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Statement of Additional Information (SAI) Supplement – February 14, 2014*
Fund    SAI dated

Variable Portfolio – American Century Growth Fund

    May 1, 2013
  

Variable Portfolio – PIMCO Mortgage-Backed Securities Fund

    May 1, 2013

Effective on or about March 21, 2014 (the Effective Date), the Funds will change their names as follows: Variable Portfolio – American Century Growth Fund will change its name to Variable Portfolio – Loomis Sayles Growth Fund and Variable Portfolio – PIMCO Mortgage-Backed Securities Fund will change its name to Variable Portfolio – TCW Core Plus Bond Fund. Accordingly, on the Effective Date, all references in the SAI to Variable Portfolio – American Century Growth Fund (American Century Growth) and Variable Portfolio – PIMCO Mortgage-Backed Securities Fund (PIMCO Mortgage-Backed Securities) are deleted and replaced with Variable Portfolio – Loomis Sayles Growth Fund (Loomis Sayles Growth) and Variable Portfolio – TCW Core Plus Bond Fund (TCW Core Plus Bond), respectively.

The information in Table 8. Investment Management Services Agreement Fee Schedule in the Service Providers – Investment Management Services section of the SAI for Variable Portfolio – TCW Core Plus Bond Fund has been hereby superseded and replaced with the following:

 

Fund   Assets
(billions)		   Annual rate at
each asset level		     Effective Fee Rate

American Century Diversified Bond

   First $1.0     0.480 %    American Century Diversified Bond – 0.450%

J.P. Morgan Core Bond

   Next $1.0     0.450 %    J.P. Morgan Core Bond – 0.450%

TCW Core Plus Bond(a)

   Next $1.0     0.400 %    TCW Core Plus Bond – 0.470%

Wells Fargo Short Duration Government

   Over $3.0     0.375 %    Wells Fargo Short Duration Government – 0.460%

 

(a) Effective April 1, 2014 through April 30, 2015, the Investment Manager has contractually agreed to waive 0.05% of its management fee (from 0.48% to 0.43%) on the first $1 billion of assets of the Fund.

The information in Table 10. Subadvisers and Subadvisory Agreement Fee Schedules in the Subadvisory Agreements subsection of the Service Providers – Investment Management Services section of the SAI for the above mentioned funds has been hereby superseded and replaced with the following:

 

Fund   Subadviser    Parent
Company		   Fee Schedule

Loomis Sayles Growth

   Loomis, Sayles & Company, L.P.
(Loomis Sayles)
(effective March 21, 2014)		    P   0.27% on all asset levels

TCW Core Plus Bond

   TCW Investment Management Company (TCW)
(effective March 21, 2014)		    N/A   0.18% on the first $500 million, reducing to 0.05% as asset levels increase

 

  P – Loomis Sayles is a subsidiary of Natixis US, which is part of Natixis Asset Management, an international asset management group based in Paris, France.

The information in Table 11. Subadvisory Fees in the Subadviser Agreements subsection of the Service Providers – Investment Management Services section of the SAI for the above mentioned funds has been hereby superseded and replaced with the following:

 

        Subadvisory Fees  
Fund   Subadviser   2012      2011      2010  
Loomis Sayles Growth   Loomis Sayles(a)     N/A         N/A         N/A   
    Former subadviser: American Century (May 10, 2010 to March 20, 2014)   $ 5,149,07       $ 4,928,452       $ 2,788,378 (b) 
TCW Core Plus Bond   TCW(a)     N/A         N/A         N/A   
    Former subadviser: Pacific Investment Management Company LLC (May 10, 2010 to March 20, 2014)   $ 2,782,867       $ 2,378,550       $ 1,940,587 (b) 

 

  (a) The subadviser began managing the Fund after its last fiscal year end and therefore no fees were paid.

 

  (b) For the fiscal period from May 7, 2010 (when the Fund became available) to December 31, 2010.

The information under the Portfolio Managers subsection of the Services Providers – Investment Management Services section of the SAI for the above mentioned funds has been hereby superseded and replaced with the following:

 

       

Other Accounts Managed (excluding the Fund)

  

Potential

Conflicts

of Interest

   Structure of
Compensation
Fund   Portfolio Manager  

Number and type

of account(a)

   Approximate
Total Net Assets		   Performance Based
Accounts(b)		    
Loomis Sayles Growth  

Loomis Sayles:

    Aziz Hamzaogullari(c)  

21 RICs

3 PIVs

37 other accounts

   $6.97 billion

$85.81 million

$1.03 billion

   None   (26)   (55)
TCW Core Plus Bond  

TCW:

  Tad Rivelle(c)  

23 RICs

36 PIVs

213 other accounts

   $45.55 billion

$4.95 billion

$26.23 billion

  

2 RICs ($261.2 M); 29 PIVs ($3.8 B);

5 other accounts (1.91 B)

   (30)   (61)
  Laird Landmann(c)  

24 RICs

36 PIVs

213 other accounts

   $41.99 billion

$4.95 billion

$26.34 billion

  

1 RIC ($253.7 M); 29 PIVs ($3.8 B);

5 other accounts (1.91 B)

    
  Stephen Kane(c)  

25 RICs

40 PIVs

213 other accounts

   $41.98 billion

$5.74 billion

$26.34 billion

  

2 RICs ($261.2 M); 30 PIVs ($4.2 B);

5 other accounts (1.91 B)

    
    Bryan Whalen(c)  

16 RICs

34 PIVs

212 other accounts

   $16.73 billion

$4.92 billion

$24.18 billion

  

29 PIVs ($3.8 B);

5 other accounts (1.91 B)

    

 

(a) RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle.

 

(b) Number of accounts for which the advisory fee paid is based in part or wholly on performance and the aggregate net assets in those accounts.

 

(c) The portfolio manager began managing the fund after its fiscal year end; reporting information is provided as of December 31, 2013.

Shareholders should retain this supplement for future reference.

*Valid until next update.

 

 

S-6466-223 A (2/14)