Management Corp. of
Delaware, Inc.; (e) Treasurer Robert L. Bennett's 20% interest in
Compass Management and Leasing Co. (formerly EREIM, Inc.); and (f)
DLJ Mortgage Capital's and Equitable Real Estate's respective
ownerships, 50% each in Column Financial, Inc.
4. The operational status of the entities shown as having been formed or
authorized but "not yet fully operational" should be checked with the
appropriate operating areas, especially for those that are start-up
situations.
5. The following entities are not included in this chart because, while they
have an affiliation with The Equitable, their relationship is not the
ongoing equity-based form of control and ownership that is characteristic
of the affiliations on the chart, and, in the case of the first two
entities, they are under the direction of at least a majority of "outside"
trustees:
The Equitable Funds
The Hudson River Trust
Separate Accounts
6. This chart was last revised on January 1, 1997.
C-24
<PAGE>
Item 27. Number of Contractowners
As of January 31, 1997, there were 3,439 owners of qualified and
non-qualified contracts offered by the registrant hereunder.
Item 28. Indemnification
Indemnification of Principal Underwriter
To the extent permitted by law of the State of New York and subject
to all applicable requirements thereof, Equitable Distributors, Inc. has
undertaken to indemnify each of its directors and officers who is made or
threatened to be made a party to any action or proceeding, whether civil or
criminal, by reason of the fact the director or officer, or his or her testator
or intestate, is or was a director or officer of Equitable Distributors Inc.
Undertaking
Insofar as indemnification for liability arising under the
Securities Act of 1933 ("Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Item 29. Principal Underwriters
(a) Equitable Distributors, Inc., an indirect wholly-owned
subsidiary of Equitable, is the principal underwriter for Separate Account
No. 45. The principal business address of Equitable Distributors, Inc. is
787 Seventh Avenue, NY, NY 10019.
(b) Set forth below is certain information regarding the directors
and principal officers of Equitable Distributors, Inc. The business address of
the persons whose names are preceded by an asterisk is that of Equitable
Distributors, Inc.
C-25
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
- ---------------- ----------------
*Jerome Golden Chairman of the Board and Director
James A. Shepherdson, III Co-Chief Executive Officer,
660 Newport Center Drive Co-President, Managing Director,
Suite 1200 and Director
Newport Beach, CA 92660
Greg Brakovich Co-Chief Executive Officer,
660 Newport Center Drive Co-President, Managing Director,
Suite 1200 and Director
Newport Beach, CA 92660
Phillip Meserve Managing Director
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Dennis Witte Senior Vice President
135 W 50th Street
New York, NY 10019
*James M. Benson Director
*William T. McCaffrey Director
Thomas D. Bullen Chief Financial Officer
200 Plaza Drive
Secaucus, NJ 07096-1583
Michael Brzozowski Chief Compliance Officer
1290 Avenue of the Americas,
New York, NY 10104
Ronald R. Quist Treasurer
135 W 50th Street
New York, NY 10019
Janet Hannon Secretary
1290 Avenue of the Americas
New York, NY 10104
Linda Galasso Assistant Secretary
1290 Avenue of the Americas
New York, NY 10104
(c) The information under "Distribution of the Certificates" in
the Prospectus forming a part of this Registrant Statement is incorporated
herein by reference.
C-26
<PAGE>
Item 30. Location of Accounts and Records
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 thereunder are
maintained by Equitable at 787 Seventh Avenue, New York, New York 10019. The
policies files will be kept at Vantage Computer System, Inc., 301 W. 11th
Street, Kansas City, Mo. 64105.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant hereby undertakes:
(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are
never more than 16 months old for so long as payments under
the variable annuity contracts may be accepted;
(b) to include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant
can check to request a Statement of Additional Information, or
(2) a postcard or similar written communication affixed to or
included in the prospectus that the applicant can remove to
send for a Statement of Additional Information;
(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this
Form promptly upon written or oral request.
(d) Equitable represents that the fees and charges deducted
under the Certificates described in this Registration
Statement, in the aggregate, are reasonable in relation
to the services rendered, the expenses to be incurred,
and the risks assumed by Equitable under the
Certificates. Equitable bases its representation on
its assessment of all of the facts and circumstances,
including such relevant factors as: the nature and
extent of such services, expenses and risks, the need
for Equitable to earn a profit, the degree to which the
Certificates include innovative features, and
regulatory standards for the grant of exemptive relief
under the Investment Company Act of 1940 used prior to
October 1996, including the range of industry practice.
C-27
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant has duly caused this amendment to the registration
statement to be signed on its behalf, in the City and State of New York, on
this 6th day of March, 1997.
SEPARATE ACCOUNT No. 45 OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
(Registrant)
By: The Equitable Life Assurance
Society of the United States
By: /s/ Jerome S. Golden
-----------------------------------
Jerome S. Golden
President,
Income Management Group,
A Division of The Equitable Life
Assurance Society of the United
States
C-28
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Depositor has duly caused this amendment to the registration
statement to be signed on its behalf, in the City and State of New York, on
this 6th day of March, 1997.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
(Depositor)
By: /s/ Jerome S. Golden
--------------------------------
Jerome S. Golden
President,
Income Management Group,
A Division of The Equitable Life
Assurance Society of the United
States
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, this amendment to the registration statement has been signed by the
following persons in the capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
James M. Benson President, Chief Executive Officer
and Director
William T. McCaffrey Senior Executive Vice President,
Chief Operating Officer and Director
Joseph J. Melone Chairman of the Board and Director
PRINCIPAL FINANCIAL OFFICER:
Stanley B. Tulin Senior Executive Vice President and
Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel Senior Vice President and Controller
- -----------------------
Alvin H. Fenichel
March 6, 1997
DIRECTORS:
Claude Bebear Jean-Rene Foutou Winthrop Knowlton
James M. Benson Norman C. Francis Arthur L. Liman
Christopher Brocksom Donald J. Greene George T. Lowy
Francoise Colloc'h John T. Hartley William T. McCaffrey
Henri de Castries John H.F. Haskell, Jr. Joseph J. Melone
Joseph L. Dionne W. Edwin Jarmain George J. Sella, Jr.
William T. Esrey G. Donald Johnston, Jr. Dave H. Williams
By: /s/ Jerome S. Golden
--------------------------
Jerome S. Golden
Attorney-in-Fact
March 6, 1997
C-29
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. PAGE NO.
- ----------- --------
6(a) Restated Charter of Equitable, as amended January 1, 1997.
6(b) By-Laws of Equitable, as amended November 21, 1996
10(b) Powers of Attorney
C-30
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
RESTATED CHARTER
----------------
As Amended January 1, 1997
<PAGE>
RESTATED CHARTER
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
ARTICLE I
The name of the corporation shall continue to be The Equitable Life
Assurance Society of the United States.
ARTICLE II
The principal office of the corporation shall be located in the City of
New York, County of New York, State of New York.
ARTICLE III
(a) The business to be transacted by the corporation shall be the kinds
of insurance business specified in Paragraphs 1, 2 and 3 of Subsection (a) of
Section 1113 of the Insurance Law of the State of New York, as follows:
(1) "Life insurance": every insurance upon the lives of human
beings, and every insurance appertaining thereto, including the
granting of endowment benefits, additional benefits in the event of
death by accident, additional benefits to safeguard the contract from
lapse, accelerated payments of part or all of the death benefit or a
special surrender value upon diagnosis (A) of terminal illness defined
as a life expectancy of twelve months or less, or (B) of a medical
condition requiring extraordinary medical care or treatment regardless
of life expectancy, or provide a special surrender value, upon total
and permanent disability of the insured, and optional modes of
settlement of proceeds. "Life insurance" also includes additional
benefits to safeguard the contract against lapse in the event of
unemployment of the insured. Amounts paid the insurer for life
insurance and proceeds applied under optional modes of settlement or
under dividend options may be allocated by the insurer
<PAGE>
to one or more separate accounts pursuant to section four thousand two
hundred forty of the Insurance Law of the State of New York;
(2) "Annuities": all agreements to make periodical payments for a
period certain or where the making or continuance of all or some of a
series of such payments, or the amount of any such payment, depends
upon the continuance of human life, except payments made under the
authority of paragraph (1) above. Amounts paid the insurer to provide
annuities and proceeds applied under optional modes of settlement or
under dividend options may be allocated by the insurer to one or more
separate accounts pursuant to section four thousand two hundred forty
of the Insurance Law of the State of New York;
(3) "Accident and health insurance": (i) insurance against death
or personal injury by accident or by any specified kind or kinds of
accident and insurance against sickness, ailment or bodily injury,
including insurance providing disability benefits pursuant to article
nine of the workers' compensation law, except as specified in item (ii)
hereof; and (ii) non-cancellable disability insurance, meaning
insurance against disability resulting from sickness, ailment or bodily
injury (but excluding insurance solely against accidental injury) under
any contract which does not give the insurer the option to cancel or
otherwise terminate the contract at or after one year from its
effective date or renewal date;
and any amendments to such paragraphs or provisions in substitution therefor
which may be hereafter adopted; such other kind or kinds of business now or
hereafter authorized by the laws of the State of New York to stock life
insurance companies; and such other kind or kinds of business to the extent
necessarily or properly incidental to the kind or kinds of insurance business
which the corporation is authorized to do.
(b) The corporation shall also have all other rights, powers, and
privileges now or hereafter authorized or granted by the Insurance Law of the
State of New York or any other law or laws of the State of New York to stock
life insurance companies having power to do the kind or kinds of business
hereinabove referred to and any and all other rights, powers, and privileges of
a corporation now or hereafter granted by the laws of the State of New York and
not prohibited to such stock life insurance companies.
- 2 -
<PAGE>
ARTICLE IV
The business of the corporation shall be managed under the direction of
the Board of Directors.
ARTICLE V
(a) The Board of Directors shall consist of not less than 13 (except
for vacancies temporarily unfilled) nor more than 36 Directors, as may be
determined from time to time by a vote of a majority of the entire Board of
Directors. No decrease in the number of Directors shall shorten the term of any
incumbent Director.
(b) The Board of Directors shall have the power to adopt from time to
time such By-Laws, rules and regulations for the governance of the officers,
employees and agents and for the management of the business and affairs of the
corporation, not inconsistent with this Charter and the laws of the State of New
York, as may be expedient, and to amend or repeal such by-laws, rules and
regulations, except as provided in the By-Laws.
(c) Any or all of the Directors may be removed at any time, either for
or without cause, by vote of the shareholders.
(d) No Director shall be personally liable to the corporation or any of
its shareholders for damages for any breach of duty as a Director; provided,
however, that the foregoing provision shall not eliminate or limit (i) the
liability of a Director if a judgment or other final adjudication adverse to him
or her establishes that his or her acts or omissions were in bad faith or
involved intentional misconduct or that he or she personally gained in fact a
financial profit or other advantage to which he or she was not legally entitled,
or were acts or omissions which (a) he or she knew or reasonably should have
known violated the Insurance Law of the State of New York or (b) violated a
specific standard of care imposed on Directors directly, and not by reference,
by a provision of the Insurance Law of the State of New York (or any regulations
promulgated thereunder) or (c) constituted a knowing violation of any other law;
or (ii) the liability of a Director for any act or omission prior to September
21, 1989.
- 3 -
<PAGE>
ARTICLE VI
(a) The Directors of the corporation shall be elected at each annual
meeting of shareholders of the corporation in the manner prescribed by law. The
annual meeting of shareholders shall be held at such place, within or without
the State of New York, and at such time as may be fixed by or under the By-Laws.
At each annual meeting of shareholders, directors shall be elected to hold
office for a term expiring at the next annual meeting of shareholders.
(b) Newly created directorships resulting from an increase in the
number of Directors and vacancies occurring in the Board of Directors shall be
filled by vote of the shareholders.
(c) Each Director shall be at least twenty-one years of age, and at all
times a majority of the Directors shall be citizens and residents of the United
States, and not less than three of the Directors shall be residents of the State
of New York.
(d) The Board of Directors shall elect such officers as are provided
for in the By-Laws at the first meeting of the Board of Directors following each
annual meeting of the shareholders. In the event of the failure to elect
officers at such meeting, officers may be elected at any regular or special
meeting of the Board of Directors. A vacancy in any office may be filled by the
Board of Directors at any regular or special meeting.
ARTICLE VII
The duration of the corporate existence of the corporation shall be
perpetual.
ARTICLE VIII
The amount of the capital of the corporation shall be $2,500,000, and
shall consist of 2,000,000 Common Shares, par value $1.25 per share.
- 4 -
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
BY-LAWS
-------
As Amended November 21, 1996
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
BY-LAWS
-------
Table of Contents
ARTICLE I SHAREHOLDERS................................................ 1
Section 1.1 Annual Meetings............................................ 1
Section 1.2 Notice of Meetings; Waiver................................. 1
Section 1.3 Organization; Procedure.................................... 2
Section 1.4 Action Without a Meeting................................... 2
ARTICLE II BOARD OF DIRECTORS.......................................... 2
Section 2.1 Regular Meetings........................................... 2
Section 2.2 Special Meetings........................................... 2
Section 2.3 Independent Directors; Quorum.............................. 2
Section 2.4 Notice of Meetings......................................... 3
Section 2.5 Newly Created Directorships;
Vacancies................................................ 3
Section 2.6 Presiding Officer.......................................... 3
Section 2.7 Telephone Participation in
Meetings; Action by Consent
Without Meeting.......................................... 3
ARTICLE III COMMITTEES.................................................. 4
Section 3.1 Committees................................................. 4
Section 3.2 Authority of Committees.................................... 5
Section 3.3 Quorum and Manner of Acting................................ 5
Section 3.4 Removal of Members......................................... 6
Section 3.5 Vacancies.................................................. 6
Section 3.6 Subcommittees.............................................. 6
Section 3.7 Alternate Members of Committees............................ 6
Section 3.8 Attendance of Other Directors.............................. 6
<PAGE>
ARTICLE IV OFFICERS.................................................... 6
Section 4.1 Chairman of the Board...................................... 6
Section 4.2 Vice-Chairman of the Board................................. 7
Section 4.3 President.................................................. 7
Section 4.4 Chief Executive Officer.................................... 7
Section 4.5 Secretary.................................................. 7
Section 4.6 Other Officers............................................. 8
ARTICLE V CAPITAL STOCK............................................... 8
Section 5.1 Transfers of Stock;
Registered Shareholders.................................. 8
Section 5.2 Transfer Agent and Registrar............................... 9
ARTICLE VI EXECUTION OF INSTRUMENTS..................................... 9
Section 6.1 Execution of Instruments................................... 9
Section 6.2 Facsimile Signatures of
Former Officers.......................................... 10
Section 6.3 Meaning of Term "Instruments".............................. 10
ARTICLE VII GENERAL..................................................... 10
Section 7.1 Reports of Committees...................................... 10
Section 7.2 Independent Certified
Public Accountants....................................... 10
Section 7.3 Directors' Fees............................................ 10
Section 7.4 Indemnification of Directors,
Officers and Employees................................... 10
Section 7.5 Waiver of Notice........................................... 11
Section 7.6 Company.................................................... 11
ARTICLE VIII AMENDMENT OF BY-LAWS....................................... 11
Section 8.1 Amendment of By-Laws....................................... 11
Section 8.2 Notice of Amendment........................................ 12
<PAGE>
BY-LAWS
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
ARTICLE I
---------
SHAREHOLDERS
------------
Section 1.1. Annual Meetings. The annual meeting of the shareholders of
the Company for the election of Directors and for the transaction of such other
business as properly may come before such meeting shall be held at the principal
office of the Company on the third Wednesday in the month of May at 3:00 P.M.,
local time, or at such other place, within or without the State of New York, or
on such other earlier or later date in April or May or at such other hour as may
be fixed from time to time by resolution of the Board of Directors and set forth
in the notice or waiver of notice of the meeting. [Business Corporation Law
Secs. 602(a), (b)]*
Section 1.2. Notice of Meetings; Waiver. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the shareholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called and by or at whose direction such
notice is being issued, to be given, personally or by first class mail, not
fewer than ten nor more than fifty days before the date of the meeting to each
shareholder of record entitled to vote at such meeting.
No notice of any meeting of shareholders need be given to any
shareholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting or who attends the meeting, in person or by
proxy, without protesting prior to its conclusion the lack of notice of such
meeting. [Business Corporation Law Secs. 605, 606]
- --------
* Citations are to the Business Corporation Law and Insurance Law of the State
of New York, as in effect on [date of adoption], and are inserted for reference
only, and do not constitute a part of the By-Laws.
<PAGE>
Section 1.3. Organization; Procedure. At every meeting of shareholders
the presiding officer shall be the Chairman of the Board or, in the event of his
or her absence or disability, the President or, in his or her absence, any
officer of the Company designated by the shareholders. The order of business and
all other matters of procedure at every meeting of shareholders may be
determined by such presiding officer. The Secretary, or in the event of his or
her absence or disability, an Assistant Secretary or, in his or her absence, an
appointee of the presiding officer, shall act as Secretary of the meeting.
Section 1.4. Action Without a Meeting. Any action required or permitted
to be taken by shareholders may be taken without a meeting on written consent
signed by the holders of all the outstanding shares entitled to vote on such
action. [Business Corporation Law Sec. 615]
ARTICLE II
----------
BOARD OF DIRECTORS
------------------
Section 2.1. Regular Meetings. Regular meetings of the Board of
Directors shall be held at the principal office of the Company on the third
Thursday of each month, except January and August, unless a change in place or
date is ordered by the Board of Directors. The first regular meeting of the
Board of Directors following the annual meeting of the shareholders of the
Company is designated as the Annual Meeting. [Business Corporation Law Sec. 710]
Section 2.2. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, the President,
or two directors. [Business Corporation Law Sec. 710]
Section 2.3. Independent Directors; Quorum. Not less than one-third of
the Board of Directors shall be persons who are not officers or employees of the
Company or of any entity controlling, controlled by, or under common control
with the Company and who are not beneficial owners of a controlling interest in
the voting stock of the Company or of any such entity.
A majority of the entire Board of Directors, including at least one
Director who is not an officer or employee of the Company or of any entity
controlling, controlled by, or under common control with the Company and who is
not a beneficial owner of a controlling interest in the voting stock of the
Company
<PAGE>
or of any such entity, shall constitute a quorum for the transaction of business
at any regular or special meeting of the Board of Directors, except as otherwise
prescribed by these By-Laws. Except as otherwise prescribed by law, the Charter
of the Company, or these By-Laws, the vote of a majority of the Directors
present at the time of the vote, if a quorum is present at such time, shall be
the act of the Board of Directors. A majority of the Directors present, whether
or not a quorum is present, may adjourn any meeting from time to time and from
place to place. As used in these By-Laws "entire Board of Directors" means the
total number of directors which the Company would have if there were no
vacancies. [Business Corporation Law Secs. 707, 708; Insurance Law Sec. 1202]
Section 2.4. Notice of Meetings. Notice of a regular meeting of the
Board of Directors need not be given. Notice of a change in the time or place of
a regular meeting of the Board of Directors shall be given to each Director at
least five days in advance thereof in writing and by telephone or telecopy.
Notice of each special meeting of the Board of Directors shall be given to each
Director at least 24 hours prior to the special meeting, personally or by
telephone or telegram or telecopy, and shall state in general terms the purpose
or purposes of the meeting. Any such notice for a regular or special meeting not
specifically required by this Section 2.4 to be given by telephone or telecopy
shall be deemed given to a director when sent by mail, telegram, cablegram or
radiogram addressed to such director at his or her address furnished to the
Secretary. Notice of an adjourned regular or special meeting of the Board of
Directors shall be given if and as determined by a majority of the directors
present at the time of the adjournment, whether or not a quorum is present.
[Business Corporation Law Sec. 711]
Section 2.5. Newly Created Directorships; Vacancies. Any newly created
directorships resulting from an increase in the number of Directors and
vacancies occurring in the Board of Directors for any reasons (including
vacancies resulting from the removal of a Director without cause) shall be
filled by the shareholders of the Company. [Business Corporation Law Sec. 705;
Insurance Law Sec. 4211]
Section 2.6. Presiding Officer. In the absence or inability to act of
the Chairman of the Board at any regular or special meeting of the Board of
Directors, any Vice-Chairman of the Board, or the President, as designated by
the chief executive officer, shall preside at such meeting. In the absence or
inability to act of all of such officers, the Board of Directors shall select
from among their number present a presiding officer.
Section 2.7. Telephone Participation in Meetings; Action by
Consent Without Meeting. Any Director may participate in a meeting of the Board
<PAGE>
or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and such participation shall
constitute presence in person at such meeting; provided that one meeting of the
Board each year shall be held without the use of such conference telephone or
similar communication equipment. When time is of the essence, but not in lieu of
a regularly scheduled meeting of the Board of Directors, any action required or
permitted to be taken by the Board or any committee thereof may be taken without
a meeting if all members of the Board or such committee, as the case may be,
consent in writing to the adoption of a resolution authorizing the action and
such written consents and resolution are filed with the minutes of the Board or
such committee, as the case may be. [Business Corporation Law Sec. 708]
ARTICLE III
-----------
COMMITTEES
----------
Section 3.1. Committees. (a) The Board of Directors, by resolution
adopted by a majority of the entire Board of Directors, may establish from among
its members an Executive Committee of the Board composed of three or more
Directors. Not less than one-third of the members of such committee shall be
persons who are not officers or employees of the Company or of any entity
controlling, controlled by, or under common control with the Company and who are
not beneficial owners of a controlling interest in the voting stock of the
Company or of any such entity.
(b) The Board of Directors, by resolution adopted by a majority of the
entire Board of Directors, shall establish from among its members one or more
committees with authority to discharge the responsibilities enumerated in this
subsection (b). Each such committee shall be composed of three or more Directors
and shall be comprised solely of Directors who are not officers or employees of
the Company or of any entity controlling, controlled by, or under common control
with the Company and who are not beneficial owners of a controlling interest in
the voting stock of the Company or of any such entity. Such committee or
committees shall have responsibility for:
(i) Recommending to the Board of Directors candidates for nomination
for election by the shareholders to the Board of Directors;
<PAGE>
(ii) Evaluating the performance of officers deemed by any such
committee to be principal officers of the Company and recommending their
selection and compensation;
(iii) Recommending the selection of independent certified public
accountants;
(iv) Reviewing the scope and results of the independent audit and of
any internal audit; and
(v) Reviewing the Company's financial condition.
(c) The Board of Directors, by resolution adopted from time to time by
a majority of the entire Board of Directors, may establish from among its
members one or more additional committees of the Board, each composed of five or
more Directors. Not less than one-third of the members of each such committee
shall be persons who are not officers or employees of the Company or of any
entity controlling, controlled by, or under common control with the Company and
who are not beneficial owners of a controlling interest in the voting stock of
the Company or of any such entity. [Business Corporation Law Sec. 712; Insurance
Law Sec. 1202]
Section 3.2. Authority of Committees. Each committee shall have all the
authority of the Board of Directors, to the extent permitted by law and provided
in the resolution creating such committee, provided, however, that no committee
shall have authority as to the following matters:
(a) the submission to shareholders of any action as to which
shareholder approval is required by law;
(b) the filling of vacancies in the Board of Directors or in any
committee thereof;
(c) the fixing of compensation of the Directors for serving on the
Board of Directors or any committee thereof;
(d) the amendment or repeal of the By-Laws, or the adoption of new
By-Laws; or
(e) the amendment or repeal of any resolution of the Board of Directors
unless such resolution of the Board of Directors by its terms provides that
it may be so amended or repealed.
<PAGE>
Section 3.3. Quorum and Manner of Acting. A majority of the total
membership that a committee would have if there were no vacancies (including at
least one Director who is not an officer or employee of the Company or of any
entity controlling, controlled by, or under common control with the Company and
who is not a beneficial owner of a controlling interest in the voting stock of
the Company or of any such entity) shall constitute a quorum for the transaction
of business. The vote of a majority of the members present at the time of the
vote, if a quorum is present at such time, shall be the act of such committee.
Except as otherwise prescribed by these By-Laws or by the Board of Directors,
each committee may elect a chairman from among its members, fix the times and
dates of its meetings, and adopt other rules of procedure.
Section 3.4. Removal of Members. Any member (and any alternate member)
of a committee may be removed by vote of a majority of the entire Board of
Directors.
Section 3.5. Vacancies. Any vacancy occurring in any committee for any
reason may be filled by vote of a majority of the entire Board of Directors.
Section 3.6. Subcommittees. Any committee may appoint one or more
subcommittees from its members. Any such subcommittee may be charged with the
duty of considering and reporting to the appointing committee on any matter
within the responsibility of the committee appointing such subcommittee but
cannot act in place of the appointing committee.
Section 3.7. Alternate Members of Committees. The Board of Directors
may designate, by resolution adopted by a majority of the entire Board of
Directors, one or more directors as alternate members of any committee who may
replace any absent member or members at a meeting of such committee. [Business
Corporation Law Sec. 712]
Section 3.8. Attendance of Other Directors. Except as otherwise
prescribed by the Board of Directors, members of the Board of Directors may
attend any meeting of any committee.
ARTICLE IV
----------
OFFICERS
--------
Section 4.1. Chairman of the Board. The Board of Directors may at a
regular or special meeting elect from among their number a Chairman of the
<PAGE>
Board who shall hold office, at the pleasure of the Board of Directors, until
the next Annual Meeting.
The Chairman of the Board shall preside at all meetings of the Board of
Directors and also shall exercise such powers and perform such duties as may be
delegated or assigned to or required of him or her by these By-Laws or by or
pursuant to authorization of the Board of Directors.
Section 4.2. Vice-Chairman of the Board. The Board of Directors may at
a regular or special meeting elect from among their number one or more
Vice-Chairmen of the Board who shall hold office, at the pleasure of the Board
of Directors, until the next Annual Meeting.
The Vice-Chairmen of the Board shall exercise such powers and perform
such duties as may be delegated or assigned to or required of them by these
By-Laws or by or pursuant to authorization of the Board of Directors or by the
Chairman of the Board.
Section 4.3. President. The Board of Directors shall at a regular or
special meeting elect from among their number a President who shall hold office,
at the pleasure of the Board of Directors, until the next Annual Meeting and
until the election of his or her successor.
The President shall exercise such powers and perform such duties as may
be delegated or assigned to or required of him or her by these By-Laws or by or
pursuant to authorization of the Board of Directors or (if the President is not
the chief executive officer) by the chief executive officer. The President and
Secretary may not be the same person.
Section 4.4. Chief Executive Officer. The Chairman of the Board or the
President shall be the chief executive officer of the Company as the Board of
Directors from time to time shall determine, and the Board of Directors from
time to time may determine who shall act as chief executive officer in the
absence or inability to act of the then incumbent.
Subject to the control of the Board of Directors, and to the extent not
otherwise prescribed by these By-Laws, the chief executive officer shall have
plenary power over all departments, officers, employees, and agents of the
Company, and shall be responsible for the general management and direction of
all the business and affairs of the Company.
<PAGE>
Section 4.5. Secretary. The Board of Directors shall at a regular or
special meeting elect a Secretary who shall hold office, at the pleasure of the
Board of Directors, until the next Annual Meeting and until the election of his
or her successor.
The Secretary shall issue notices of the meetings of the shareholders
and the Board of Directors and its committees, shall keep the minutes of the
meetings of the shareholders and the Board of Directors and its committees and
shall have custody of the Company's corporate seal and records. The Secretary
shall exercise such powers and perform such other duties as relate to the office
of the Secretary, and also such powers and duties as may be delegated or
assigned to or required of him or her by or pursuant to authorization of the
Board of Directors or by the Chairman of the Board or (if the Chairman of the
Board is not the chief executive officer) the chief executive officer.
Section 4.6. Other Officers. The Board of Directors may elect such
other officers as may be deemed necessary for the conduct of the business of the
Company. Each such officer elected by the Board of Directors shall exercise such
powers and perform such duties as may be delegated or assigned to or required of
him or her by the Board of Directors or the chief executive officer, and shall
hold office until the next Annual Meeting, but at any time may be suspended by
the chief executive officer or by the Board of Directors, or removed by the
Board of Directors. [Business Corporation Law Secs. 715, 716]
ARTICLE V
---------
CAPITAL STOCK
-------------
Section 5.1. Transfers of Stock; Registered Shareholders. (a) Shares of
stock of the Company shall be transferable only upon the books of the Company
kept for such purpose upon surrender to the Company or its transfer agent or
agents of a certificate (unless such shares shall be uncertificated shares)
representing shares, duly endorsed or accompanied by appropriate evidence of
succession, assignment or authority to transfer. Within a reasonable time after
the transfer of uncertificated shares, the Company shall send to the registered
owner thereof a written notice containing the information required to be set
forth or stated on certificates.
(b) Except as otherwise prescribed by law, the Board of Directors may
make such rules, regulations and conditions as it may deem expedient concerning
the subscription for, issue, transfer and registration of, shares of stock.
<PAGE>
Except as otherwise prescribed by law, the Company, prior to due presentment for
registration of transfer, may treat the registered owner of shares as the person
exclusively entitled to vote, to receive notifications, and otherwise to
exercise all the rights and powers of an owner. [Business Corporation Law Sec.
508(d), (f); Insurance Law Sec. 4203]
Section 5.2 Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars. The same person may act as transfer agent and registrar
for the Company.
ARTICLE VI
----------
EXECUTION OF INSTRUMENTS
------------------------
Section 6.1. Execution of Instruments. (a) Any one of the following,
namely, the Chairman of the Board, any Vice-Chairman of the Board, the
President, any Vice-President (including a Deputy or Assistant Vice-President or
any other Vice-President designated by a number or a word or words added before
or after the title Vice-President to indicate his or her rank or
responsibilities), the Secretary, or the Treasurer, or any officer, employee or
agent designated by or pursuant to authorization of the Board of Directors or
any committee created under these By-Laws, shall have power in the ordinary
course of business to enter into contracts or execute instruments on behalf of
the Company (other than checks, drafts and other orders drawn on funds of the
Company deposited in its name in banks) and to affix the corporate seal. If any
such instrument is to be executed on behalf of the Company by more than one
person, any two or more of the foregoing or any one or more of the foregoing
with an Assistant Secretary or an Assistant Treasurer shall have power to
execute such instrument and affix the corporate seal.
(b) The signature of any officer may be in facsimile on any such
instrument if it shall also bear the actual signature, or personally inscribed
initials, of an officer, employee or agent empowered by or pursuant to the first
sentence of this Section to execute such instrument, provided that the Board of
Directors or a committee thereof may authorize the issuance of insurance
contracts and annuity contracts on behalf of the Company bearing the facsimile
signature of an officer without the actual signature or personally inscribed
initials of any person.
<PAGE>
(c) All checks, drafts and other orders drawn on funds of the Company
deposited in its name in banks shall be signed only pursuant to authorization of
and in accordance with rules prescribed from time to time by the Board of
Directors or a committee thereof, which rules may permit the use of facsimile
signatures.
Section 6.2. Facsimile Signatures of Former Officers. If any officer
whose facsimile signature has been placed upon any instrument shall have ceased
to be such officer before such instrument is issued, it may be issued with the
same effect as if he or she had been such officer at the time of its issue.
Section 6.3. Meaning of Term "Instruments". As used in this Article VI,
the term "instruments" includes, but is not limited to, contracts and
agreements, checks, drafts and other orders for the payment of money, transfers
of bonds, stocks, notes and other securities, and powers of attorney, deeds,
leases, releases of mortgages, satisfactions and all other instruments entitled
to be recorded in any jurisdiction.
ARTICLE VII
-----------
GENERAL
-------
Section 7.1. Reports of Committees. Reports of any committee charged
with responsibility for supervising or making investments shall be submitted at
the next meeting of the Board of Directors. Reports of other committees of the
Board of Directors shall be submitted at a regular meeting of the Board of
Directors as soon as practicable, unless otherwise directed by the Board of
Directors.
Section 7.2 Independent Certified Public Accountants. The books and
accounts of the Company shall be audited throughout each year by such
independent certified public accountants as shall be selected by the Board of
Directors.
Section 7.3. Directors' Fees. The Directors shall be paid such fees for
their services in any capacity as may have been authorized by the Board of
Directors. No Director who is a salaried officer of the Company shall receive
any fees for serving as a Director of the Company. [Business Corporation Law
Sec. 713(e)]
<PAGE>
Section 7.4. Indemnification of Directors, Officers and Employees. (a)
To the extent permitted by the law of the State of New York and subject to all
applicable requirements thereof:
(i) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he or she,
or his or her testator or intestate, is or was a director, officer or
employee of the Company shall be indemnified by the Company;
(ii) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he or she,
or his or her testator or intestate serves or served any other organization
in any capacity at the request of the Company may be indemnified by the
Company; and
(iii) the related expenses of any such person in any of said categories
may be advanced by the Company.
(b) To the extent permitted by the law of the State of New York, the
Company may provide for further indemnification or advancement of expenses by
resolution of shareholders of the Company or the Board of Directors, by
amendment of these By-Laws, or by agreement. [Business Corporation Law Secs.
721-726; Insurance Law Sec. 1216]
Section 7.5. Waiver of Notice. Notice of any meeting of the Board of
Directors or any committee thereof shall not be required to be given to any
Director who submits a signed waiver of notice whether before or after the
meeting, or who attends the meeting without protesting, prior to or at its
commencement, the lack of notice to him. [Business Corporation Law Sec. 711(c)]
Section 7.6. Company. The term "Company" in these By-Laws means The
Equitable Life Assurance Society of the United States.
ARTICLE VIII
------------
AMENDMENT OF BY-LAWS
--------------------
Section 8.1. Amendment of By-Laws. Subject to Section 1210 of the
Insurance Law of the State of New York, all By-Laws of the Corporation,
<PAGE>
whether adopted by the Board of Directors or the shareholders, shall be subject
to amendment, alteration or repeal, and new By-Laws may be made, either
(a) by the shareholders at any annual or special meeting of
shareholders the notice of which shall have specified or summarized the
proposed amendment, alteration, repeal or new By-Laws, or
(b) by resolution adopted by the Board of Directors at any regular or
special meeting, the notice or waiver of notice of which, unless none is
required hereunder, shall have specified or summarized the proposed
amendment, alteration, repeal or new By-Laws,
provided, however, that the shareholders may at any time provide in the By-Laws
that any specified provision or provisions of the By-Laws may be amended,
altered or repealed only in the manner specified in the foregoing clause (a), in
which event such provision or provisions shall be subject to amendment,
alteration or repeal only in such manner. [Business Corporation Law Sec. 601(a);
Insurance Law Sec. 1210]
Section 8.2. Notice of Amendment. If any By-Law regulating an impending
election of directors is adopted, amended or repealed by the Board of Directors,
there shall be set forth in the notice of the next meeting of shareholders for
the election of directors the By-Law so adopted, amended or repealed, together
with a concise statement of the changes made. [Business Corporation Law Sec. 601
(b).]
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 24th day of February, 1997
/s/ Claude Bebear
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 6th day of February, 1997
/s/ James M. Benson
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Christopher Brocksom
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
Francoise Colloc'h
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Henri de Castries
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Joseph L. Dionne
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ William T. Esrey
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Jean-Rene Foutou
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 11th day of February, 1997
/s/ Norman C. Francis
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Donald J. Greene
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ John T. Hartley
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 19th day of February, 1997
/s/ John H.F. Haskell, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 11th day of February, 1997
/s/ W. Edwin Jarmain
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of February, 1997
/s/ G. Donald Johnston, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Winthrop Knowlton
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Arthur L. Liman
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ George T. Lowy
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ William T. McCaffrey
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Joseph J. Melone
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ George J. Sella, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of February, 1997
/s/ Dave H. Williams
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 28th day of February, 1997
/s/ Stanley B. Tulin
