0000950136-95-000288.txt : 19950905 0000950136-95-000288.hdr.sgml : 19950905 ACCESSION NUMBER: 0000950136-95-000288 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19950831 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES /NY/ CENTRAL INDEX KEY: 0000727920 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 135570651 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 033-88456 FILM NUMBER: 95569727 BUSINESS ADDRESS: STREET 1: 787 SEVENTH AVE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125541234 POS AM 1 FORM S-3 Registration No. 33-88456 ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------------------------------------------------- POST-EFFECTIVE AMENDMENT NO. 2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (Exact name of registrant as specified in its charter) NEW YORK (State or other jurisdiction of incorporation or organization) 13-5570651 (I.R.S. Employer Identification No.) 787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019 (212)554-1234 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) JONATHAN E. GAINES, VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES 787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019 (212)554-1234 (Name, address, including zip code, and telephone number, including area code, 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 (202)457-5100 INCOME MANAGER SM ROLLOVER IRA PROSPECTUS DATED OCTOBER , 1995 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 $10,000 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 IRA ASSURED PAYMENT OPTION, IRA ASSURED PAYMENT OPTION PLUS, and a variety of payout options, including variable annuities and fixed annuities. The Rollover IRA offers investment options (INVESTMENT OPTIONS) that permit you to create your own strategies. These Investment Options include 10 variable investment funds (INVESTMENT FUNDS) and each Guarantee Period (GUARANTEE PERIOD) in the Guaranteed Period Account.
Investment Funds ------------------------------------------------------------------------------ Guarantee Periods Asset Allocation Series: Equity Series: Fixed Income Series: Expiration Dates: ---------------------------- ---------------------- ------------------------ ---------------------- o Conservative Investors o Growth & Income o Money Market February 15, o Growth Investors o Equity Index o Intermediate Government o 1996 through 2005* o Common Stock Securities o 1996 through 2010** o Global o International o Aggressive Stock
*On , 1995, the Guarantee Period with an Expiration Date of February 15, 2006 will become available in most states. On January 1, 1996 the Guarantee Period expiring on February 15, 1996 will no longer be available for new allocations. **Only available under the IRA Assured Payment Option and IRA Assured Payment Option Plus. On , 1995 a Guarantee Period with an Expiration Date of February 15, 2011 will become available. The number of Guarantee Periods available for investment may be limited in some states. We invest each Investment Fund in shares of a corresponding portfolio (PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are purchased by separate accounts of insurance companies. The prospectus for the Trust, which accompanies this prospectus, describes the investment objectives, policies and risks of the Portfolios. 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. 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 a current prospectus for the Trust, 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 October , 1995, 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 1995 The Equitable Life Assurance Society of the United States, New York, New York 10019. All rights reserved. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1994 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 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, 787 Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary (telephone: (212) 554-1234). 2 PROSPECTUS TABLE OF CONTENTS
GENERAL TERMS PAGE 4 FEE TABLE PAGE 6 PART 1: SUMMARY PAGE 9 What is the Rollover IRA? 9 Investment Options 9 Contributions 9 Transfers 9 Free Look Period 9 Services We Provide 9 Death Benefits 10 Guaranteed Minimum Income Benefit 10 Surrendering the Certificates 10 Distribution Methods 10 Taxes 11 Deductions from Annuity Account Value 11 Deductions from Investment Funds 11 Trust Charges to Portfolios 11 PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT FUNDS PAGE 12 Equitable Life 12 Separate Account No. 45 12 The Trust 12 The Trust's Investment Adviser 13 Investment Policies and Objectives of the Trust's Portfolios 14 PART 3: INVESTMENT PERFORMANCE PAGE 15 Performance Data for a Certificate 15 Rate of Return Data for Investment Funds 16 Communicating Performance Data 19 Money Market Fund and Intermediate Government Securities Fund Yield Information 20 PART 4: THE GUARANTEED PERIOD ACCOUNT PAGE 21 Guarantee Periods 21 Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date 22 Death Benefit Amount 23 Investments 23 PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE PAGE 24 Availability of the Certificates 24 Contributions Under the Certificates 24 Methods of Payment 24 Allocation of Contributions 24 Free Look Period 25 Annuity Account Value 25 Transfers Among Investment Options 26 Dollar Cost Averaging 27 Death Benefit 27 Guaranteed Minimum Income Benefit 28 Cash Value 29 Surrendering the Certificates to Receive the Cash Value 29 When Payments are Made 29 Assignment 29 Distribution of the Certificates 29 PART 6: DISTRIBUTION METHODS UNDER THE CERTIFICATES PAGE 31 IRA Assured Payment Option 31 IRA Assured Payment Option Plus 34 Withdrawals 35 Income Annuity Options 37 PART 7: DEDUCTIONS AND CHARGES PAGE 39 Charges Deducted from the Annuity Account Value 39 Charges Deducted from the Investment Funds 40 Trust Charges to Portfolios 40 Sponsored Arrangements 41 PART 8: VOTING RIGHTS PAGE 42 Trust Voting Rights 42 Voting Rights of Others 42 Separate Account Voting Rights 42 Changes in Applicable Law 42 PART 9: TAX ASPECTS OF THE CERTIFICATES PAGE 43 Tax-Qualified Individual Retirement Annuities (IRAs) 43 Penalty Tax on Early Distributions 47 Tax Penalty for Insufficient Distributions 48 Tax Penalty for Excess Distributions or Accumulation 48 Federal and State Income Tax Withholding 48 Generation Skipping Tax 49 Impact of Taxes to Equitable Life 49 Transfers Among Investment Options 49 Tax Changes 49 PART 10: INDEPENDENT ACCOUNTANTS PAGE 50 APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE PAGE 51 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE PAGE 52 APPENDIX III: GMDB SPECIAL ADJUSTMENT PAGE 53 APENDIX IV: GMIB EXAMPLE PAGE 54 APPENDIX V: EXAMPLE OF PAYMENTS UNDER THE IRA ASSURED PAYMENT OPTION AND APO PLUS PAGE 55 APPENDIX VI: IRS TAX DEDUCTION TABLE PAGE 56 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS PAGE 57
3 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 annuity benefits. ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under the Rollover IRA Certificate. See "Annuity Account Value" in Part 5. 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. 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. GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods. GUARANTEED RATE--The annual interest rate established for each allocation to a Guarantee Period. 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. Under this option amounts are allocated to the Guarantee Periods and the Life Contingent Annuity. No amounts may be allocated to the Investment Funds. IRA ASSURED PAYMENT OPTION PLUS--A distribution option which provides guaranteed lifetime income. Under this option amounts are allocated to the Guarantee Periods, the Life Contingent Annuity and to the Investment Funds. The amount in the Investment Funds is then systematically converted to guaranteed lifetime income under the IRA Assured Payment Option. 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 the IRA Assured Payment Option Plus. MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date. PORTFOLIOS--The portfolios of the 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 1. 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. TRUST--The Hudson River Trust, a mutual fund in which the assets of separate accounts of insurance companies are invested. VALUATION PERIOD--Each Business Day together with any preceding non-business days. 5 ------------------------------------------------------------------------------- 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 the Trust. Premium tax charges may also be applicable. For a complete description of the charges under the Certificate, see "Part 7: Deductions and Charges." For a complete description of the Trust's charges and expenses, see the prospectus for the Trust. As explained in Part 4, 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. However, if there is insufficient value in the Investment Funds, all or a portion of the annual contract fee, if any, may be deducted from your Annuity Account Value in the Guaranteed Period Account rather than the Investment Funds. See "Part 7: Charges and Deductions." A market value adjustment (either positive or negative) also may be applicable to a withdrawal, transfer or surrender of amounts from a Guarantee Period. See "Part 4: 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 each contribution, the Contract Year in which we receive that contribution is "Contract Year 1")(1)
CONTRACT YEAR ---------- 1 ... 7.00% 2 ... 6.00 3 ... 5.00 4 ... 4.00 5 ... 3.00 6 ... 2.00 7 ... 1.00 8+ .. 0.00
Transfer Charge (2) ............................................................................ $0.00 Guaranteed Minimum Death Benefit Charge (percentage deducted annually on each Processing Date as a percentage of the guaranteed minimum death benefit then in effect)(3) .................... 0.35% ANNUAL CONTRACT FEE (DEDUCTED FROM ANNUITY ACCOUNT VALUE ON EACH PROCESSING DATE)(4) ----------------------------------------------------------------------------------------------- If the initial contribution is less than $25,000 .............................................. $30 If the initial contribution is $25,000 or more ................................................ $0 SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT FUND) ----------------------------------------------------------------------------------------------- Mortality and Expense Risk Charge .............................................................. 0.90% Asset Based Administrative Charge .............................................................. 0.25% ------- Total Separate Account Annual Expenses ........................................................ 1.15% =======
TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS IN EACH PORTFOLIO)
INVESTMENT PORTFOLIOS ----------------------------------------------------------- CONSERVATIVE GROWTH GROWTH & EQUITY COMMON INVESTORS INVESTORS INCOME INDEX STOCK -------------- ----------- ---------- -------- -------- Investment Advisory Fee 0.55% 0.54% 0.55% 0.35% 0.36% Other Expenses 0.04% 0.05% 0.23% 0.14% 0.02% -------------- ----------- ---------- -------- -------- TOTAL TRUST ANNUAL EXPENSES(5) 0.59% 0.59% 0.78% 0.49% 0.38% ============== =========== ========== ======== ========
INTERMEDIATE AGGRESSIVE MONEY GOVT. GLOBAL INTERNATIONAL STOCK MARKET SECURITIES -------- --------------- ------------ -------- -------------- Investment Advisory Fee 0.54% 0.90% 0.47% 0.40% 0.50% Other Expenses 0.15% 0.41% 0.02% 0.02% 0.06% -------- --------------- ------------ -------- -------------- TOTAL TRUST ANNUAL EXPENSES(5) 0.69% 1.31% 0.49% 0.42% 0.56% ======== =============== ============ ======== ==============
6 --------------- Notes: (1) Deducted upon a withdrawal with respect to amounts in excess of the 15% free corridor amount, and upon a surrender. See "Part 7: Deductions and Charges," "Withdrawal Charge." (2) We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. (3) This charge also covers the Guaranteed Minimum Income Benefit. See "Part 7: Deductions and Charges," "Guaranteed Minimum Death Benefit Charge" and "Part 5: Provisions of the Certificates and Services We Provide," "Guaranteed Minimum Income Benefit." (4) This charge is incurred at the beginning of the Contract Year and deducted on the Processing Date. See "Part 7: Deductions and Charges," "Annual Contract Fee." (5) Expenses shown for all Portfolios except the International Portfolio are for the fiscal year ended December 31, 1994. The amount shown for the Equity Index Portfolio, which was established on March 1, 1994, is annualized. The amount shown for the International Portfolio, which was established on April 3, 1995, is an estimate. The investment advisory fee for each Portfolio may vary from year to year depending upon the average daily net assets of the respective Portfolio of the 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 "Trust Charges to Portfolios" in Part 7. EXAMPLES The examples below show the expenses that a hypothetical Certificate Owner would pay 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) The annual contract fee was computed based on an initial contribution of $10,000. These examples should not be considered a representation of past or future expenses for each Investment Fund or Portfolio. Actual expenses may be greater or less than those shown. Similarly, the annual rate of return assumed in the examples is not an estimate or guarantee of future investment performance. IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $90.65 $120.95 Growth Investors 90.65 120.95 EQUITY SERIES: Growth & Income 92.54 126.65 Equity Index 89.66 117.95 Common Stock 88.57 114.63 Global 91.65 123.96 International 97.81 142.45 Aggressive Stock 89.66 117.95 FIXED INCOME SERIES: Money Market 88.96 115.84 Intermediate Government Securities 90.36 120.06
7 IF YOU DO NOT SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $24.36 $75.13 Growth Investors 24.36 75.13 EQUITY SERIES: Growth & Income 26.25 80.83 Equity Index 23.37 72.12 Common Stock 22.28 68.81 Global 25.36 78.14 International 31.52 96.61 Aggressive Stock 23.37 72.12 FIXED INCOME SERIES: Money Market 22.67 70.01 Intermediate Government Securities 24.07 74.23 --------------- 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 6. The examples do not reflect charges for state premium or other applicable state or local taxes that may also be deducted in certain jurisdictions.
8 ------------------------------------------------------------------------------- PART 1: SUMMARY ------------------------------------------------------------------------------- The following Summary is qualified in its entirety by the terms of the Certificate when issued and the more detailed information appearing elsewhere in this prospectus (see "Prospectus Table of Contents"). 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. The Rollover IRA also makes available several distribution methods which include the IRA Assured Payment Option, IRA Assured Payment Option Plus, withdrawal options and fixed and variable income annuity options. INVESTMENT OPTIONS The Rollover IRA offers the following Investment Options which permit you to create your own strategy for retirement savings. All available Investment Options may be selected under a Certificate. INVESTMENT FUNDS o Asset Allocation Series: the Conservative Investors and Growth Investors Funds o Equity Series: the Growth & Income, Equity Index, Common Stock, Global, International and Aggressive Stock Funds o Fixed Income Series: the Money Market and Intermediate Government Securities Funds GUARANTEE PERIODS o Guarantee Periods maturing in each of calendar years 1996 through 2005. A Guarantee Period maturing in calendar year 2006 will become available on , 1995. However it will not become available in Florida until February 15, 1996. o Guarantee Periods maturing in 1996 through 2010 under IRA Assured Payment Option and Assured Payment Option Plus. A Guarantee Period maturing in calendar year 2011 will become available on , 1995. However it will not become available in Florida until February 15, 1996. o On January 1, 1996 the Guarantee Period maturing on February 15, 1996 will no longer be available for new allocations. CONTRIBUTIONS o To put a Certificate into effect, you must contribute at least $10,000 in the form of either a rollover contribution or a direct custodian-to-custodian transfer from one or more other individual retirement arrangements. o Subsequent contributions may be made in an amount of at least $1,000 at any time. Subsequent contributions must not exceed $2,000 for any taxable year, except for additional rollover contributions or direct transfers, both of which are unlimited. We may refuse to accept any contribution if the sum of all contributions under a Certificate would then total more than $1,500,000. TRANSFERS You may make an unlimited number of transfers among the Investment Funds. However, there are restrictions for transfers to and from the Guaranteed Period Account. Transfers from a Guarantee Period may result in a market value adjustment. Transfers among Investment Options are currently free of charge. Transfers among the Investment Options are not taxable. 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 may cancel it by sending it to our Processing Office. 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. 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 the Separate Account and the Trust; and o Written confirmation of financial transactions. 9 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 SENT BY EXPRESS MAIL: Equitable Life Income Management Group 200 Plaza Drive Secaucus, NJ 07096 DEATH BENEFITS If you die before the Annuity Commencement Date, the Rollover IRA provides a death benefit. The beneficiary will be paid the greater of the Annuity Account Value in the Investment Funds and the guaranteed minimum death benefit, plus any death benefit provided with respect to the Guaranteed Period Account. GUARANTEED MINIMUM INCOME BENEFIT When you elect the IRA Assured Payment Option on one of the dates indicated below, the Guaranteed Minimum Income Benefit provides a minimum guaranteed lifetime income from the application of an amount to the IRA Assured Payment Option. On the Transaction Date the lifetime income to be provided will be based on an amount derived from the guaranteed minimum death benefit and applied at guaranteed maximum purchase rates. However, if the Annuity Account Value in the Investment Funds applied at current Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity would result in higher payments, the higher payments will be provided. The Guaranteed Minimum Income Benefit applies if you elect the IRA Assured Payment Option on any one of the Contract Date anniversaries during Contract Years 7 through 15. Payment of subsequent contributions made after the first Contract Year may affect when the Guaranteed Minimum Income Benefit will apply. Once the IRA Assured Payment Option is elected, the guaranteed minimum death benefit will no longer be in effect. SURRENDERING THE CERTIFICATES You may surrender a Certificate and receive the Cash Value at any time before the Annuity Commencement Date while the Annuitant is living. Withdrawal charges and a market value adjustment may apply. A surrender may also be subject to income tax and tax penalty. DISTRIBUTION METHODS IRA ASSURED PAYMENT OPTION The IRA Assured Payment Option provides guaranteed lifetime income. You initially receive annual payments during a fixed period you select. These payments represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. During the fixed period you can take withdrawals from your Annuity Account Value. After the fixed period ends, annual payments are made out of the Life Contingent Annuity. The Life Contingent Annuity does not have a Cash Value or an Annuity Account Value. There is no death benefit under the Life Contingent Annuity and income is paid only if you (or a joint Annuitant) are living at the date annuity benefits begin. IRA ASSURED PAYMENT OPTION PLUS The IRA Assured Payment Option Plus is a variation of the IRA Assured Payment Option. The IRA Assured Payment Option Plus enables you to keep a portion of your Annuity Account Value in the Investment Funds while systematically converting such Annuity Account Value into guaranteed lifetime income under the IRA Assured Payment Option. When you elect the IRA Assured Payment Option Plus, a portion of your Annuity Account Value is allocated to the IRA Assured Payment Option to provide a minimum guaranteed lifetime income, and the remaining Annuity Account Value is allocated to the Investment Funds. Every three years during the fixed period, a portion of the remaining Annuity Account Value in the Investment Funds is applied to increase the guaranteed annual payments under the IRA Assured Payment Option. 10 WITHDRAWALS o Lump Sum Withdrawals--After the first Contract Year and before the Annuity Commencement Date while the Certificate is in effect, you may take a Lump Sum Withdrawal from your Certificate once per Contract Year at any time during such Contract Year. The minimum withdrawal amount is $1,000. o Minimum Distribution Withdrawals--You may also withdraw funds annually under our Minimum Distribution Withdrawals option, which is designed to meet the minimum distribution requirements set forth in the Code. The minimum withdrawal amount is $250. o Substantially Equal Payment Withdrawals--If you are below age 59 1/2 , this withdrawal option is designed to allow you to withdraw funds annually and not have a 10% penalty tax apply. This is accomplished by distribution of substantially equal periodic payments over your life expectancy or over the joint life expectancies of you and your spouse. If you change or stop such distributions before the later of age 59 1/2 or five years from the date of the first distribution, the 10% penalty tax may apply. Withdrawals may be subject to a withdrawal charge and withdrawals from Guarantee Periods prior to their Expiration Date will result in a market value adjustment. Withdrawals may be subject to income tax and tax penalty. INCOME ANNUITY OPTIONS The Certificates also provide income annuity options to which amounts may be applied at the Annuity Commencement Date. The income annuity options are offered on a fixed and variable basis. TAXES Generally, any earnings on contributions made to the Certificate will not be included in your taxable income until distributions are made from the Certificate. Also, distributions prior to your attaining age 59 1/2 may be subject to tax penalty. DEDUCTIONS FROM ANNUITY ACCOUNT VALUE Withdrawal Charge A withdrawal charge will be imposed as a percentage of the initial and each subsequent contribution if (i) a Lump Sum Withdrawal exceeds the 15% free corridor amount or, (ii) a Minimum Distribution Withdrawal, when added to a Lump Sum Withdrawal previously taken in the same Contract Year, exceeds the 15% free corridor, or (iii) if the Certificate is surrendered. 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 purposes of the table, for each contribution the Contract Year in which we receive that contribution is "Contract Year 1." Guaranteed Minimum Death Benefit Charge We deduct annually on each Processing Date an amount equal to 0.35% of the guaranteed minimum death benefit in effect on such Processing Date. This charge also covers the Guaranteed Minimum Income Benefit. Annual Contract Fee The charge will be $30 per Contract Year if your initial contribution is less than $25,000, and zero if your initial contribution is $25,000 or more. Premium Taxes Generally, we deduct a charge for any premium taxes from the Annuity Account Value on the Annuity Commencement Date. The current premium tax charge that might be imposed varies by state and ranges from 0 to 2.25%. DEDUCTIONS FROM INVESTMENT FUNDS Mortality and Expense Risk Charge We charge each Investment Fund a daily asset based charge for mortality and expense risks equivalent to an annual rate of 0.90%. Asset Based Administrative Charge We charge each Investment Fund a daily asset based charge to cover a portion of the administrative expenses under the Certificate equivalent to an annual rate of 0.25%. TRUST CHARGES TO PORTFOLIOS Investment advisory fees and other expenses of the Trust are charged daily against the Trust's assets. These are reflected in the Portfolio's daily share price and in the daily Accumulation Unit Value for the Investment Funds. 11 ------------------------------------------------------------------------------- PART 2: 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 787 Seventh Avenue, New York, New York 10019. We are authorized to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico and the Virgin Islands. We maintain local offices throughout the United States. Equitable Life and its affiliates managed approximately $174 billion of assets as of December 31, 1994. Equitable Life is a wholly owned subsidiary of The Equitable Companies Incorporated (the "Holding Company"). The largest stockholder of the Holding Company is AXA, a French insurance holding company. AXA beneficially owns 60.5% of the Holding Company's outstanding common stock as well as $392.2 million stated value of its issued and outstanding Series E Convertible Preferred Stock. Under its investment arrangements with Equitable Life and the Holding Company, AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable Life. AXA is the principal holding company for most of the companies in one of the largest insurance groups in Europe. The majority of AXA's stock is controlled by a group of five French mutual insurance companies. 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 (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 the 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. THE TRUST The Trust is an open-end diversified management investment company, more commonly called a mu- 12 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 the Trust. The Trust commenced operations in January 1976 with a predecessor of its Common Stock Portfolio. The Trust does not impose a sales charge or "load" for buying and selling its shares. All dividend distributions to the Trust are reinvested in full and fractional shares of the Portfolio to which they relate. More detailed information about the Trust, its investment objectives, policies, restrictions, risks, expenses and all other aspects of its operations appears in its prospectus which accompanies this prospectus or in its statement of additional information. THE TRUST'S INVESTMENT ADVISER The Trust is advised by Alliance Capital Management L.P. (Alliance), which is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. On December 31, 1994, Alliance was managing over $121 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 and international markets. Alliance prides itself on its ability to attract and retain a quality, professional work force. Alliance employs 177 investment professionals, including 81 research analysts. Portfolio managers have an average investment experience of more than 16 years. Alliance's main office is located at 1345 Avenue of the Americas, New York, New York 10105. Alliance, a publicly-traded limited partnership, is indirectly majority-owned by Equitable Life. 13 INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS Each Portfolio has a different investment objective which it tries to achieve by following separate investment policies. The policies and objectives of each Portfolio will affect its return and its risks. There is no guarantee that these objectives will be achieved. The policies and objectives of the Trust's Portfolios are as follows:
Portfolio Investment Policy Objective --------------------------- ----------------------------------------------------- ----------------------------- ASSET ALLOCATION SERIES: Conservative Investors Diversified mix of publicly-traded, fixed-income and High total return without, in equity securities; asset mix and security selection the adviser's opinion, undue are primarily based upon factors expected to reduce risk to principal risk. The Portfolio is generally expected to hold approximately 70% of its assets in fixed income securities and 30% in equity securities. 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 determination of reasonable of 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: Growth & Income Primarily income producing common stocks and High total return through a securities convertible into common stocks. combination of current income and capital appreciation Equity Index Selected securities in the S&P 500 Index (the Total return performance "Index") which the advisor believes will in the (before trust expenses) that aggregate, approximate the performance results of the approximates the investment index. performance of the Index (including reinvestment of dividends) at a risk level consistent with that of the Index. Common Stock Primarily common stock and other equity-type Long-term growth of capital instruments. and increasing income Global Primarily equity securities of non-United States as Long-term growth of capital well as United States companies. International Primarily equity securities selected principally to Long-term growth of capital permit participation in non-United States companies with prospects for growth. Aggressive Stock Primarily common stocks and other equity-type Long-term growth of capital securities issued by medium and other smaller sized companies with strong growth potential. FIXED INCOME SERIES: Money Market Primarily high quality short-term money market High level of current income instruments. while preserving assets and maintaining liquidity Intermediate Government Primarily debt securities issued or guaranteed by the High current income Securities U.S. government, its agencies and instrumentalities. consistent with relative Each investment will have a final maturity of not stability of principal more than 10 years or a duration not exceeding that of a 10-year Treasury note.
14 ------------------------------------------------------------------------------- PART 3: INVESTMENT PERFORMANCE ------------------------------------------------------------------------------- This Part presents performance data for each of the Investment Funds (except the International Fund) calculated by two methods. The first method, used in calculating values for the two tables in "Performance Data for a Certificate," reflects all applicable fees and charges other than the charge for premium taxes. The second method, used in preparing rates of return for the three tables in "Rate of Return Data for Investment Funds," reflects all fees and charges other than the withdrawal charge, the guaranteed minimum death benefit charge, the annual contract fee and the charge for premium taxes. These additional charges would effectively reduce the rates of return credited to a particular Certificate. The Separate Account commenced operations in May 1995 and no Certificates were issued prior to that date. The calculations of investment performance shown below are based on the actual investment results of the Portfolios of the Trust, from which certain fees and charges applicable under the Rollover IRA have been deducted. The results shown are not an estimate or guarantee of future investment performance, and do not reflect the actual experience of amounts invested under a particular Certificate. Performance data is not shown for the International Fund as the underlying Portfolio commenced operation in April 1995. See "Part 4: The Guaranteed Period Account" for information on the Guaranteed Period Account. PERFORMANCE DATA FOR A CERTIFICATE 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, 1994 by the $1,000 contribution made at the beginning of each period illustrated. The annual contract fee is computed based on an initial contribution of $10,000. 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. GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1994
LENGTH OF INVESTMENT PERIOD -------------------------------------------------- INVESTMENT ONE THREE FIVE TEN SINCE FUND YEAR YEARS YEARS YEARS INCEPTION* ---------------------- ------ -------- -------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors $874 $1,018 $1,287 -- $1,325 Growth Investors 881 1,060 1,747 -- 1,811 EQUITY SERIES: Growth & Income 908 -- -- -- 906 Equity Index -- -- -- -- 928 Common Stock 890 1,145 1,443 $3,526 8,809 Global 962 1,255 1,516 -- 1,802 Aggressive Stock 868 973 1,986 -- 4,017
15 GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1994 (CONTINUED)
LENGTH OF INVESTMENT PERIOD -------------------------------------------------- INVESTMENT ONE THREE FIVE TEN SINCE FUND YEAR YEARS YEARS YEARS INCEPTION* ----------------------------- ------ -------- -------- -------- ------------ FIXED INCOME SERIES: Money Market $955 $1,004 $1,140 $1,548 $2,123 Intermediate Govt. Securities 873 1,013 -- -- 1,135 --------------- * See footnote below.
AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1994
LENGTH OF INVESTMENT PERIOD ----------------------------------------------------- INVESTMENT THREE FIVE TEN SINCE FUND ONE YEAR YEARS YEARS YEARS INCEPTION* ----------------------------- ---------- -------- ------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors (12.62)% 0.58% 5.18% -- 4.80% Growth Investors (11.94) 1.97 11.81 -- 10.41 EQUITY SERIES: Growth & Income (9.25) -- -- -- (4.84) Equity Index -- -- -- -- (7.22) Common Stock (11.00) 4.61 7.46 13.43% 12.13 Global (3.81) 7.88 8.68 -- 7.64 Aggressive Stock (13.16) (0.90) 14.71 -- 16.71 FIXED INCOME SERIES: Money Market (4.46) 0.15 2.66 4.47 5.52 Intermediate Govt. Securities (12.72) 0.42 -- -- 3.21 --------------- * The "Since Inception" dates are as follows: Conservative Investors (October 2, 1989); Growth Investors (October 2, 1989); Growth & Income (October 1, 1993); Equity Index (March 1, 1994); Common Stock (January 13, 1976); Global (August 27, 1987); Aggressive Stock (January 27, 1986); Money Market (July 13, 1981); and Intermediate Govt. Securities (April 1, 1991). The "Since Inception" numbers for the Equity Index Fund are unannualized.
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. Performance data of the Money Market and Common Stock Funds for the 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 Funds are based on the date of inception of the predecessor separate accounts. This performance data has been adjusted to reflect the maximum investment advisory fee payable for the corresponding Portfolio of the Trust as well as an assumed charge of 0.06% for direct operating expenses. Performance data for the remaining Investment Funds reflect (i) the investment results of the corre- 16 sponding Portfolios of the Trust from the date of inception of those Portfolios and (ii) the actual investment advisory fee and direct operating expenses of the relevant Portfolio. The performance data for all periods has also been adjusted to reflect the Separate Account mortality and expense risk charge, and the asset based administrative charge equal to a total of 1.15% relating to the Certificates, as well as the Trust's expenses. 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 risk charge and the asset based administrative 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: CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite Index and 30% Standard & Poor's 500 Index. GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index and 70% Standard & Poor's 500 Index. Equity Series: GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index and 25% Value Line Convertible Index. EQUITY INDEX: March 1, 1994; Standard & Poor's 500 Index which includes reinvested dividends. COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index which includes reinvested dividends. GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index. AGGRESSIVE STOCK: January 27, 1986; 50% Stan- dard & Poor's 500 Mid-Cap Total Return Index and 50% Russell 2000 Small Stock Index. Fixed Income Series: MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill Index. INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate Government Bond Index. 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 insurance policies or annuity contracts. Lipper data provide a more accurate picture than market benchmarks of the Roll-over IRA performance relative to other variable annuity products. ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION --------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS (5.32)% 2.71% 6.17% -- -- 6.44% Lipper Income (3.13) 5.30 7.67 -- -- 7.77 Benchmark (1.97) 5.14 7.85 -- -- 8.11 GROWTH INVESTORS (4.64) 4.04 12.60 -- -- 12.77 Lipper Flexible Portfolio (3.65) 4.46 7.01 -- -- 6.86 Benchmark (0.13) 5.83 8.39 -- -- 8.49 EQUITY SERIES: GROWTH & INCOME (1.95) -- -- -- -- (1.99) Lipper Growth & Income (1.62) -- -- -- -- 0.03 Benchmark 0.01 -- -- -- -- 1.84
17 ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION --------- --------- --------- ---------- ---------- ----------- EQUITY INDEX -- -- -- -- -- 0.07%** Lipper S&P 500 Index Funds -- -- -- -- -- (0.54)** Benchmark -- -- -- -- -- 1.28 ** COMMON STOCK (3.70)% 6.60% 8.43% 13.86% 13.95% 12.58 Lipper Growth (2.42) 5.10 7.90 11.81 12.34 11.95 Benchmark 1.32 6.25 8.68 14.38 14.50 13.12 GLOBAL 3.49 9.80 9.66 -- -- 9.03 Lipper Global (2.40) 7.58 4.57 -- -- 3.52 Benchmark 5.08 6.85 3.67 -- -- 4.97 AGGRESSIVE STOCK (5.86) 1.30 15.43 -- -- 17.27 Lipper Small Company Growth (2.68) 20.63 12.56 -- -- 14.45 Benchmark (0.94) 7.46 9.65 -- -- 11.41 FIXED INCOME SERIES: MONEY MARKET 2.84 2.33 3.77 5.05 -- 6.31 Lipper Money Market 2.62 2.15 3.56 4.94 -- 6.46 Benchmark 4.22 3.63 4.90 5.98 -- 7.19 INTERMEDIATE GOVERNMENT SECURITIES (5.42) 2.55 -- -- -- 4.93 Lipper U.S. Government (4.94) 2.87 -- -- -- 5.57 Benchmark (1.75) 4.36 -- -- -- 6.55
--------------- * See footnotes on next page. ** Unannualized. CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION --------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS (5.32)% 8.36% 35.02% -- -- 38.81% Lipper Income (3.13) 16.75 44.72 -- -- 48.12 Benchmark (1.97) 16.24 45.93 -- -- 50.68 GROWTH INVESTORS (4.64) 12.65 81.31 -- -- 88.03 Lipper Flexible Portfolio (3.65) 14.00 40.35 -- -- 41.66 Benchmark (0.13) 18.54 49.63 -- -- 53.39 EQUITY SERIES: GROWTH & INCOME (1.95) -- -- -- -- (2.50) Lipper Growth & Income (1.62) -- -- -- -- 0.04 Benchmark 0.01 -- -- -- -- 2.30 EQUITY INDEX -- -- -- -- -- 0.07** Lipper S&P 500 Index Funds -- -- -- -- -- (0.54)** Benchmark -- -- -- -- -- 1.28** COMMON STOCK (3.70) 21.20 50.06 266.48% 610.21% 846.46 Lipper Growth (2.42) 16.11 46.28 205.37 472.97 753.79 Benchmark 1.32 19.95 51.64 283.20 662.68 938.20 GLOBAL 3.49 32.51 58.79 -- -- 88.89 Lipper Global (2.40) 24.49 25.04 -- -- 29.26 Benchmark 5.08 21.99 19.74 -- -- 42.79 AGGRESSIVE STOCK (5.86) 3.95 105.30 -- -- 315.16 Lipper Small Company Growth (2.68) 75.55 80.72 -- -- 236.98 Benchmark (0.94) 24.10 58.49 -- -- 162.45
--------------- * See footnotes on next page. ** Unannualized. 18 CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- FIXED INCOME SERIES: MONEY MARKET 2.84% 7.18% 20.37% 63.67% -- 128.07% Lipper Money Market 2.62 6.60 19.12 62.02 -- 132.86 Benchmark 4.22 11.29 26.99 78.68 -- 155.41 INTERMEDIATE GOVERNMENT SECURITIES (5.42) 7.86 -- -- -- 19.84 Lipper U.S. Government (4.94) 8.85 -- -- -- 22.56 Benchmark (1.75) 13.65 -- -- -- 26.89
YEAR-BY-YEAR RATES OF RETURN*
1982 1983 1984 1985 -------- -------- --------- -------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS -- -- -- -- GROWTH INVESTORS -- -- -- -- EQUITY SERIES: GROWTH & INCOME -- -- -- -- EQUITY INDEX -- -- -- -- COMMON STOCK*** 16.21% 24.64% (3.08)% 31.88% GLOBAL -- -- -- -- AGGRESSIVE STOCK -- -- -- -- FIXED INCOME SERIES: MONEY MARKET*** 11.71 7.69 9.58 6.91 INTERMEDIATE GOVERNMENT SECURITIES -- -- -- --
(RESTUBBED TABLE CONTINUED FROM ABOVE)
1986 1987 1988 1989 1990 1991 1992 1993 1994 -------- --------- -------- ------- -------- -------- -------- -------- --------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS -- -- -- 2.80% 5.17% 18.47% 4.57% 9.49% (5.32)% GROWTH INVESTORS -- -- -- 3.71 9.34 47.20 3.73 13.94 (4.64) EQUITY SERIES: GROWTH & INCOME -- -- -- -- -- -- -- (0.54) (1.95) EQUITY INDEX -- -- -- -- -- -- -- -- 0.07** COMMON STOCK*** 15.99% 6.25% 21.03% 24.16 (9.17) 36.31 2.02 23.40 (3.70) GLOBAL -- (13.62) 9.92 25.58 (7.15) 29.05 (1.66) 30.16 3.49 AGGRESSIVE STOCK 34.43 6.07 (0.03) 41.86 6.92 84.72 (4.29) 15.43 (5.86) FIXED INCOME SERIES: MONEY MARKET*** 5.38 5.41 6.09 7.93 7.00 4.96 2.34 1.81 2.84 INTERMEDIATE GOVERNMENT SECURITIES -- -- -- -- -- 11.11 4.38 9.31 (5.42) --------------- * Returns do not reflect the withdrawal charge, the guaranteed minimum death benefit charge, and the annual contract fee. ** Unannualized. *** Prior to 1982 the Year-by-Year Rates of Return were: 1976 1977 1978 1979 1980 1981 COMMON STOCK 8.19% (10.27)% 6.99% 28.32% 48.34% (6.93)% MONEY MARKET - - - - - 5.70
COMMUNICATING PERFORMANCE DATA In reports or other communications or in advertising material, we may describe general economic and market conditions affecting the Separate Account and the 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 "Fund Inception Dates and Comparative Benchmarks" in this Part 3, 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 19 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, guaranteed minimum death benefit charge and any premium tax charges. 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, guaranteed minimum death benefit charge and any premium tax charges. See "Part 5: Money Market Fund and Intermediate Government Securities Fund Yield Information" in the SAI. 20 ------------------------------------------------------------------------------- PART 4: 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 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). 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 such Guarantee Period on such date. Guarantee Periods and Expiration Dates We currently offer Guarantee Periods ending on February 15 for each of the maturity years 1996 through 2005. Not all of these Guarantee Periods will be available to Annuitants ages 71 and above. See "Allocation of Contributions" in Part 5. As Guarantee Periods expire we expect to add maturity years so that generally 10 are available in all states at any time. On , 1995 the Guarantee Period maturing on February 15, 2006 will become available without election of the IRA Assured Payment Option or IRA Assured Payment Option Plus. However it will not become available in Forida until February 15, 1996. Under the IRA Assured Payment Option and Assured Payment Option Plus, in addition to the Guarantee Periods above, Guarantee Periods ending on February 15 for each of the maturity years 2006 through 2010 are also available. On , 1995 a Guarantee Period maturing on February 15, 2011 will become available. However, it will not become available in Florida until February 15, 1996. On January 1, 1996 the Guarantee Period maturing on February 15, 1996 will no longer be available for new allocations. 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 your 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 October , 1995 and the related price per $100 of Maturity Value for each currently available Guarantee Period were as follows:
GUARANTEE PERIODS WITH EXPIRATION DATE GUARANTEED RATE FEBRUARY 15 OF AS OF OCTOBER , PRICE PER $100 OF MATURITY YEAR 1995 MATURITY VALUE ------------------- --------------- ------------------ 1996 X.XX% $XX.XX 1997 X.XX XX.XX 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
21 Available under the IRA Assured Payment Option and Assured Payment Option Plus*
2006 X.XX% $XX.XX 2007 X.XX XX.XX 2008 X.XX XX.XX 2009 X.XX XX.XX 2010 X.XX XX.XX
--------------- * May not be available in all states. 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 15 of each of years 1997 through 2001, then according to the above table the lump sum contribution you would have to make as of October __, 1995 would be $XXX.XX (i.e., the sum of the price per $100 of Maturity Value for each maturity year from 1997 through 2001). 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 5: (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, surrenders 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 of a portion of the amount in a Guarantee Period will be a percentage of the market value adjustment that would be ap- 22 plicable 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% annually. 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. DEATH BENEFIT AMOUNT The death benefit provided with respect to the Guaranteed Period Account is equal to the Annuity Account Value in the Guaranteed Period Account or, if greater, the sum of the Guaranteed Period Amounts. See "Annuity Account Value" in Part 5. INVESTMENTS Contributions received under the Certificates and allocated to Guarantee Periods will be held in a "nonunitized" separate account established by Equitable Life under the laws of New York. A nonunitized separate account is a separate account in which the Certificate Owner has no claim on, or participation in the performance of, the assets held in the account. 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. 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 6. 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 (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 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. 23 ------------------------------------------------------------------------------- PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE ------------------------------------------------------------------------------- The provisions discussed in this Part 5 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 Assured Payment Option Plus under your Rollover IRA as discussed in Part 6. The provisions of your Certificate may be restricted by applicable laws or regulations. AVAILABILITY OF THE CERTIFICATES The Certificates are available for issue ages 20 through 78. CONTRIBUTIONS UNDER THE CERTIFICATES Your initial contribution must be at least $10,000. 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 9: Tax Aspects of the Certificates." You may make subsequent contributions in an amount of at least $1,000. 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 a Certificate would then total more than $1,500,000. "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 78. 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 9: Tax Aspects of the Certificates." For the consequences of making a "regular" IRA contribution to your Certificate, also see Part 9. 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. 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. 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 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. [/R] 24 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 the initial contribution is subject to the provisions for the free look period. See "Free Look Period" below. Allocation of any contribution to the Guaranteed Period Account is subject to the following restrictions: o If you are between ages 71 through 74 (inclusive), allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which you will attain age 80. At ages 75 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 Annuity Commencement Date. Principal Assurance This option 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 may not be later than 10 years nor earlier than seven years. However, in no event may you elect a year beyond the year in which you will attain age 70 1/2 . 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 4. 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. Allocation of the portion of your initial contribution to the Investment Funds is subject to the provisions for the free look period. See "Free Look Period" below. 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 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. In those states that require that we calculate the refund differently, we may require that your initial contribution to the Investment Funds be allocated to the Money Market Fund until the end of the free look period. If the IRA Assured Payment Option or IRA Assured Payment Option Plus is in effect at issue of the Certificate, your refund will include any amount applied under the Life Contingent Annuity. See "Life Contingent Annuity" in Part 6. We follow these same procedures if you change your mind before a Certificate has been issued, but after a contribution has been made. See "Part 9: 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 The Annuity Account Value is the sum of the Annuity Account Values in the Investment Funds and the Guaranteed Period Account. 25 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 the Trust, which in turn reflects the investment income and realized and unrealized capital gains and losses of the Portfolios, as well as the Trust 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. Accumulation Unit Values The Accumulation Unit Value for each Investment Fund will be set at $10.00 on the date each Fund receives initial funds. For each subsequent Valuation Period, the Accumulation Unit Value will be the Accumulation Unit Value for the immediately preceding Valuation Period multiplied by the net investment factor for that subsequent Valuation Period. For information on the net investment factor, see "Part 2--Accumulation Unit Values" 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 4: 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 No transfers are permitted to or from the Guaranteed Period Account during the first Contract Year and only one transfer per Contract Year may be made thereafter. o The amount transferred to or from the Guaranteed Period Account must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from the Guaranteed Period Account. Similarly, the entire Annuity Account Value in the Investment Funds may be transferred to the Guaranteed Period Account. o Transfers out of the Guaranteed Period Account other than at the Expiration Date will result in a market value adjustment. See "Part 4: The Guaranteed Period Account." o Transfers to Guarantee Periods are subject to the restrictions set forth under "Guarantee Periods and Expiration Dates" in Part 4 and are limited based on your attained age. 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. 26 DOLLAR COST AVERAGING If you have at least $10,000 of Annuity Account Value in the Money Market Fund, you may choose to have a specified dollar amount transferred from the Money Market Fund to other Investment Funds on a monthly basis. 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 dollar cost averaging option may be elected at the time you apply for the Certificate or at a later date. The minimum amount that may be transferred each month 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 12. The transfer date will be the same calendar day each 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. 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 guaranteed minimum death benefit defined below; and (2)the death benefit provided with respect to the Guaranteed Period Account. See "Part 4: The Guaranteed Period Account." Guaranteed Minimum Death Benefit (GMDB) Applicable to Certificates issued in all states except ----------------------------------------------------------------------------- New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, see (1) below), the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see (2) below) is credited to and becomes part of the GMDB on each Processing Date. (1) At the end of the seventh Contract Year, the GMDB calculated on such date will be set at the then GMDB determined above or, if greater, the current Annuity Account Value in the Investment Funds. (2) Interest will be calculated at the effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on the lesser of the applicable interest rate above and the actual rate of return for the Money Market Fund for the Contract Year such amounts are invested. Contributions, transfers and withdrawals will be taken into account. The above applicable GMDB interest rate will be reduced once subsequent contributions exceed certain levels as explained in (3) below. (3) Depending on the Annuitant's issue age, the GMDB interest rate may be reduced based on the ratio of total contributions made after a specified age to net contributions* made prior to that age. The specified ages and ratios are shown in the table below; the interest rate is shown in the applicable ratio column.
REDUCED GMDB INTEREST RATES RATIO OF CONTRIBUTIONS ON OR AFTER THE SPECIFIED AGE TO NET CONTRIBUTIONS* BEFORE THE SPECIFIED AGE --------------------- 100% MORE SPECIFIED THROUGH THAN ISSUE AGE AGE 250% 250% ------------ ------------- ----------- -------- 0-69 70 3% 0% 70-74 75 0% 0% 75+ N/A 0% 0% There is no reduction in the GMDB interest rate if the ratio is less than 100%. *Net contributions are determined on the Processing Date after the Annuitant reaches the specified age and are defined as cumulative contributions made prior to the specified age, minus cumulative withdrawals made prior to the specified age. --------------------------------------------------
27 Applicable to Certificates issued in New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, in accordance with (1) above) the GMDB is equal to (a) the GMDB calculated on the immediately preceding Business Day, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. Additionally, on each Processing Date the GMDB is reset at the greater of the current GMDB and the current Annuity Account Value in the Investment Funds. On no date (except possibly at the end of the seventh Contract Year), however, will the GMDB be greater than (a) the portion of the initial contribution allocated to the Investment Funds, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds plus (d) interest (in accordance with (2) above) that is credited on each Processing Date. See Appendix II for an example of the calculation of the GMDB. How Withdrawals and Transfers Affect the GMDB Whenever a withdrawal or transfer from the Investment Funds is made, the GMDB is immediately reduced by the amount of the withdrawal or transfer. In addition, a "special adjustment" will be made to the GMDB on the next Processing Date to realign the GMDB with the Annuity Account Value. The special adjustment will be made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the Contract Year) and "GMDB contributions." GMDB contributions are equal to the sum of all contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB contributions are not reduced by withdrawals or transfers from the Investment Funds. See Appendix III for a further discussion and an example of the special adjustment. 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 6. 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. GUARANTEED MINIMUM INCOME BENEFIT When you elect the IRA Assured Payment Option on one of the dates indicated below, the Guaranteed Minimum Income Benefit (GMIB) provides a minimum guaranteed lifetime income (assuming no Lump Sum Withdrawals) from application of an amount to the IRA Assured Payment Option. See "IRA Assured Payment Option" in Part 6. On the Transaction Date the minimum guaranteed lifetime income to be provided will be based on the amount of the GMDB (described above) determined without regard to the seventh Contract Year reset applied at guaranteed maximum purchase rates under the Certificate. The guaranteed maximum purchase rates are based on interest of 3% and expected mortality based on the 1983 Individual Annuity Mortality Table "a" projected with Scale G. However, if the Annuity Account Value in the Investment Funds applied at then current Guaranteed Rates for the Guarantee Periods and the then current purchase rate for the Life Contingent Annuity would result in higher payments under the IRA Assured Payment Option, then the higher payments will be provided. If you have any Annuity Account Value in the Guaranteed Period Account as of the Transaction Date, such Annuity Account Value will also be applied under the IRA Assured Payment Option. A market value adjustment may apply. The GMIB applies if your election of the IRA Assured Payment Option meets the following conditions: o The maximum fixed period you elect under the IRA Assured Payment Option is 9 years if you elect increasing payments, and 10 years if you elect level payments. o The IRA Assured Payment Option is elected on any one of the Contract Date anniversaries during Contract Years 7 through 15. However, if you make subsequent contributions before the IRA Assured Payment Option goes into effect, at any time that the sum of subsequent contribu- 28 tions made after the first Contract Year exceeds total contributions made during the first Contract Year, the period during which the GMIB applies will change. The GMIB will then be applicable on one of the Contract Date anniversaries during the 7th through 15th Contract Year following the Contract Year in which the excess occurred. Each year, at least 45 days before your Contract Date anniversary, if you are eligible to elect the IRA Assured Payment Option, we will send you a quote indicating how much future income could be provided under such Option. The quote will be based on either the GMIB (using the GMDB as of the date of the quote) or your current Annuity Account Value, at current Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity as of the date of the quote. You then notify us if you want to elect the IRA Assured Payment Option by submitting the proper form. Your request must be received at our Processing Office at least seven days before the Contract Date anniversary. The GMDB, which relates to the Investment Funds, will no longer be in affect 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 the GMDB will go back into effect based on your Annuity Account Value in the Investment Funds. However, the GMIB will not apply. See Appendix IV for an example of the GMIB option. 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 4: 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: (1) the Annuity Account Value; (2) less any withdrawal charge; and (3) less any annual contract fee incurred but not yet deducted. The free corridor amount will not apply when calculating the withdrawal charge applicable upon a surrender. See "Part 7: 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 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. For the tax consequences of surrenders, see "Part 9: 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. 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 transferrable except through surrender to us. They may not be borrowed against or used as collateral for a loan or other obligation. 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 29 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 787 Seventh Avenue, New York, New York 10019. The Certificates will be sold by registered representatives of EDI and its affiliates, who are also our licensed insurance agents, as well as by unaffiliated broker-dealers with which EDI has entered into selling agreements. Broker- dealer sales compensation (including for EDI and its affiliates) will 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. 30 ------------------------------------------------------------------------------- PART 6: DISTRIBUTION METHODS UNDER THE CERTIFICATES ------------------------------------------------------------------------------- The provisions discussed in this Part 6 apply when you elect a distribution method under your Certificate. The INCOME MANAGER IRA Certificates offer several distribution methods specifically designed to provide retirement income. In addition to the IRA Assured Payment Option and the Assured Payment Option Plus, the Certificates provide for Lump Sum Withdrawals, Minimum Distribution Withdrawals, and Substantially Equal Payment Withdrawals. Fixed and variable income annuity options are also available for amounts to be applied at the Annuity Commencement Date. 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 9: 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 annual 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. Initially you receive annual payments during a fixed period you select. These payments represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. See "Guarantee Periods" in Part 4. These payments are designed to pay out the entire Annuity Account Value by the end of the fixed period (described below) 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. After the fixed period, the annual payments are made under the Life Contingent Annuity described below. See Appendix V for an example of payments purchased under an IRA Assured Payment Option. You may elect the IRA Assured Payment Option at any time if your contribution or Annuity Account Value is at least $25,000 at the time of election, by submitting a written request satisfactory to us. The IRA Assured Payment Option may be elected if you are between 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 Assured Payment Option Plus" in Part 9. It may also be elected as young as age 54 1/2 provided payments do not start before you attain age 59 1/2 . Once elected, all amounts currently held under your Rollover IRA must be allocated to the Guarantee Periods and the Life Contingent Annuity. See "Allocation of Contributions or Annuity Account Value" below. Additional contributions may be made according to the rules set forth below and in "Tax-Free Transfers and Rollovers" in Part 9. Contributions under the IRA Assured Payment Option "Regular" IRA contributions may no longer be made for the taxable year in which you attain age 70 1/2 and thereafter. If the IRA Assured Payment Option is elected at any time before you attain age 79, rollover and direct transfer contributions may be made at any time before you attain age 79. If the IRA Assured Payment Option is elected at any time between the attained ages of 79 and 83, rollover and direct transfer contributions may be made at any time before you attain age 84. 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. Payments You may elect to receive level annual 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. After the end of the fixed period, your first payment under the Life Contingent Annuity is 31 designed to be 10% greater than the final payment made under the fixed period. Thereafter, payments under the Life Contingent Annuity will increase annually based on the increase in the Consumer Price Index, but in no event will an annual increase be greater than 3% in any given year or less than 0%. Payments will generally start within 13 months from the date the IRA Assured Payment Option is elected. However, if you elect level payments, you may elect to defer receiving these payments for up to five years.* If you choose to receive increasing payments you may only elect to defer your payment start date for three years.* Payments are made on February 15th of each calendar year. 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 9. *Ability to defer the payment start date may not be available in all states. 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, an additional amount will be withdrawn and will be treated as a Lump Sum Withdrawal; however, no withdrawal charge will apply. An adjustment will be made to future scheduled payments. See "Lump Sum Withdrawals" below and "Required Minimum Distributions" in Part 9. Fixed Period If you elect level payments, you may elect a fixed period of not less than seven years nor more than 15 years. If you elect increasing payments, you may elect a fixed period of six, nine, 12 or 15 years. For Annuitants age 71 through 78 the maximum fixed period is 85 less the issue age. For Annuitant ages 79 through 83, only a seven year fixed period is permitted for level payments and a six year fixed period for increasing payments. The minimum and maximum fixed period permitted will be reduced by each year you defer the date payments will start. If amounts are applied to the IRA Assured Payment Option as a result of the GMIB discussed in Part 5, the maximum fixed period is 9 years for increasing payments and 10 years for level payments. See "Guaranteed Minimum Income Benefit" in Part 5. Allocation of Contributions or Annuity Account Value If the IRA Assured Payment Option is elected at issue of the Rollover IRA Certificate, 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 form of payments and the fixed period you select, your entire contribution will be allocated by us. A portion of such contribution will be allocated among the Guarantee Periods to provide fixed period payments and a portion will be applied under the Life Contingent Annuity in order to provide the annual payments for life. If the IRA Assured Payment Option is elected any time after issue of the Certificate, 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 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. 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 annual 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. 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 32 elect increasing payments, the payments will increase annually based on the increase in the Consumer Price Index, but in no event greater than 3% per year nor less than 0%. 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 annually during your lifetime (and the lifetime of the joint Annuitant, if applicable) on the same date of the year 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) 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 9. 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 Sum Withdrawal is made to satisfy minimum distribution requirements), such withdrawals will be taken from all Guarantee Periods to which your Annuity Account Value is allocated such that the amount of the annual 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 may be withdrawn from the Guarantee Periods and applied to the Life Contingent Annuity to the extent necessary to achieve this result. After a withdrawal, 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. Minimum Distribution Withdrawals and Substantially Equal Payment Withdrawals may not be elected while the IRA Assured Payment Option is in effect. See "Minimum Distribution Withdrawals," and "Substantially Equal Payment 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 5, 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 5, 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 "Withdrawals" 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 distribution must continue to be made with respect to your Certificate. If you elected the IRA Assured Payment Option at age 79 or above and subsequently terminate this Option, annuity payments must commence no later than the calendar year in which you attain age 90. Before terminating the IRA Assured Payment Option, you should consider the implications this may 33 have under the minimum distribution requirements. See "Tax Considerations for the IRA Assured Payment Option and Assured Payment Option Plus" in Part 9. 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 5, 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, Lump Sum Withdrawals will be subject to a withdrawal charge and will not have a free corridor. Upon termination of the IRA Assured Payment Option, the free corridor will apply as described under "Withdrawal Charge" in Part 7. IRA ASSURED PAYMENT OPTION PLUS The IRA Assured Payment Option Plus (APO Plus) is a variation of the IRA Assured Payment Option. Except as indicated below, all provisions of the IRA Assured Payment Option apply to the APO Plus. The APO Plus enables you to keep a portion of your Annuity Account Value in the Investment Funds while systematically converting such Annuity Account Value into guaranteed lifetime income under the IRA Assured Payment Option. When you elect APO Plus, a portion of your Annuity Account Value 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 Life Contingent Annuity, and the remaining Annuity Account Value remains in the Investment Funds. Two years from the date the first payment is made and then every three years thereafter during the fixed period, a portion of the remaining Annuity Account Value in the Investment Funds is applied to increase the guaranteed level annual payments under the IRA Assured Payment Option. 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. You elect the APO Plus by submitting the proper form. The amount applied under the APO Plus is either the initial contribution if APO Plus is elected at issue of the Certificate, or the Annuity Account Value if APO Plus is elected after issue of the Certificate. Out of a portion of this amount, level annual 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 Transaction Date immediately following each third payment 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 payments under the IRA Assured Payment Option. The amount applied is the amount which provides for level payments equal to the intial 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. 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 provide 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 will be increased to the extent possible. While 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 34 Guaranteed Rates and the cost of the Life Contingent Annuity, which may vary. Consequently, the aggregate amount of guaranteed lifetime income under the APO Plus may be more or less than the amount that could have been purchased by application at the outset of the entire intial contribution or Annuity Account Value to the IRA Assured Payment Option. See Appendix V for an example of the payments purchased under the IRA Assured Payment Option and the APO Plus. In calculating your required minimum distributions (as described under "Payments" above) your Annuity Account Value in the Investment Funds, the Annuity Account Value in each Guarantee Period and the deemed value of the Life Contingent Annuity for tax purposes will be taken into account. See "Required Minimum Distributions" in Part 9. Allocation of Subsequent Contributions under the 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 Options 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 the APO Plus While the 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 APO Plus While 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), 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 as described under "Withdrawals under the IRA Assured Payment Option" above. Death Benefit Once you have elected 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 5, 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 the APO Plus You may terminate the APO Plus at any time. In connection with the termination, you may either (i) elect to terminate the APO Plus at any time and have your Certificate operate under the Rollover IRA rules (see "Part 5: Provisions of the Certificates and Services We Provide'') or (ii) elect the IRA Assured Payment Option with level or increasing payments. In the latter case your remaining Annuity Account Value in the Investment Funds will be allocated to the Guarantee Periods and applied under the Life Contingent Annuity. A market value adjustment may apply. 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. WITHDRAWALS 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. Three withdrawal options are available: Lump Sum Withdrawals, Minimum Distribution Withdrawals and Substantially Equal Payment Withdrawals. Withdrawals may result in withdrawal charges. "See Part 7: Deductions and Charges." Special withdrawal rules may apply under the IRA Assured Payment Option and 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 Withdrawals, Transfers or Surrender Prior to the Expiration Date" in Part 4. Withdrawals may be taxable and subject to tax penalty. See "Part 9: 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 35 the amount distributed. These rules are outlined in "Part 9: Tax Aspects of the Certificates." LUMP SUM WITHDRAWALS After the first Contract Year, you may take a Lump Sum Withdrawal once per Contract Year at any time during such Contract Year. The minimum amount of such withdrawal is $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," in Part 5. Unless you are also utilizing Minimum Distribution Withdrawals described below, the limitation on your ability to take more than one Lump Sum Withdrawal per Contract Year should be discussed with your tax adviser. This limitation may affect your ability to meet minimum distribution requirements in the initial year in which you are required by the Code to begin taking minimum distributions. 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 5. 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. See "Withdrawal Charge" in Part 7. 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 7. 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 7.5% Rate of Return
Amount Age Withdrawn --- --------- 70 $ 6,250 75 8,250 80 10,088 85 11,048 90 9,489 95 5,579 100 1,950
[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 7.5% 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. SUBSTANTIALLY EQUAL PAYMENT WITHDRAWALS Substantially Equal Payment Withdrawals provide distributions from the Annuity Account Value of the 36 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 9. 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 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 the 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. 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 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 85th birthday unless the IRA Assured Payment Option or APO Plus is in effect. 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 4. 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. 37 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 Common Stock Fund through the purchase of annuity units. The amount of each variable annuity payment may fluctuate, depending upon the performance of the Common Stock Fund. 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 Common Stock or other 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. 38 ------------------------------------------------------------------------------- PART 7: 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 exceeds the free corridor amount, or (ii) a Minimum Distribution Withdrawal, when added to a Lump Sum Withdrawal previously taken in the same Contract Year, exceeds the free corridor amount, and (iii) 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 Lump Sum 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 Withdrawal Amount (Free Corridor) No withdrawal charge will be applied during any Contract Year in which (i) the amount of a Lump Sum Withdrawal does not exceed 15% of the Annuity Account Value at the beginning of the Contract Year minus any amount previously withdrawn during that Contract Year; (ii) a Minimum Distribution Withdrawal does not exceed 15% of the Annuity Account Value at the beginning of the Contract Year minus a Lump Sum Withdrawal previously withdrawn during the Contract Year; or (iii) a Minimum Distribution Withdrawal is the only withdrawal taken during a Contract Year. The 15% maximum is called the free corridor amount. The 15% free corridor amount is not applicable to a surrender or to certain Lump Sum Withdrawal while the IRA Assured Payment Option is in effect. 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. Transfer Charge Currently there is no charge for transfers. We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. Guaranteed Minimum Death Benefit Charge We deduct a charge for providing a minimum death benefit guarantee with respect to the Investment Funds annually on each Processing Date. The charge is equal to 0.35% of the GMDB in effect at such Processing Date. This charge also covers the Guaranteed Minimum Income Benefit. If the amount collected from this charge exceeds the cost of providing the benefits, it will be to our profit, and may be used to pay distribution expenses not recovered from sales charges under the Certificates. Annual Contract Fee The annual contract fee is incurred at the beginning of the Contract Year and deducted at the end of each Contract Year on the Processing Date. We deduct this charge when determining the Cash Value payable if you surrender the Certificate prior to the end of a Contract Year. The amount deducted is determined by the amount of your initial contribution. The charge will be $30 per Contract Year if your initial contribution is less than $25,000, and zero if your initial contribution equals $25,000 or more. This charge is to cover a portion of our administrative expenses. See "Asset Based Administrative Charge," below under "Charges Deducted from the Investment Funds." 39 Premium Taxes Generally, we deduct any applicable charges for state and local taxes from the amount applied to provide an income annuity option if you elect to annuitize. In certain states, however, we may deduct the charge for taxes from contributions rather than at the Annuity Commencement Date. The current premium tax charge that might be imposed varies by state and ranges from 0% to 2.25%. Allocation of Certain Charges to the Guaranteed Period Account No portion of the annual contract fee will be allocated to the Guaranteed Period Account unless there is insufficient value in the Investment Funds. If this charge is allocated to the Guaranteed Period Account, it will be allocated to the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. If charges are allocated to the Guaranteed Period Account, you will not receive the full Guaranteed Rate if held to the Expiration Date. See "Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date" in Part 4. CHARGES DEDUCTED FROM THE INVESTMENT FUNDS Mortality and Expense Risk 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 the guaranteed minimum death benefit charge is insufficient to pay any amount by which such death benefit 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. Asset Based Administrative Charge We will deduct a daily charge from the assets in each Investment Fund, to compensate us for administrative 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. The annual contract fee and the asset based administrative charge is not designed to produce a profit for Equitable Life. TRUST CHARGES TO PORTFOLIOS Investment advisory fees charged daily against the Trust's assets, direct operating expenses of the Trust (such as trustees' fees, expenses of independent auditors and legal counsel, bank and custodian charges and liability insurance), and certain investment-related expenses of the 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:
DAILY AVERAGE NET ASSETS ------------------------------------- FIRST $350 NEXT $400 OVER $750 MILLION MILLION MILLION ----------- ----------- ----------- ASSET ALLOCATION SERIES: Conservative Investors ... .550% .525% .500% Growth Investors .......... .550% .525% .500% EQUITY SERIES: Common Stock .............. .400% .375% .350% Global .................... .550% .525% .500% Aggressive Stock .......... .500% .475% .450% FIXED INCOME SERIES: Money Market .............. .400% .375% .350% Intermediate Govt. Securities ................ .500% .475% .450%
FIRST NEXT OVER $750 $500 $1 MILLION MILLION BILLION ---------- ---------- --------- EQUITY SERIES: Growth & Income ........ .550% .525% .500%
FIRST NEXT OVER $750 $750 $1.5 MILLION MILLION BILLION ----------- ----------- ----------- EQUITY SERIES: Equity Index ........... .350% .300% .250%
FIRST $500 NEXT $1 OVER $1.5 MILLION BILLION BILLION ----------- ----------- ----------- EQUITY SERIES: International .......... .900% .850% .800%
Investment advisory fees are established under the Trust's investment advisory agreements between the Trust and its investment adviser, Alliance. All of these fees and expenses are described more fully in the Trust prospectus. 40 SPONSORED ARRANGEMENTS For certain sponsored arrangements, we may reduce the annual contract fee and the withdrawal charge or change the minimum initial contribution requirements. Under the IRA Assured Payment Option and 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. 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 or annual contract fee 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. 41 ------------------------------------------------------------------------------- PART 8: VOTING RIGHTS ------------------------------------------------------------------------------- TRUST VOTING RIGHTS As explained previously, contributions allocated to the Investment Funds are invested in shares of the corresponding Portfolios of the Trust. Since we own the assets of the Separate Account, we are the legal owner of the shares and, as such, have the right to vote on certain matters. Among other things, we may vote: o to elect the Trust's Board of Trustees, o to ratify the selection of independent auditors for the Trust, and o on any other matters described in the Trust's current prospectus or requiring a vote by shareholders under the 1940 Act. Because the Trust is a Massachusetts 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 Trust share 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 the Trust. 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. The Trust's Board of Trustees intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the 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 the Common Stock Fund divided by the Accumulation Unit Value for the Common Stock 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 ------------------------------------------------------------------------------- PART 9: 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. Cancellation You can cancel a Certificate issued as an IRA by following the directions in Part 5 under "Free Look Period." Since there may be adverse tax consequences if a Certificate is cancelled (and because we are required to report to the IRS certain distributions from cancelled 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 The Code permits a working individual to make deductible or nondeductible contributions to a contract or certificate that qualifies as an IRA. The Code also allows tax-free rollovers (directly or otherwise) of certain distributions from tax-qualified plans which are used to purchase an IRA. 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 5. 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 the applicable amount. These limits do not apply to rollover contributions or direct custodian-to-custodian transfers into an IRA. 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. If the 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. 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. 43 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:
Adjusted Maximum Dollar $10,000-Excess AGI Permissible Deduction $10,000 X Dollar Deduction = Limit
Under the second method, the individual determines his or her Excess AGI and then refers to the table in Appendix VI 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 44 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 The Rollover IRA will accept a rollover from an individual retirement account or retirement bond or another IRA that consists of amounts which were accumulated from previous individual retirement accounts or IRA contributions (and any earnings thereon) and amounts derived from eligible rollover distributions from qualified plans or TSAs (and any earnings thereon). 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. The taxable portion of any distribution (except for any required minimum distribution under Section 401(a)(9) of the Code) 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 one of a series of substantially equal periodic payments made (not less frequently than annually) (1) 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 (2) 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 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. 45 In addition, a distribution (other than a required minimum distribution received after age 70 1/2 ) is not 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 Distributions from IRAs generally must commence no later than April 1st of the calendar year following the calendar year in which the individual attains age 70 1/2 (Required Beginning Date). Subsequent distributions must be made by December 31st of each calendar year. Distributions can generally be made (1) in a lump sum payment, (2) over the life of the individual, (3) over the joint lives of the individual and his or her designated beneficiary, (4) over a period not extending beyond the life expectancy of the individual or (5) over a period not extending beyond the joint life expectancies of the individual and his or her designated beneficiary. The minimum amount required to be distributed in each year after age 70 1/2 is described in the Code and Treasury regulations. 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. 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. 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. If an individual dies before the Required Beginning Date and before distributions in the form of an 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. Taxation of Death Benefits 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. 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. 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. 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 46 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 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 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 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 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 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 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, or (3) on or after the date when you reach age 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 designed Substantially Equal Payment Withdrawals described in Part 6. 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 Substantially Equal Payment Withdrawals, 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 47 Equal Payment Withdrawals are not subject to the 10% penalty tax, they are taxable as discussed in "Distributions from IRA Certificates," above. Once Substantially Equal Payment Withdrawals 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. 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 for purposes of determining whether the penalty applies. TAX PENALTY FOR INSUFFICIENT DISTRIBUTIONS You must begin receiving minimum distributions from an IRA no later than April 1st of the calendar year following the calendar year in which you attain age 70 1/2 . Once distributions begin, subsequent distributions must be made by December 31st of each calendar year. Failure to make required 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 are not permitted to 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. 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 ($150,000 in 1995). In addition, in certain cases the estate tax imposed on a deceased individual's estate will be increased if 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. A recipient of periodic payments (e.g., monthly or annual payments) which total less than a certain Federal minimum ($13,900 taxable amount per year for 1995) will generally be exempt from the Federal income tax withholding rules, unless the recipient elects to have tax withheld. A recipient of periodic payments which equal or exceed the Federal minimum ($13,900 taxable amount for 1995) will generally be 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. A withholding election may be revoked at any time and remains effective until revoked. 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. 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 48 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. GENERATION SKIPPING TAX 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. 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. 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. 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. 49 ------------------------------------------------------------------------------- PART 10: INDEPENDENT ACCOUNTANTS ------------------------------------------------------------------------------- The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the years ended December 31, 1994 and 1993 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. The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the year ended December 31, 1992 included in Equitable Life's Annual Report on Form 10-K, incorporated by reference in the prospectus, have been examined by Deloitte & Touche 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 Deloitte & Touche LLP given upon their authority as experts in accounting and auditing. 50 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, 1996 to a Guarantee Period with an Expiration Date of February 15, 2005 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, 2000.
ASSUMED GUARANTEED RATE ON FEBRUARY 15, 2000 ---------------------- 5.00% 9.00% ---------- ---------- As of February 15, 2000 (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, 2000 (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 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE ----------------------------------------------------------------------------- Under the Certificate the death benefit is equal to the sum of: (1) the Annuity Account Value in the Investment Funds, or, if greater, the GMDB (see "Guaranteed Minimum Death Benefit (GMDB)" in Part 5; and (2) the death benefit provided with respect to the Guaranteed Period Account (see "Death Benefit Amount" in Part 4). 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 Money Market Fund or the Intermediate Government Securities Fund), no subsequent contributions, no transfers and no withdrawals, the GMDB for an Annuitant age 45 would be calculated as follows:
END OF CONTRACT ANNUITY ACCOUNT NON-NEW YORK YEAR VALUE GMDB NEW YORK GMDB ---------- --------------- -------------- ------------- 1 $105,000 $106,000(1) $105,000(4) 2 $108,675 $112,360(1) $108,675(4) 3 $124,976 $119,102(1) $119,102(5) 4 $135,912 $126,248(1) $126,248(5) 5 $149,503 $133,823(1) $133,823(5) 6 $149,503 $141,852(1) $141,852(5) 7 $161,463 $161,463(2) $161,463(5) 8 $161,463 $171,151(3) $161,463(4)
The Annuity Account Values for Contract Years 1 through 8 are determined based on hypothetical rates of return of 5.00%, 3.50%, 15.00%, 8.75%, 10.00%, 0.00%, 8.00% and 0.00%, respectively. NON-NEW YORK (1) For Contract Years 1 through 6, the GMDB equals the initial contribution increased by 6%. (2) At the end of the seventh Contract Year the GMDB calculated on the 6% increase basis on that date of $150,363 is reset to the Annuity Account Value of $161,463 since that amount is greater. (3) Equals the prior GMDB of $161,463 increased by 6%. NEW YORK (4) At the end of Contract Years 1 and 2, and again at the end of Contract Year 8, the GMDB is equal to the Annuity Account Value. (5) At the end of Contract Years 3, 4, 5 and 6, the GMDB is equal to the contributions increased by 6% instead of the Annuity Account Value, since the GMDB cannot be greater than this amount. However, at the end of the seventh Contract Year the GMDB is equal to the Annuity Account Value of $161,463 even though it is greater than the contributions increased at 6% ($150,363) due to the end of the seventh Contract Year reset. 52 APPENDIX III: GMDB SPECIAL ADJUSTMENT ----------------------------------------------------------------------------- A special adjustment is made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year) and "GMDB contributions." GMDB contributions are equal to the sum of all contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB contributions are not reduced by withdrawals or transfers from the Investment Funds. The special adjustment will be equal to: (A) x (B) - (C): Where: (A) equals the GMDB (before the special adjustment and reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year), (B) equals (i)/(ii); where (i) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year, and (ii) equals the Annuity Account Value (plus any withdrawals and transfers from the Investment Funds during the prior Contract Year), and (C) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year. Example: The following illustrates how a withdrawal would affect the non-New York GMDB under a Certificate, assuming an initial contribution of $100,000, an Annuity Account Value of $120,000 (with no allocation to the Money Market Fund or the Intermediate Government Securities Fund) at the end of the fourth year and a GMDB of $126,248 at the end of the fourth year. If no withdrawals or transfers were to be made in the fifth year, the end of fifth year GMDB would be $133,823. If a $60,000 withdrawal was made at the end of the fifth year and a 0% return had been earned in the fifth year, the special adjustment would be calculated using the above formula as follows: (A) = $133,823 (B) = (i)/(ii) = $60,000/$120,000 = .5 (C) = $60,000 (A) X (B) - (C) = [($133,823 X .5) - $60,000] = $6,911. The end of fifth year GMDB would equal $133,823 - $60,000 - $6,911 = $66,912. The special adjustment was necessary in this case because (i) the end of fifth year Annuity Account Value was less than the GMDB at the end of the fifth year and (ii) the withdrawal of $60,000 was an amount greater than the difference between the end of the fifth year GMDB (before reduction for the withdrawal) and the GMDB contributions. In this case, that difference was $33,823 ($133,823 - $100,000). 53 APPENDIX IV: GMIB EXAMPLE ----------------------------------------------------------------------------- This example assumes a male age 60 has purchased the Rollover IRA and decides to elect the IRA Assured Payment Option with level payments in the 10th Contract Year. The example assumes that he purchased the Certificate with a single contribution of $100,000 that was allocated 100% to the Investment Funds for the entire period before the IRA Assured Payment Option was elected. It also assumes that the Fixed Period under the IRA Assured Payment Option is 10 years and a Single Life form of the Life Contingent Annuity is elected. The GMDB in the 10th Contract Year is $179,085 (at 6% interest without the seventh Contract Year reset). By applying this amount to the guaranteed maximum purchase rates, the payments under the IRA Assured Payment Option would be $13,518 annually. This is the GMIB. If higher payments would be provided under the IRA Assured Payment Option by applying the Annuity Account Value as of the Transaction Date to the then current Guaranteed Rates for each Guarantee Periods and the then current purchase rate for the Life Contingent Annuity, the higher payments would be provided. The Annuity Account Value will depend on the performance of the Investment Funds. The following table illustrates, the IRA Assured Payment Option payments that would be provided by the Annuity Account Value assuming various hypothetical rates of return (after deduction of charges) in the Investment Funds, various percentages of the purchase price of the Guaranteed Rates for the applicable Guarantee Periods and the purchase rate for the Life Contingent Annuity as of February 15, 1995. The illustration also assumes that these rates are in effect in the 10th Contract Year. See "Guaranteed Rates and Price Per $100 of Maturity Value" in Part 4.
IRA ASSURED PAYMENT OPTION PAYMENTS BASED ON RATES AS A PERCENTAGE OF THE GUARANTEED RATES AND THE LIFE CONTINGENT RATE OF RETURN ANNUITY PURCHASE RATE AS OF FOR THE FEBRUARY 15, 1995 INVESTMENT FUNDS ------------------------------ 80% 100% 120% ---------------- --------- -------- ------- 0% $12,439 $ 9,951 $ 8,293 4% 18,413 14,730 12,275 8% 26,854 21,483 17,903
In the example at the 0% rate of return, an amount equal to the GMDB without the seventh Contract Year reset ($179,085) would be used to purchase the annual payments because this amount, applied at guaranteed maximum purchase rates, produces annual payments of $13,518, which is larger than any of the illustrated payment levels based on current rates. At the 4% rate of return, the annual payments would depend on the current Guarantee Rates and purchase rates for the Life Contingent Annuity. If such rates were 120% of the February 15, 1995 rates, again the annual payments would be the GMIB. Otherwise, the Annuity Account Value would be used to provide the payments. At the 8% rate of return, the Annuity Account Value would provide the annual payments since these amounts applied at assumed current Guaranteed Rates for the Guarantee Periods and the current assumed purchase rate for the Life Contingent Annuity produce higher annual payments under the IRA Assured Payment Option of $26,854, $21,483 and $17,903 respectively. The rates of return shown above are for illustrative purposes only and are not intended to represent an expected or guaranteed rate of return. Your investment results will vary. Payments under the IRA Assured Payment Option in excess of those guaranteed by the GMIB will also depend on the Guaranteed Rates and purchase rates under the Life Contingent Annuity as of the Transaction Date, which may vary. The example assumes no transfers or Lump Sum Withdrawals, which would affect the scheduled payments. 54 APPENDIX V: EXAMPLE OF PAYMENTS UNDER THE IRA ASSURED PAYMENT OPTION AND 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 February 15, 1995 with a single contribution of $100,000, with increasing payments. The payments are to commence on February 15, 1996. 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 current purchase rates for the Life Contingent Annuity, on February 15, 1995, the initial payment would be $7,417 and would increase in each three year period to a final payment of $10,859. The first payment under the Life Contingent Annuity would be $11,945. Alternatively as shown in the third and fourth columns, this individual could purchase the 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 current purchase rates for the Life Contingent Annuity, on February 15, 1995, the same initial payment of $7,417 would be purchased under the APO Plus. However, unlike the payment under the IRA Assured Payment Option that will increase every three years, this initial payment under the APO Plus is not guaranteed to increase. Therefore, only $79,531 is needed to purchase the initial payment stream, and the remaining $20,469 is invested in the Investment Funds according to the Contract Owner's instructions. Any future increase in payments under the 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 $20,469 and $25,785 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 February 15, 1995, the third and fourth columns illustrate the increasing payments that would be purchased under the APO Plus assuming 0% and 8% rates of return respectively. Under both options, while the Contract Owner is living payments increase annually after the 16th year under the Life Contingent Annuity based on the increase in the Consumer Price Index, but in no event greater than 3% per year nor less than 0%. ANNUAL PAYMENTS
GUARANTEED INCREASING PAYMENTS ILLUSTRATIVE ILLUSTRATIVE UNDER THE IRA ASSURED PAYMENT PAYMENTS UNDER PAYMENTS UNDER YEARS OPTION APO PLUS AT 0% APO PLUS AT 8% ------- ------------------------------ -------------- -------------- 1-3 $ 7,417 $7,417 $ 7,417 4-6 8,158 7,800 8,158 7-9 8,974 8,198 8,247 10-12 9,872 8,595 9,112 13-15 10,859 8,953 9,991 16 11,945 9,212 10,838
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 the APO Plus, and conversely a smaller portion of the contribution will be allocated to Guarantee Periods and Investment Funds under the former than the latter. In this illustration, $81,084 is allocated under the IRA Assured Payment Option to the Guarantee Periods and the Investment Funds, and under the APO Plus, $89,380 is allocated to the Guarantee Periods and the Investment Funds. The balance of the $100,000 ($18,916 and $10,620, 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. 55 APPENDIX VI: 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.
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION ------------ ----------- ------------ ----------- ------------ ----------- ------------ ----------- $ 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 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.
56 ------------------------------------------------------------------------------ STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS ------------------------------------------------------------------------------
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
HOW TO OBTAIN A ROLLOVER IRA STATEMENT OF ADDITIONAL INFORMATION 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 57 INCOME MANAGERSM ACCUMULATOR PROSPECTUS DATED OCTOBER , 1995 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 $10,000 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 10 variable investment funds (INVESTMENT FUNDS) and each Guarantee Period (GUARANTEE PERIOD) in the Guaranteed Period Account.
Investment Funds -------------------------------------------------------------------------- Guarantee Periods Asset Allocation Series: Equity Series: Fixed Income Series: Expiration Dates: ---------------------------- ---------------------- -------------------- ------------------- o Conservative Investors o Growth & Income o Money Market February 15, o Growth Investors o Equity Index o Intermediate o 1996 through 2005* o Common Stock Government o Global Securities o International o Aggressive Stock ------------ * On , 1995 a Guarantee Period with an Expiration Date of February 15, 2006 will become available in most states. On January 1, 1996 the Guarantee Period expiring on February 15, 1996 will no longer be available for new allocations.
We invest each Investment Fund in shares of a corresponding portfolio (PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are purchased by separate accounts of insurance companies. The prospectus for the Trust, which accompanies this prospectus, describes the investment objectives, policies and risks of the Portfolios. 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. You may choose from a variety of payout options, including 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 a current prospectus for the Trust, 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 October , 1995, 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 1995 The Equitable Life Assurance Society of the United States, New York, New York 10019. All rights reserved. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1994 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 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, 787 Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary (telephone: (212) 554-1234). 2 PROSPECTUS TABLE OF CONTENTS
GENERAL TERMS PAGE 4 FEE TABLE PAGE 5 PART 1: SUMMARY PAGE 8 What is the Accumulator? 8 Investment Options 8 Contributions 8 Transfers 8 Free Look Period 8 Services We Provide 8 Withdrawals 9 Death Benefits 9 Guaranteed Minimum Income Benefit 9 Surrendering the Certificates 9 Income Annuity Options 9 Taxes 9 Deductions from Annuity Account Value 10 Deductions from Investment Funds 10 Trust Charges to Portfolios 10 PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT FUNDS PAGE 11 Equitable Life 11 Separate Account No. 45 11 The Trust 11 The Trust's Investment Adviser 12 Investment Policies and Objectives of the Trust's Portfolios 13 PART 3: INVESTMENT PERFORMANCE PAGE 14 Performance Data for a Certificate 14 Rate of Return Data for Investment Funds 15 Communicating Performance Data 18 Money Market Fund and Intermediate Government Securities Fund Yield Information 19 PART 4: THE GUARANTEED PERIOD ACCOUNT PAGE 20 Guarantee Periods 20 Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date 21 Death Benefit Amount 22 Investments 22 PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE PAGE 23 Availability of the Certificates 23 Contributions Under the Certificates 23 Methods of Payment 23 Allocation of Contributions 23 Free Look Period 24 Annuity Account Value 24 Transfers Among Investment Options 25 Dollar Cost Averaging 25 Withdrawals 26 Death Benefit 27 When the Certificate Owner Dies Before the Annuitant 28 Guaranteed Minimum Income Benefit 28 Cash Value 29 Surrendering the Certificates to Receive the Cash Value 29 Income Annuity Options 29 When Payments are Made 31 Assignment 31 Distribution of the Certificates 31 PART 6: DEDUCTIONS AND CHARGES PAGE 32 Charges Deducted from the Annuity Account Value 32 Charges Deducted from the Investment Funds 33 Trust Charges to Portfolios 33 Group or Sponsored Arrangements 34 PART 7: VOTING RIGHTS PAGE 35 Trust Voting Rights 35 Voting Rights of Others 35 Separate Account Voting Rights 35 Changes in Applicable Law 35 PART 8: TAX ASPECTS OF THE CERTIFICATES PAGE 36 Tax Changes 36 Taxation of Non-Qualified Annuities 36 Federal and State Income Tax Withholding 37 Generation Skipping Tax 37 Special Rules for Certificates Issued in Puerto Rico 38 Impact of Taxes to Equitable Life 38 Transfers Among Investment Options 38 PART 9: KEY FACTORS IN RETIREMENT PLANNING PAGE 39 Introduction 39 Inflation 39 Starting Early 40 Tax-Deferral 40 Investment Options 41 The Benefit of Annuitization 42 PART 10: INDEPENDENT ACCOUNTANTS PAGE 43 APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE PAGE 44 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE PAGE 45 APPENDIX III: GMDB SPECIAL ADJUSTMENT PAGE 46 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS PAGE 47
3 ------------------------------------------------------------------------------- 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 annuity benefits. ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under the Accumulator Certificate. See "Annuity Account Value" in Part 5. 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. 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 Certificate. GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods. GUARANTEED RATE--The annual interest rate established for each allocation to a Guarantee Period. 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 the 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 1. 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. TRUST--The Hudson River Trust, a mutual fund in which the assets of separate accounts of insurance companies are invested. VALUATION PERIOD--Each Business Day together with any preceding non-business days. 4 ------------------------------------------------------------------------------- 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 the Trust. Premium tax charges may also be applicable. For a complete description of the charges under the Certificate, see "Part 6: Deductions and Charges." For a complete description of the Trust's charges and expenses, see the prospectus for the Trust. As explained in Part 4, 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. However, if there is insufficient value in the Investment Funds all or a portion of the distribution fee and the annual contract fee, if any, will be deducted from your Annuity Account Value in the Guaranteed Period Account rather than the Investment Funds. See "Part 6: Charges and Deductions." A market value adjustment (either positive or negative) also may be applicable to a withdrawal, transfer or surrender of amounts from a Guarantee Period. See "Part 4: The Guaranteed Period Account." OWNER TRANSACTION EXPENSES (DEDUCTED FROM ANNUITY ACCOUNT VALUE) DISTRIBUTION FEE (SALES LOAD) AS A PERCENTAGE OF EACH CONTRIBUTION RECEIVED DURING THE FIRST CONTRACT YEAR (deducted annually on each of the seven Processing Dates following receipt of each contribution)(1)
If the initial contribution is less than $250,000 .................... 0.35% If the initial contribution is $250,000 or more ...................... 0.00%
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted upon surrender or for certain withdrawals. The applicable withdrawal charge percentage is determined by the Contract Year in which the withdrawal is made or the Certificate is surrendered beginning with "Contract Year 1" with respect to each contribution withdrawn or surrendered. For each contribution, the Contract Year in which we receive that contribution is "Contract Year 1")(2)
CONTRACT YEAR ---------- 1 ... 7.00% 2 ... 6.00 3 ... 5.00 4 ... 4.00 5 ... 3.00 6 ... 2.00 7 ... 1.00 8+ .. 0.00
Transfer Charge(3) .................................................................................$ 0.00 Guaranteed Minimum Death Benefit Charge (percentage deducted annually on each Processing Date as a percentage of the guaranteed minimum death benefit then in effect)(4) ............................. 0.35% ANNUAL CONTRACT FEE (DEDUCTED FROM ANNUITY ACCOUNT VALUE ON EACH PROCESSING DATE)(5) --------------------------------------------------------------------------------------------------- If the initial contribution is less than $25,000 .................................................. $30 If the initial contribution is $25,000 or more .................................................... $ 0 SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT FUND) --------------------------------------------------------------------------------------------------- Mortality and Expense Risk Charge .................................................................. 0.90% Asset Based Administrative Charge .................................................................. 0.25% --------- Total Separate Account Annual Expenses ............................................................ 1.15% =========
TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS IN EACH PORTFOLIO) -------------------------------------------------------------------------------
INVESTMENT PORTFOLIOS ------------------------------------------------- CONSERVATIVE GROWTH GROWTH & EQUITY COMMON INVESTORS INVESTORS INCOME INDEX STOCK -------------- ----------- ---------- -------- -------- Investment Advisory Fee 0.55% 0.54% 0.55% 0.35% 0.36% Other Expenses 0.04% 0.05% 0.23% 0.14% 0.02% -------------- ----------- ---------- -------- -------- TOTAL TRUST ANNUAL EXPENSES(6) 0.59% 0.59% 0.78% 0.49% 0.38% ============== =========== ========== ======== ========
INTERMEDIATE AGGRESSIVE MONEY GOVT. GLOBAL INTERNATIONAL STOCK MARKET SECURITIES -------- --------------- ------------ -------- -------------- Investment Advisory Fee 0.54% 0.90% 0.47% 0.40% 0.50% Other Expenses 0.15% 0.41% 0.02% 0.02% 0.06% -------- --------------- ------------ -------- -------------- TOTAL TRUST ANNUAL EXPENSES(6) 0.69% 1.31% 0.49% 0.42% 0.56% ======== =============== ============ ======== ==============
5 Notes: (1) The amount deducted is based on contributions that have not been withdrawn. See "Part 6: Deductions and Charges," "Distribution Fee." (2) Deducted upon a withdrawal with respect to amounts in excess of the 15% free corridor amount, and upon a surrender. See "Part 6: Deductions and Charges," "Withdrawal Charge." (3) We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. (4) This charge also covers the Guaranteed Minimum Income Benefit. See "Part 6: Deductions and Charges," "Guaranteed Minimum Death Benefit Charge." (5) This charge is incurred at the beginning of the Contract Year and deducted on the Processing Date. See "Part 6: Deductions and Charges," "Annual Contract Fee." (6) Expenses shown for all Portfolios except the International Portfolio are for the fiscal year ended December 31, 1994. The amount shown for the Equity Index Portfolio, which was established on March 1, 1994, is annualized. The amount shown for the International Portfolio, which was established on April 3, 1995, is an estimate. The investment advisory fee for each Portfolio may vary from year to year depending upon the average daily net assets of the respective Portfolio of the 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 "Trust Charges to Portfolios" in Part 6. EXAMPLES The examples below show the expenses that a hypothetical Certificate Owner would pay 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) The annual contract fee was computed based on an initial contribution of $10,000. These examples should not be considered a representation of past or future expenses for each Investment Fund or Portfolio. Actual expenses may be greater or less than those shown. Similarly, the annual rate of return assumed in the examples is not an estimate or guarantee of future investment performance. IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $90.65 $127.77 Growth Investors 90.65 127.77 EQUITY SERIES: Growth & Income 92.54 133.45 Equity Index 89.66 124.77 Common Stock 88.57 121.47 Global 91.65 130.77 International 97.81 149.18 Aggressive Stock 89.66 124.77 FIXED INCOME SERIES: Money Market 88.96 122.67 Intermediate Government Securities 90.36 126.88
6 IF YOU DO NOT SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $27.86 $ 85.43 Growth Investors 27.86 85.43 EQUITY SERIES: Growth & Income 29.75 91.12 Equity Index 26.87 82.44 Common Stock 25.78 79.14 Global 28.86 88.43 International 35.02 106.85 Aggressive Stock 26.87 82.44 FIXED INCOME SERIES: Money Market 26.17 80.33 Intermediate Government Securities 27.57 84.54
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 state premium or other applicable state or local taxes that may also be deducted in certain jurisdictions. 7 ----------------------------------------------------------------------------- PART 1: SUMMARY ----------------------------------------------------------------------------- The following Summary is qualified in its entirety by the terms of the Certificate when issued and the more detailed information appearing elsewhere in this prospectus (see "Prospectus Table of Contents"). WHAT IS THE ACCUMULATOR? The Accumulator is a non-qualified annuity designed to provide 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. The Accumulator features a combination of Investment Options, consisting of Investment Funds providing variable returns and Guarantee Periods providing guaranteed interest. Fixed and variable income annuities are also available. INVESTMENT OPTIONS The Accumulator offers the following Investment Options which permit you to create your own strategy for retirement savings. All available Investment Options may be selected under a Certificate. INVESTMENT FUNDS o Asset Allocation Series: the Conservative Investors and Growth Investors Funds o Equity Series: the Growth & Income, Equity Index, Common Stock, Global, International and Aggressive Stock Funds o Fixed Income Series: the Money Market and Intermediate Government Securities Funds GUARANTEE PERIODS o Guarantee Periods maturing in each of calendar years 1996 through 2005. o On , 1995 a Guarantee Period maturing in calendar year 2006 will become available. However, it will not become available in Florida until February 15, 1996. On January 1, 1996 the Guarantee Period maturing on February 15, 1996 will no longer be available for new allocations. CONTRIBUTIONS o To put a Certificate into effect, you must make an initial contribution of at least $10,000. o Subsequent contributions may be made in an amount of at least $1,000 at any time. We may refuse to accept any contribution if the sum of all contributions under a Certificate would then total more than $1,500,000. TRANSFERS You may make an unlimited number of transfers among the Investment Funds. However, there are restrictions for transfers to and from the Guaranteed Period Account. Transfers from a Guarantee Period may result in a market value adjustment. Transfers among Investment Options are currently free of charge. Transfers among the Investment Options are not taxable. 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 may cancel it by sending it to our Processing Office. 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. 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 the Separate Account and the 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. 8 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 SENT BY EXPRESS MAIL: Equitable Life Income Management Group 200 Plaza Drive Secaucus, NJ 07096 WITHDRAWALS o Lump Sum Withdrawals--After the first Contract Year and before the Annuity Commencement Date while the Certificate is in effect, you may take a Lump Sum Withdrawal from your Certificate once per Contract Year at any time during such Contract Year. The minimum withdrawal amount is $1,000. o Periodic Withdrawals--You may also withdraw funds under our Periodic Withdrawal option, where the minimum withdrawal amount is $250. Withdrawals may be subject to a withdrawal charge and withdrawals from Guarantee Periods prior to their Expiration Dates will result in a market value adjustment. Withdrawals may be subject to income tax and tax penalty. DEATH BENEFITS If the Annuitant and successor Annuitant, if any, die before the Annuity Commencement Date, the Accumulator provides a death benefit. The beneficiary will be paid the greater of the Annuity Account Value in the Investment Funds and the guaranteed minimum death benefit, plus any death benefit provided with respect to the Guaranteed Period Account. GUARANTEED MINIMUM INCOME BENEFIT When you are ready to start receiving your retirement income, the Guaranteed Minimum Income Benefit provides a minimum guaranteed lifetime income from application of an amount to purchase the Assured Payment Plan (Life Annuity with a Period Certain). On the Transaction Date the amount of lifetime income to be purchased will be based on an amount derived from the guaranteed minimum death benefit applied at guaranteed maximum purchase rates under your Certificate. However, if the Annuity Account Value in the Investment Funds applied at current Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity results in higher payments, the higher payments will be purchased. The Guaranteed Minimum Income Benefit is only applicable if you elect the Assured Payment Plan on one of the Contract Date anniversaries during Contract Years 7 through 15. Payment of subsequent contributions made after the first Contract Year under your Accumulator Certificate may affect when the Guaranteed Minimum Income Benefit will apply. The Assured Payment Plan (Life Annuity with a Period Certain) is offered under our Prospectus for the Assured Payent Plans dated October , 1995, which may be obtained from your registered representative. You should read it carefully before you decide to elect the Assured Payment Plan. SURRENDERING THE CERTIFICATES You may surrender a Certificate and receive the Cash Value at any time before the Annuity Commencement Date while the Annuitant is living. Withdrawal charges and a market value adjustment may apply. A surrender may also be subject to income tax and tax penalty. INCOME ANNUITY OPTIONS The Certificates provide income annuity options to which amounts may be applied at the Annuity Commencement Date. The income annuity options are offered on a fixed and variable basis. TAXES Generally, earnings on contributions made to the Certificate will not be included in your taxable income until distributions are made from the Certificate. Also, distributions prior to your attaining age 59 1/2 may be subject to tax penalty. 9 DEDUCTIONS FROM ANNUITY ACCOUNT VALUE Distribution Fee If your initial contribution is less than $250,000, we deduct a sales load annually in an amount of 0.35% of each contribution received during the first Contract Year. This sales load is deducted on each of the seven Processing Dates following the date we receive each contribution. The amount deducted is based on contributions that have not been withdrawn. If your initial contribution is $250,000 or more the sales load is zero. Withdrawal Charge A withdrawal charge will be imposed as a percentage of the initial and each subsequent contribution if a withdrawal exceeds the 15% free corridor amount or if the Certificate is surrendered. 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." Guaranteed Minimum Death Benefit Charge We deduct annually on each Processing Date an amount equal to 0.35% of the guaranteed minimum death benefit in effect on such Processing Date. This charge also covers the Guaranteed Minimum Income Benefit. Annual Contract Fee The charge will be $30 per Contract Year if your initial contribution is less than $25,000, and zero if your initial contribution is $25,000 or more. Premium Taxes Generally, we deduct a charge for any premium taxes from the Annuity Account Value on the Annuity Commencement Date. The current premium tax charge that might be imposed varies by state and ranges from 0 to 3.5%; the rate is 1% in Puerto Rico and 5% in the Virgin Islands. DEDUCTIONS FROM INVESTMENT FUNDS Mortality and Expense Risk Charge We charge each Investment Fund a daily asset based charge for mortality and expense risks equivalent to an annual rate of 0.90%. Asset Based Administrative Charge We charge each Investment Fund a daily asset based charge to cover a portion of the administrative expenses under the Certificate equivalent to an annual rate of 0.25%. TRUST CHARGES TO PORTFOLIOS Investment advisory fees and other expenses of the Trust are charged daily against the Trust's assets. These are reflected in the Portfolio's daily share price and in the daily Accumulation Unit Value for the Investment Funds. 10 ------------------------------------------------------------------------------ PART 2: 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 787 Seventh Avenue, New York, New York 10019. We are authorized to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico and the Virgin Islands. We maintain local offices throughout the United States. Equitable Life and its affiliates managed approximately $174 billion of assets as of December 31, 1994. Equitable Life is a wholly owned subsidiary of The Equitable Companies Incorporated (the "Holding Company"). The largest stockholder of the Holding Company is AXA, a French insurance holding company. AXA beneficially owns 60.5% of the Holding Company's outstanding common stock as well as $392.2 million stated value of its issued and outstanding Series E Convertible Preferred Stock. Under its investment arrangements with Equitable Life and the Holding Company, AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable Life. AXA is the principal holding company for most of the companies in one of the largest insurance groups in Europe. The majority of AXA's stock is controlled by a group of five French mutual insurance companies. 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 (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 the 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. THE TRUST The Trust is an open-end diversified management investment company, more commonly called a mu- 11 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 the Trust. The Trust commenced operations in January 1976 with a predecessor of its Common Stock Portfolio. The Trust does not impose a sales charge or "load" for buying and selling its shares. All dividend distributions to the Trust are reinvested in full and fractional shares of the Portfolio to which they relate. More detailed information about the Trust, its investment objec- tives, policies, restrictions, risks, expenses and all other aspects of its operations appears in its prospectus which accompanies this prospectus or in its statement of additional information. THE TRUST'S INVESTMENT ADVISER The Trust is advised by Alliance Capital Management L.P. (Alliance), which is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. On December 31, 1994, Alliance was managing over $121 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 and international markets. Alliance prides itself on its ability to attract and retain a quality, professional work force. Alliance employs 177 investment professionals, including 81 research analysts. Portfolio managers have an average investment experience of more than 16 years. Alliance's main office is located at 1345 Avenue of the Americas, New York, New York 10105. Alliance, a publicly-traded limited partnership, is indirectly majority-owned by Equitable Life. 12 INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS Each Portfolio has a different investment objective which it tries to achieve by following separate investment policies. The policies and objectives of each Portfolio will affect its return and its risks. There is no guarantee that these objectives will be achieved. The policies and objectives of the Trust's Portfolios are as follows:
Portfolio Investment Policy Objective --------------------------- ----------------------------------------------------- ------------------------------ ASSET ALLOCATION SERIES: Conservative Investors Diversified mix of publicly-traded, fixed-income and High total return without, in equity securities; asset mix and security selection the adviser's opinion, undue are primarily based upon factors expected to reduce risk to principal risk. The Portfolio is generally expected to hold approximately 70% of its assets in fixed income securities and 30% in equity securities. 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 determination of reasonable of 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: Growth & Income Primarily income producing common stocks and High total return through a securities convertible into common stocks. combination of current income and capital appreciation Equity Index Selected securities in the S&P 500 Index (the Total return performance "Index") which the advisor believes will in the (before trust expenses) that aggregate, approximate the performance results of the approximates the investment Index. performance of the Index (including reinvestment of dividends) at a risk level consistent with that of the Index Common Stock Primarily common stock and other equity-type Long-term growth of capital instruments. and increasing income Global Primarily equity securities of non-United States as Long-term growth of capital well as United States companies. International Primarily equity securities selected principally to Long-term growth of capital permit participation in non-United States companies with prospects for growth. Aggressive Stock Primarily common stocks and other equity-type Long-term growth of capital securities issued by medium and other smaller sized companies with strong growth potential. FIXED INCOME SERIES: Money Market Primarily high quality short-term money market High level of current income instruments. while preserving assets and maintaining liquidity Intermediate Government Primarily debt securities issued or guaranteed by the High current income consistent Securities U.S. government, its agencies and instrumentalities. with relative stability of Each investment will have a final maturity of not principal more than 10 years or a duration not exceeding that of a 10-year Treasury note.
13 ------------------------------------------------------------------------------- PART 3: INVESTMENT PERFORMANCE ------------------------------------------------------------------------------- This Part presents performance data for each of the Investment Funds (except the International Fund) calculated by two methods. The first method, used in calculating values for the two tables in "Performance Data for a Certificate," reflects all applicable fees and charges other than the charge for premium taxes. The second method, used in preparing rates of return for the three tables in "Rate of Return Data for Investment Funds," reflects all fees and charges other than the distribution fee, the withdrawal charge, the guaranteed minimum death benefit charge, the annual contract fee and the charge for premium taxes. These additional charges would effectively reduce the rates of return credited to a particular Certificate. The Separate Account commenced operations in May 1995 and no Certificates were issued prior to that date. The calculations of investment performance shown below are based on the actual investment results of the Portfolios of the Trust, from which certain fees and charges applicable under the Accumulator have been deducted. The results shown are not an estimate or guarantee of future investment performance, and do not reflect the actual experience of amounts invested under a particular Certificate. Performance data is not shown for the International Fund as the underlying Portfolio commenced operation in April 1995. See "Part 4: The Guaranteed Period Account" for information on the Guaranteed Period Account. PERFORMANCE DATA FOR A CERTIFICATE 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, 1994 by the $1,000 contribution made at the beginning of each period illustrated. The annual contract fee is computed based on an initial contribution of $10,000. 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. GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1994
LENGTH OF INVESTMENT PERIOD -------------------------------------------------- INVESTMENT ONE THREE FIVE TEN SINCE FUND YEAR YEARS YEARS YEARS INCEPTION* ---------------------- ------ -------- -------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors $874 $1,011 $1,272 -- $1,305 Growth Investors 881 1,053 1,730 -- 1,788 EQUITY SERIES: Growth & Income 908 -- -- -- 902 Equity Index -- -- -- -- 928 Common Stock 890 1,137 1,415 $3,479 8,642 Global 962 1,247 1,497 -- 1,763 Aggressive Stock 868 966 1,969 -- 3,965
14 GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1994 (CONTINUED)
LENGTH OF INVESTMENT PERIOD ------------------------------------------------- INVESTMENT ONE THREE FIVE TEN SINCE FUND YEAR YEARS YEARS YEARS INCEPTION* ----------------------------- ------ ------- -------- -------- ------------ FIXED INCOME SERIES: Money Market $955 $ 997 $1,125 $1,517 $2,082 Intermediate Govt. Securities 873 1,006 -- -- 1,124 * See footnote below.
AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1994
LENGTH OF INVESTMENT PERIOD ----------------------------------------------------- INVESTMENT THREE FIVE TEN SINCE FUND ONE YEAR YEARS YEARS YEARS INCEPTION* ----------------------------- ---------- -------- ------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors (12.62)% 0.35% 4.93% -- 4.53% Growth Investors (11.94) 1.74 11.59 -- 10.17 EQUITY SERIES: Growth & Income (9.25) -- -- -- (5.02) Equity Index -- -- -- -- (7.22) Common Stock (11.00) 4.38 7.19 13.28% 12.02 Global (3.81) 7.64 8.41 -- 7.35 Aggressive Stock (13.16) (1.14) 14.51 -- 16.54 FIXED INCOME SERIES: Money Market (4.46) (0.10) 2.39 4.25 5.38 Intermediate Govt. Securities (12.72) 0.19 -- -- 2.97
* The "Since Inception" dates are as follows: Conservative Investors (October 2, 1989); Growth Investors (October 2, 1989); Growth & Income (October 1, 1993); Equity Index (March 1, 1994); Common Stock (January 13, 1976); Global (August 27, 1987); Aggressive Stock (January 27, 1986); Money Market (July 13, 1981); and Intermediate Government Securities (April 1, 1991). The "Since Inception" numbers for the Equity Index Fund are unannualized. 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. Performance data of the Money Market and Common Stock Funds for the 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 Funds are based on the date of inception of the predecessor separate accounts. This performance data has been adjusted to reflect the maximum investment advisory fee payable for the corresponding Portfolio of the Trust as well as an assumed charge of 0.06% for direct operating expenses. Performance data for the remaining Investment Funds reflect (i) the investment results of the corresponding Portfolios of the Trust from the date of inception of those Portfolios and (ii) the actual investment advisory fee and direct operating expenses of the relevant Portfolio. 15 The performance data for all periods has also been adjusted to reflect the Separate Account mortality and expense risk charge, and the asset based administrative charge equal to a total of 1.15% relating to the Certificates, as well as the Trust's expenses. 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 risk charge and the asset based administrative 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: CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite Index and 30% Standard & Poor's 500 Index. GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index and 70% Standard & Poor's 500 Index. Equity Series: GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index and 25% Value Line Convertible Index. EQUITY INDEX: March 1, 1994; Standard and Poor's 500 Index which includes reinvested dividends. COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index which includes reinvested dividends. GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index. AGGRESSIVE STOCK: January 27, 1986; 50% Standard & Poor's 500 Mid-Cap Total Return Index and 50% Russell 2000 Small Stock Index. Fixed Income Series: MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill Index. INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate Government Bond Index. 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 insurance policies or annuity contracts. Lipper data provide a more accurate picture than market benchmarks of the Accumulator performance relative to other variable annuity products. ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION --------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS (5.32)% 2.71% 6.17% -- -- 6.44% Lipper Income (3.13) 5.30 7.67 -- -- 7.77 Benchmark (1.97) 5.14 7.85 -- -- 8.11 GROWTH INVESTORS (4.64) 4.04 12.60 -- -- 12.77 Lipper Flexible Portfolio (3.65) 4.46 7.01 -- -- 6.86 Benchmark (0.13) 5.83 8.39 -- -- 8.49 EQUITY SERIES: GROWTH & INCOME (1.95) -- -- -- -- (1.99) Lipper Growth & Income (1.62) -- -- -- -- 0.03 Benchmark 0.01 -- -- -- -- 1.84 EQUITY INDEX -- -- -- -- -- 0.07** Lipper S&P 500 Index Funds -- -- -- -- -- (0.54)** Benchmark -- -- -- -- -- 1.28** COMMON STOCK (3.70) 6.60 8.43 13.86% 13.95% 12.58 Lipper Growth (2.42) 5.10 7.90 11.81 12.34 11.95 Benchmark 1.32 6.25 8.68 14.38 14.50 13.12
16 ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- GLOBAL 3.49% 9.80% 9.66% -- -- 9.03% Lipper Global (2.40) 7.58 4.57 -- -- 3.52 Benchmark 5.08 6.85 3.67 -- -- 4.97 AGGRESSIVE STOCK (5.86) 1.30 15.43 -- -- 17.27 Lipper Small Company Growth (2.68) 20.63 12.56 -- -- 14.45 Benchmark (0.94) 7.46 9.65 -- -- 11.41 FIXED INCOME SERIES: MONEY MARKET 2.84 2.33 3.77 5.05% -- 6.31 Lipper Money Market 2.62 2.15 3.56 4.94 -- 6.46 Benchmark 4.22 3.63 4.90 5.98 -- 7.19 INTERMEDIATE GOVERNMENT SECURITIES (5.42) 2.55 -- -- -- 4.93 Lipper U.S. Government (4.94) 2.87 -- -- -- 5.57 Benchmark (1.75) 4.36 -- -- -- 6.55 ----------- * See footnote on next page. ** Unannualized.
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION --------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS (5.32)% 8.36% 35.02% -- -- 38.81% Lipper Income (3.13) 16.75 44.72 -- -- 48.12 Benchmark (1.97) 16.24 45.93 -- -- 50.68 GROWTH INVESTORS (4.64) 12.65 81.31 -- -- 88.03 Lipper Flexible Portfolio (3.65) 14.00 40.35 -- -- 41.66 Benchmark (0.13) 18.54 49.63 -- -- 53.39 EQUITY SERIES: GROWTH & INCOME (1.95) -- -- -- -- (2.50) Lipper Growth & Income (1.62) -- -- -- -- 0.04 Benchmark 0.01 -- -- -- -- 2.30 EQUITY INDEX -- -- -- -- -- 0.07** Lipper S&P 500 Index Funds -- -- -- -- -- (0.54)** Benchmark -- -- -- -- -- 1.28** COMMON STOCK (3.70) 21.20 50.06 266.48% 610.21% 846.46 Lipper Growth (2.42) 16.11 46.28 205.37 472.97 753.79 Benchmark 1.32 19.95 51.64 283.20 662.68 938.20 GLOBAL 3.49 32.51 58.79 -- -- 88.89 Lipper Global (2.40) 24.49 25.04 -- -- 29.26 Benchmark 5.08 21.99 19.74 -- -- 42.79 AGGRESSIVE STOCK (5.86) 3.95 105.30 -- -- 315.16 Lipper Small Company Growth (2.68) 75.55 80.72 -- -- 236.98 Benchmark (0.94) 24.10 58.49 -- -- 162.45 FIXED INCOME SERIES: MONEY MARKET 2.84 7.18 20.37 63.67 -- 128.07 Lipper Money Market 2.62 6.60 19.12 62.02 -- 132.86 Benchmark 4.22 11.29 26.99 78.68 -- 155.41 ------------- * See footnote on next page. ** Unnanualized.
17 CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION --------- --------- --------- ---------- ---------- ----------- INTERMEDIATE GOVERNMENT SECURITIES (5.42)% 7.86% -- -- -- 19.84 % Lipper U.S. Government (4.94) 8.85 -- -- -- 22.56 Benchmark (1.75) 13.65 -- -- -- 26.89
YEAR-BY-YEAR RATES OF RETURN*
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 ----- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS -- -- -- -- -- -- -- 2.80% 5.17% 18.47% 4.57% 9.49% (5.32)% GROWTH INVESTORS -- -- -- -- -- -- -- 3.71 9.34 47.20 3.73 13.94 (4.64) EQUITY SERIES: GROWTH & INCOME -- -- -- -- -- -- -- -- -- -- -- (0.54) (1.95) EQUITY INDEX -- -- -- -- -- -- -- -- -- -- -- -- 0.07** COMMON STOCK*** 16.21% 24.64% (3.08)% 31.88% 15.99% 6.25% 21.03% 24.16 (9.17) 36.31 2.02 23.40 (3.70) GLOBAL -- -- -- -- -- (13.62) 9.92 25.28 (7.15) 29.05 (1.66) 30.16 3.49 AGGRESSIVE STOCK -- -- -- -- 34.43 6.07 (0.03) 41.86 6.92 84.72 (4.29) 15.43 (5.86) FIXED INCOME SERIES: MONEY MARKET*** 11.71 7.69 9.58 6.91 5.38 5.41 6.09 7.93 7.00 4.96 2.34 1.81 2.84 INTERMEDIATE GOVERNMENT SECURITIES -- -- -- -- -- -- -- -- -- 11.11 4.38 9.31 (5.42)
-------------- * RETURNS DO NOT REFLECT THE DISTRIBUTION FEE, THE WITHDRAWAL CHARGE, THE GUARANTEED MINIMUM DEATH BENEFIT CHARGE AND THE ANNUAL CONTRACT FEE. ** UNANNUALIZED
*** PRIOR TO 1982 THE YEAR-BY-YEAR RATES OF RETURN WERE: 1976 1977 1978 1979 1980 1981 COMMON STOCK 8.19% (10.27)% 6.99% 28.32% 48.34% (6.93)% MONEY MARKET -- -- -- -- -- 5.70
COMMUNICATING PERFORMANCE DATA In reports or other communications or in advertising material, we may describe general economic and market conditions affecting the Separate Account and the 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 "Fund Inception Dates and Comparative Benchmarks" in this part 3, 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. 18 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 distribution fee, withdrawal charge, guaranteed minimum death benefit charge and any premium tax charges. 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 ssecurities Fund yields and effective yields assume the deduction of all Certificate charges and expenses other than the distribution fee, withdrawal charge, guaranteed minimum death benefit charge and any premium tax charges. See "Part 4: Money Market Fund and Intermediate Government Securities Fund Yield Information" in the SAI. 19 ------------------------------------------------------------------------------- PART 4: 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 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). 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 15 for each of the maturity years 1996 through 2005. On , 1995 a Guarantee Period maturing on February 15, 2006 will become available. However, it will not become available in Florida until February 15, 1996. On January 1, 1996 the Guarantee Period expiring on February 15, 1996 will no longer be available for new allocations. Not all Guarantee Periods will be available to Annuitants ages 71 and above. See "Allocation of Contributions" in Part 5. As Guarantee Periods expire we expect to add maturity years so that generally 10 are available in all states 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 your 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 October , 1995 and the related price per $100 of Maturity Value for each currently available Guarantee Period were as follows:
GUARANTEE PERIODS WITH EXPIRATION DATE GUARANTEED RATE FEBRUARY 15 OF AS OF OCTOBER, PRICE PER $100 OF MATURITY YEAR 1995 MATURITY VALUE ------------------- --------------- ------------------ 1996 x.xx% $xx.xx 1997 x.xx xx.xx 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
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 15 of each of years 1997 through 2001, 20 then according to the above table the lump sum contribution you would have to make as of October , 1995 would be $xxx.xx (i.e., the sum of the price per $100 of Maturity Value for each maturity year from 1997 through 2001). 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 5: (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, surrenders 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 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% annually. 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 21 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. DEATH BENEFIT AMOUNT The death benefit provided with respect to the Guaranteed Period Account 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 "Annuity Account Value" in Part 5. INVESTMENTS Contributions received under the Certificates and allocated to Guarantee Periods will be held in a "nonunitized" separate account established by Equitable Life under the laws of New York. A nonunitized separate account is a separate account in which the Certificate Owner has no claim on, or participation in the performance of, the assets held in the account. 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. 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. 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 (1933 Act), nor is the general account an investment company under the 1940 Act. Accordingly, the general account is not 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. 22 ------------------------------------------------------------------------------- PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE ------------------------------------------------------------------------------- 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 78. CONTRIBUTIONS UNDER THE CERTIFICATES Your initial contribution must be at least $10,000. Subsequent contributions may be made in an amount of at least $1,000 at any time. Subsequent contributions may no longer be made once the Annuitant reaches age 78. We may refuse to accept any contributions if the sum of all contributions under a Certificate would then total more than $1,500,000. 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. 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. 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 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 the initial contribution is subject to the provisions for the free look period. See "Free Look Period" below. 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. However, if your initial contribution is $250,000 or more, this restriction does not apply and the total amount of any contribution may be allocated to the Guaranteed Period Account. 23 o For Annuitants ages 71 through 74, allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which the Annuitant will attain age 80. For Annuitants ages 75 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 Annuity Commencement Date. Principal Assurance This option 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 may not be later than 10 years nor earlier than seven years. However, in no event may you elect a year beyond the year in which the Annuitant will attain age 80. 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 4. 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. Allocation of the portion of your initial contribution to the Investment Funds is subject to the provisions for the free look period. See "Free Look Period" below. 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. In those states that require that we calculate the refund differently, we may require that your initial contribution to the Investment Funds be allocated to the Money Market Fund until the end of the free look period. We follow these same procedures if you change your mind before a Certificate has been issued, 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 The Annuity Account Value is the sum of the Annuity Account Values in the Investment Funds and the Guaranteed Period Account. 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 the Trust, which in turn reflects the investment income and realized and unrealized capital gains and losses of the Portfolios, as well as the 24 Trust 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. Accumulation Unit Values The Accumulation Unit Value for each Investment Fund will be set at $10.00 on the date each Fund receives initial funds. For each subsequent Valuation Period, the Accumulation Unit Value will be the Accumulation Unit Value for the immediately preceding Valuation Period multiplied by the net investment factor for that subsequent Valuation Period. For information on the net investment factor, see "Part 1--Accumulation Unit Values" 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 4: 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 No transfers are permitted to or from the Guaranteed Period Account during the first Contract Year and only one transfer per Contract Year may be made thereafter. o The amount transferred to or from the Guaranteed Period Account must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from the Guaranteed Period Account. Similarly, the entire Annuity Account Value in the Investment Funds may be transferred to the Guaranteed Period Account. o Transfers out of the Guaranteed Period Account other than at the Expiration Date will be subject to a market value adjustment. See "Part 4: The Guaranteed Period Account." o Transfers to Guarantee Periods are subject to the restrictions set forth under "Guarantee Periods and Expiration Dates" in Part 4 and are limited based on the attained age of the Annuitant. 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 If you have at least $10,000 of Annuity Account Value in the Money Market Fund, you may choose to have a specified dollar amount transferred from the Money Market Fund to other Investment Funds on a monthly basis. 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. 25 The dollar cost averaging option may be elected at the time you apply for the Certificate or at a later date. The minimum amount that may be transferred each month 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 12. The transfer date will be the same calendar day each 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. WITHDRAWALS 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. Two withdrawal options are available: Lump Sum Withdrawals and Periodic Withdrawals. Withdrawals may result in withdrawal charges. See "Part 6: Deductions and Charges." Withdrawals may also be taxable and subject to tax penalty. See "Part 8: 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 Withdrawals, Transfers or Surrender Prior to the Expiration Date" in Part 4. 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." o LUMP SUM WITHDRAWALS--After the first Contract Year, you may take a withdrawal once per Contract Year at any time during such Contract Year. The minimum amount of such withdrawal is $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 PERIODIC WITHDRAWALS--Periodic Withdrawals provide level percentage or level amount payouts. You may choose to receive Periodic Withdrawals on a quarterly or annual frequency. You select a dollar amount or percentage of the Annuity Account Value to be withdrawn, subject to a maximum of 2.5% quarterly and 10.0% annually, but in no event may any payment be less than $250. If at the time a Periodic Withdrawal is to be made, the withdrawal amount would be less than $250, no payment will be made and your Periodic 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 Periodic Withdrawal option may not be elected to start sooner than 28 days after issue of the Certificate. You may elect Periodic Withdrawals at any time by completing the proper form and sending it to our Processing Office. You may change the payment frequency of your Periodic 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 Periodic 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, Periodic 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. 26 Withdrawal Charges Withdrawals in excess of the 15% free corridor amount may be subject to a withdrawal charge. See "Withdrawal Charge" in Part 6. 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 guaranteed minimum death benefit defined below; and (2)the death benefit provided with respect to the Guaranteed Period Account. See "Part 4: The Guaranteed Period Account." Guaranteed Minimum Death Benefit (GMDB) Applicable to Certificates issued in all states except New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, see (1) below), the GMDB is equal to (a) the GMDB determined on the immedi- ately preceding Business Day, plus (b) any subse- quent contributions and transfers into the Invest- ment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see (2) below) is credited to and becomes part of the GMDB on each Processing Date. (1) At the end of the seventh Contract Year, the GMDB calculated on such date will be set at the then GMDB determined above or, if greater, the current Annuity Account Value in the Investment Funds. (2) Interest will be calculated at the effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on the lesser of the applicable interest rate above and the actual rate of return for the Money Market Fund for the Contract Year such amounts are invested. Contributions, transfers and withdrawals will be taken into account. The above applicable GMDB interest rate will be reduced once subsequent contributions exceed certain levels as explained in (3) below. (3) Depending on the Annuitant's issue age, the GMDB interest rate may be reduced based on the ratio of total contributions made after a specified age to net contributions* made prior to that age. The specified ages and ratios are shown in table below; the interest rate is shown in the applicable ratio column.
--------------------------------------------------- REDUCED GMDB INTEREST RATES RATIO OF CONTRIBUTIONS ON OR AFTER THE SPECIFIED AGE TO NET CONTRIBUTIONS* BEFORE THE SPECIFIED AGE --------------------- 100% MORE SPECIFIED THROUGH THAN ISSUE AGE AGE 250% 250% ------------- ------------- ----------- -------- 0-69 70 3% 0% 70-74 75 0% 0% 75+ N/A 0% 0%
--------------- There is no reduction in the GMDB interest rate if the ratio is less than 100%. * Net contributions are determined on the Processing Date after the Annuitant reaches the specified age and are defined as cumulative contributions made prior to the specified age, minus cumulative withdrawals made prior to the specified age. --------------------------------------------------- Applicable to Certificates issued in New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, in accordance with (1) above) the GMDB is equal to (a) the GMDB calculated on the immediately preceding Business Day, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. Additionally, on each Processing Date the GMDB is reset at the greater of the current GMDB and the current Annuity Account Value in the Investment Funds. On no date (except possibly at the end of the seventh Contract Year) however, will the GMDB be greater than (a) the portion of the initial contribution allocated to the Investment Funds, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds, plus (d) interest (in accordance with (2) above) that is credited on each Processing Date. 27 See Appendix II for an example of the calculation of the GMDB. How Withdrawals and Transfers Affect the GMDB Whenever a withdrawal or transfer from the Investment Funds is made, the GMDB is immediately reduced by the amount of the withdrawal or transfer. In addition, a "special adjustment" will be made to the GMDB on the next Processing Date to realign the GMDB with the Annuity Account Value. The special adjustment will be made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the Contract Year) and "GMDB contributions." GMDB contributions are equal to the sum of all contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB contributions are not reduced by withdrawals or transfers from the Investment Funds. See Appendix III for a further discussion and an example of the special adjustment. 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. 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. GUARANTEED MINIMUM INCOME BENEFIT When you are ready to start receiving your retirement income, and you elect the Assured Payment Plan (Life Annuity with a Period Certain), the Guaranteed Minimum Income Benefit (GMIB) provides a minimum guaranteed lifetime income from application of an amount to purchase the Assured Payment Plan Certificate. The Assured Payment Plan provides payments during a period certain (which you select) with payments continuing for life thereafter. On the Transaction Date the amount of the lifetime income to be purchased under the Assured Payment Plan will be based on an amount equal to the GMDB (described above) determined without regard to the seventh Contract Year reset applied at guaranteed maximum purchase rates under the Certificate. The guaranteed maximum purchase rates are based on interest at 3% and expected mortality based on the 1983 Individual Annuity Mortality Table "a" projected with Scale G. However, if the Annuity Account Value in the Investment Funds under your Accumulator Certificate applied at current Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity results in higher payments under the Assured Payment Plan, the higher payments will be purchased. If you have any Annuity Account Value in the Guarantee Period Account under your Accumulator Certificate as of the Transaction Date, such Annuity Account Value will also be applied towards the 28 purchase of the payments under the Assured Payment Plan. Any applicable market value adjustment will apply. The GMIB applies if your election of the Assured Payment Plan meets the following conditions: o You must be the Owner and Annuitant of the Accumulator Certificate, and between ages 59 1/2 through 83. You may elect this option at ages as young as 54 1/2 provided payments do not start under the Assured Payment Plan before you attain age 59 1/2 . o You meet the minimum contribution requirement for the Assured Payment Plan of $10,000. o The maximum period certain you elect under the Assured Payment Plan is 9 years for increasing payments and 10 years for level payments. o The Assured Payment Plan is elected on one of the Contract Date anniversaries during Contract Years 7 through 15 under your Accumulator Certificate. However, if you make subsequent contributions under your Accumulator Certificate, at any time that the sum of subsequent contributions made after the first Contract Year exceeds total contributions made during the first Contract Year, the period during which the GMIB applies will change. The GMIB will then be applicable on one of the Contract Date anniversaries for the 7th through 15th Contract Year following the Contract Year in which the excess occurred. You elect the Assured Payment Plan by submitting the proper form and returning your Accumulator Certificate to our Processing Office. The amount to be applied under the Assured Payment Plan Certificate will be determined on the Contract Date anniversary following the date we receive your request and the Certificate. Your request must be received at our Processing Office at least seven days before the Contract Date anniversary. The Assured Payment Plan (Life Annuity with a Period Certain) is described in our Prospectus for the Assured Payment Plans dated October , 1995, which may be obtained from your registered representative. You should read it carefully before you decide to elect the GMIB. You will also receive a quote indicating how much future income could be purchased under the Assured Payment Plan. 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 4: 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: (1) the Annuity Account Value; (2) less any withdrawal charge; and (3) less any annual contract fee incurred but not yet deducted. 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 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 8: 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, no Annuity Commencement Date will be later than the Processing Date which follows the Annuitant's 85th birthday. 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 29 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 4. 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. 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 Common Stock Fund through the purchase of annuity units. The amount of each variable annuity payment may fluctuate, depending upon the performance of the Common Stock Fund. 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 Common Stock on other 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 If you are the Owner and the Annuitant, you may apply your Annuity Account Value to purchase the Assured Payment Plan (Life Annuity with a Period Certain), provided you meet the issue age and payment restrictions for the Assured Payment Plan. The Assured Payment Plan, is designed to provide guaranteed level or increasing annual payments for your life or for your life and the life of a joint Annuitant. If 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 the Annuity Account Value is applied from the Accumulator when the dollar amount of the withdrawal charge is 2% or less, there 30 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 Plans, dated October , 1995. 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 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 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 8: Tax Aspects of the Certificates." 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 787 Seventh Avenue, New York, New York 10019. The Certificates will be sold by registered representatives of EDI and its affiliates, who are also our licensed insurance agents, as well as by unaffiliated broker-dealers with which EDI has entered into selling agreements. Broker- dealer sales compensation (including for EDI and its affiliates) will 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. 31 ------------------------------------------------------------------------------- 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 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. Distribution Fee If your initial contribution is less than $250,000, we deduct a sales load annually in an amount of 0.35% of each contribution received during the first Contract Year. This sales load is deducted on each of the seven Processing Dates (so long as the Certificate is in force) following receipt of each contribution. See "Example" below. If your initial contribution is $250,000 or more, the sales load is zero. 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 Withdrawal Amount (Free Corridor) No withdrawal charge will be applied during any Contract Year in which the amount withdrawn does not exceed 15% of the Annuity Account Value at the beginning of the Contract Year minus any amount previously withdrawn during that Contract Year. The 15% maximum is called the free corridor amount. 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 8: Tax Aspects of the Certificates." The withdrawal charge is to help cover sales expenses. Because of the way the distribution fee is calculated the distribution fee and the withdrawal charge combined will never exceed the 7.0% maximum withdrawal charge. Example--The example below illustrates how the withdrawal charge and the distribution fee would be calculated upon a withdrawal. This example assumes an initial contribution of $12,000 and subsequent contributions of $12,000 each in the second and third Contract Years for total contributions under the Certificate of $36,000. It also assumes a withdrawal from the Investment Funds at the beginning of the fourth Contract Year of 25% of an Annuity Account Value of $40,000. The total withdrawal amount would be $10,000 ($40,000 x .25). In this case, $6,000 ($40,000 x .15) would be the free corridor amount and could be withdrawn without imposition of a withdrawal charge. The balance of $4,000 ($10,000 - $6,000) would be considered a withdrawal of a part of the initial contribution of $12,000. This contribution would be subject to a 4.0% withdrawal charge of $160 ($4,000 x .04) as indicated in the chart above. The distribution fee deducted on the Processing Date following the withdrawal would be based on the total remaining contributions of $32,000 ($36,000-$4,000). 32 Transfer Charge Currently there is no charge for transfers. We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. Guaranteed Minimum Death Benefit Charge We deduct a charge for providing a minimum death benefit guarantee with respect to the Investment Funds annually on each Processing Date. The charge is equal to 0.35% of the GMDB in effect at such Processing Date. This charge also covers the Guaranteed Minimum Income Benefit. If the amount collected from this charge exceeds the cost of providing the benefits, it will be to our profit, and may be used to pay distribution expenses not recovered from sales charges under the Certificates. Annual Contract Fee The annual contract fee is incurred at the beginning of the Contract Year and deducted at the end of each Contract Year on the Processing Date. We deduct this charge when determining the Cash Value payable if you surrender the Certificate prior to the end of a Contract Year. The amount deducted is determined by the amount of your initial contribution. The charge will be $30 per Contract Year if your initial contribution is less than $25,000, and zero if your initial contribution equals $25,000 or more. This charge is to cover a portion of our administrative expenses. See "Asset Based Administrative Charge," below under "Charges Deducted from the Investment Funds." Premium Taxes Generally, we deduct any applicable charges for state and local taxes from the amount applied to provide an income annuity option if you elect to annuitize. In certain states, however, we may deduct the charge for taxes from contributions rather than at the Annuity Commencement Date. The current premium tax charge that might be imposed varies by state and ranges from 0% to 3.5%; the rate is 1% in Puerto Rico and 5% in the Virgin Islands. Allocation of Certain Charges to the Guaranteed Period Account No portion of the distribution fee or the annual contract fee will be allocated to the Guaranteed Period Account, unless there is insufficient value in the Investment Funds. If charges are allocated to the Guaranteed Period Account, they will be allocated to the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. If charges are allocated to the Guaranteed Period Account, you will not receive the full Guaranteed Rate if held to the Expiration Date. See "Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date" in Part 4. CHARGES DEDUCTED FROM THE INVESTMENT FUNDS Mortality and Expense Risk 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 the guaranteed minimum death benefit charge is insufficient to pay any amount by which such death benefit 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. Asset Based Administrative Charge We will deduct a daily charge from the assets in each Investment Fund, to compensate us for a portion of the administrative 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. The annual contract fee and the asset based administrative charge are not designed to produce a profit for Equitable Life. TRUST CHARGES TO PORTFOLIOS Investment advisory fees charged daily against the Trust's assets, direct operating expenses of the Trust 33 (such as trustees' fees, expenses of independent auditors and legal counsel, bank and custodian charges and liability insurance), and certain investment-related expenses of the 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:
DAILY AVERAGE NET ASSETS ------------------------------------- FIRST $350 NEXT $400 OVER $750 MILLION MILLION MILLION ----------- ----------- ----------- ASSET ALLOCATION SERIES: Conservative Investors ... .550% .525% .500% Growth Investors .......... .550% .525% .500% EQUITY SERIES: Common Stock .............. .400% .375% .350% Global .................... .550% .525% .500% Aggressive Stock .......... .500% .475% .450% FIXED INCOME SERIES: Money Market .............. .400% .375% .350% Intermediate Govt. Securities ................ .500% .475% .450% FIRST $500 NEXT $500 OVER $1 MILLION MILLION BILLION ----------- ----------- ----------- EQUITY SERIES: Growth & Income ........... .550% .525% .500% FIRST $750 NEXT $750 OVER $1.5 MILLION MILLION BILLION ----------- ----------- ----------- EQUITY SERIES: Equity Index .............. .350% .300% .250% FIRST $500 NEXT $1 OVER $1.5 MILLION BILLION BILLION ----------- ----------- ----------- EQUITY SERIES: International ............. .900% .850% .800%
Investment advisory fees are established under the Trust's investment advisory agreements between the Trust and its investment adviser, Alliance. All of these fees and expenses are described more fully in the Trust prospectus. GROUP OR SPONSORED ARRANGEMENTS For certain group or sponsored arrangements, we may reduce the distribution fee, the withdrawal charge and the annual contract fee or change the minimum initial contribution requirements. We may also change the guaranteed minimum death benefit. 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 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 distribution fee, withdrawal charge or annual contract fee 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. 34 ------------------------------------------------------------------------------- PART 7: VOTING RIGHTS ------------------------------------------------------------------------------- TRUST VOTING RIGHTS As explained previously, contributions allocated to the Investment Funds are invested in shares of the corresponding Portfolios of the Trust. Since we own the assets of the Separate Account, we are the legal owner of the shares and, as such, have the right to vote on certain matters. Among other things, we may vote: o to elect the Trust's Board of Trustees, o to ratify the selection of independent auditors for the Trust, and o on any other matters described in the Trust's current prospectus or requiring a vote by shareholders under the 1940 Act. Because the Trust is a Massachusetts 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 Trust share 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 the Trust. 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. The Trust's Board of Trustees intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the 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 the Common Stock Fund divided by the Accumulation Unit Value for the Common Stock 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. 35 ------------------------------------------------------------------------------ PART 7: VOTING RIGHTS ------------------------------------------------------------------------------ TRUST VOTING RIGHTS As explained previously, contributions allocated to the Investment Funds are invested in shares of the corresponding Portfolios of the Trust. Since we own the assets of the Separate Account, we are the legal owner of the shares and, as such, have the right to vote on certain matters. Among other things, we may vote: o to elect the Trust's Board of Trustees, o to ratify the selection of independent auditors for the Trust, and o on any other matters described in the Trust's current prospectus or requiring a vote by shareholders under the 1940 Act. Because the Trust is a Massachusetts 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 Trust share 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 the Trust. 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. The Trust's Board of Trustees intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the 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 the Common Stock Fund divided by the Accumulation Unit Value for the Common Stock 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. 35 ---------------------------------------------------------------------------- PART 8: 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 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. This includes monitoring the assets of the Trust to make sure the Separate Account complies with the investment diversification requirements applicable to non-qualified variable annuities. 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 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. 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 your 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 expect- 36 ancy) 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 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 5, 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. 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. A recipient of periodic payments (e.g., monthly or annual payments) which total less than a certain Federal minimum ($13,900 taxable amount for 1995) will generally be exempt from the Federal income tax withholding rules, unless the recipient elects to have tax withheld. A recipient of periodic payments which equal or exceed the Federal minimum ($13,900 taxable amount for 1995) will generally be 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. A withholding election may be revoked at any time and remains effective until revoked. 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. 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. GENERATION SKIPPING TAX 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 to transfers which would also be subject to the gift and estate tax rules. Individuals are generally al- 37 lowed an aggregate generation skipping tax exemption of $1 million. 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. 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. 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. 38 ------------------------------------------------------------------------------- PART 9: 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 8: 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 9 (other than charts 1, 2, 3, 4 and 7) is Ibbotson Associates, Inc. Chicago. Stocks, Bonds, Bills and Inflation 1994 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 1964 and 1994, the average annual inflation rate was 5.36%. As demonstrated in Chart 1, this 5.36% annual rate of inflation would cause the purchasing power of $35,000 to decrease to only $7,308 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 1964-1994 historical inflation rate of 5.36% is used. In this case, $167,626 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.......... $20,764 20 Years.......... $12,318 30 Years.......... $ 7,308
[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.......... $ 58,996 20 Years.......... $ 99,445 30 Years.......... $167,626
[END OF GRAPHICALLY REPRESENTED DATA] 39 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 CONTRIBUTION YEAR 10 YEAR 15 YEAR 20 YEAR 25 YEAR 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- 40 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 1964-1994 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 9.95% over this period, in contrast to 6.66% and 6.96% for the other two investment categories. Significantly, common stock returns also outpaced inflation which grew at 5.36% 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 $105,958 in 1994. Had the interest been reinvested in the fixed investment, the fixed investment would have grown to $59,072. As illustrated in Chart 5, significant opportunities for growth exist while preserving principal. See "Notes" below. CHART 5 $105,958 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 104,634 58,813 D 105,958 59,072
[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, 41 would have grown to $113,714 in 1994. In contrast, had the principal not been transferred, the fixed investment would have grown to $59,072. See "Notes" below. CHART 6 $113,714 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 112344 58813 D 113714 59072
[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)
JOINT AND SURVIVOR* ----------------------------------- INTEREST PRINCIPAL AND ONLY FOR INTEREST FOR SINGLE 50% TO 66.67% TO 100% TO ANNUITANT LIFE 15 YEARS LIFE SURVIVOR SURVIVOR SURVIVOR ----------- ---------- -------------- -------- ---------- ----------- ---------- 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
-------------- 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. 42 ------------------------------------------------------------------------------ PART 10: INDEPENDENT ACCOUNTANTS ------------------------------------------------------------------------------ The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the years ended December 31, 1994 and 1993 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. The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the year ended December 31, 1992 included in Equitable Life's Annual Report on Form 10-K, incorporated by reference in the prospectus, have been examined by Deloitte & Touche 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 Deloitte & Touche LLP given upon their authority as experts in accounting and auditing. 43 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, 1996 to a Guarantee Period with an Expiration Date of February 15, 2005 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, 2000.
ASSUMED GUARANTEED RATE ON FEBRUARY 15, 2000 ---------------------- 5.00% 9.00% ---------- ---------- As of February 15, 2000 (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, 2000 (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. 44 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE ----------------------------------------------------------------------------- Under the Certificate the death benefit is equal to the sum of: (1) the Annuity Account Value in the Investment Funds, or, if greater, the GMDB (see "Guaranteed Minimum Death Benefit" (GMDB) in Part 5; and (2) the death benefit provided with respect to the Guaranteed Period Account (see "Death Benefit Amount" in Part 4). 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 Money Market Fund or Intermediate Government Securities Fund), no subsequent contributions, no transfers and no withdrawals, the GMDB for an Annuitant age 45 would be calculated as follows:
END OF CONTRACT ANNUITY ACCOUNT NON-NEW YORK YEAR VALUE GMDB NEW YORK GMDB ---------- --------------- -------------- ------------- 1 $105,000 $106,000(1) $105,000(4) 2 $108,675 $112,360(1) $108,675(4) 3 $124,976 $119,102(1) $119,102(5) 4 $135,912 $126,248(1) $126,248(5) 5 $149,503 $133,823(1) $133,823(5) 6 $149,503 $141,852(1) $141,852(5) 7 $161,463 $161,463(2) $161,463(5) 8 $161,463 $171,151(3) $161,463(4)
The Annuity Account Values for Contract Years 1 through 8 are determined based on hypothetical rates of return of 5.00%, 3.50%, 15.00%, 8.75%, 10.00%, 0.00%, 8.00% and 0.00%, respectively. NON-NEW YORK (1) For Contract Years 1 through 6, the GMDB equals the initial contribution increased by 6%. (2) At the end of the seventh Contract Year the GMDB calculated on the 6% increase basis on that date of $150,363 is reset to the Annuity Account Value of $161,463 since that amount is greater. (3) Equals the prior GMDB of $161,463 increased by 6%. NEW YORK (4) At the end of Contract Years 1 and 2, and again at the end of Contract Year 8, the GMDB is equal to the Annuity Account Value. (5) At the end of Contract Years 3, 4, 5 and 6, the GMDB is equal to the contributions increased by 6% instead of the Annuity Account Value, since the GMDB cannot be greater than this amount. However, at the end of the seventh Contract Year the GMDB is equal to the Annuity Account Value of $161,463 even though it is greater than the contributions increased at 6% ($150,363) due to the end of the seventh Contract Year reset. 45 APPENDIX III: GMDB SPECIAL ADJUSTMENT ----------------------------------------------------------------------------- A special adjustment is made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year) and "GMDB contributions." GMDB contributions are equal to the sum of all contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB contributions are not reduced by withdrawals or transfers from the Investment Funds. The special adjustment will be equal to: (A) x (B) -(C): Where: (A) equals the GMDB (before the special adjustment and reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year), (B) equals (i)/(ii); where (i) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year, and (ii) equals the Annuity Account Value (plus any withdrawals and transfers from the Investment Funds during the prior Contract Year), and (C) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year. Example: The following illustrates how a withdrawal would affect the non-New York GMDB under a Certificate, assuming an initial contribution of $100,000, an Annuity Account Value of $120,000 (with no allocation to the Money Market Fund or the Intermediate Government Securities Fund) at the end of the fourth year and a GMDB of $126,248 at the end of the fourth year. If no withdrawals or transfers were to be made in the fifth year, the end of fifth year GMDB would be $133,823. If a $60,000 withdrawal was made at the end of the fifth year and a 0% return had been earned in the fifth year, the special adjustment would be calculated using the above formula as follows: (A) = $133,823 (B) = (i)/(ii) = $60,000/$120,000 = .5 (C) = $60,000 (A) X (B) - (C) = [($133,823 X .5) - $60,000] = $6,911. The end of fifth year GMDB would equal $133,823 - $60,000 - $6,911 = $66,912. The special adjustment was necessary in this case because (i) the end of fifth year Annuity Account Value was less than the GMDB at the end of the fifth year and (ii) the withdrawal of $60,000 was an amount greater than the difference between the end of the fifth year GMDB (before reduction for the withdrawal) and the GMDB contributions. In this case, that difference was $33,823 ($133,823 - $100,000). 46 ------------------------------------------------------------------------------ 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 Government 3 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 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 47 INCOME MANAGERSM PROSPECTUS FOR ASSURED GROWTH PLAN AND ASSURED PAYMENT PLANS ---------------------- DATED OCTOBER , 1995 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 an annuity contract (INCOME MANAGER) 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." INCOME MANAGER Certificates described in this prospectus are used for after-tax contributions to a non-qualified annuity. A minimum contribution of $10,000 is required to put a Certificate into effect. The INCOME MANAGER is a family of annuities designed to provide retirement income. Under the INCOME MANAGER annuities described in this prospectus, the Owner (CERTIFICATE OWNER, YOU and YOUR) can choose to have amounts accumulate on a tax-deferred basis until a later date, by investing in any or all of the available Guarantee Periods (ASSURED GROWTH PLAN). Alternatively, you may choose to receive guaranteed periodic payments under one of our ASSURED PAYMENT PLANS. You may choose to receive level guaranteed payments payable for a specified period (PERIOD CERTAIN) with payments generally starting within 13 months. Or, you may choose to receive level or increasing guaranteed payments for a specified period of time, and continuing for life thereafter (LIFE ANNUITY WITH A PERIOD CERTAIN). Under this plan you choose whether to receive payments for your life (SINGLE LIFE) or for your life and the life of a joint Annuitant (JOINT AND SURVIVOR) you designate. Under the Assured Growth Plan you may choose from a variety of payout options, including the Assured Payment Plans and other fixed annuities. 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). The Guarantee Periods currently available are those maturing in calendar years 1996 through 2005, under the Assured Growth Plan, and 1996 through 2010 under the Assured Payment Plans. Each Guarantee Period has its own Guaranteed Rates. On , 1995, a Guarantee Period maturing in calendar year 2006 will become available under the Assured Growth Plan and on , 1995 a Guarantee Period maturing in calendar year 2011 will become available under the Assured Payment Plans. However, these two Guarantee Periods will not be available in Florida until February 15, 1996. The number of Guarantee Periods available may be limited in some states. On January 1, 1996, the Guarantee Period maturing in calendar year 1996 will no longer be available for new allocations. You are eligible for our Flexible Income Program when you purchase the Assured Growth Plan by December 31, 1995 and invest solely in the Guarantee Period with an Expiration Date of February 15, 1998. Then at any time before December 31, 1997, you can transfer your investment to the Assured Payment Plan (Life Annuity with a Period Certain) and start a lifetime of guaranteed income. This prospectus provides information about the INCOME MANAGER that prospective investors should know before investing. You should read it carefully and retain it for future reference. A registration statement relating to interests under the Guarantee Periods has been filed with the Securities and Exchange Commission (SEC). 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 1995 The Equitable Life Assurance Society of the United States, New York, New York 10019. All Rights Reserved. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1994 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 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, 787 Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary (telephone: (212) 554-1234). 2 ------------------------------------------------------------------------------- PROSPECTUS TABLE OF CONTENTS -------------------------------------------------------------------------------
GENERAL TERMS PAGE 4 PART 1: SUMMARY PAGE 5 What is the INCOME MANAGER? 5 Assured Growth Plan 5 Flexible Income Program 6 Assured Payment Plans 6 Assured Payment Plan (Life Annuity with a Period Certain) 6 Assured Payment Plan (Period Certain) 7 Other Provisions of the Assured Payment Plans 7 Free Look Period 7 Services We Provide 7 Surrendering the Certificates 8 Income Annuity Options 8 Taxes 8 Premium Taxes 8 Equitable Life 8 PART 2: THE GUARANTEED PERIOD ACCOUNT PAGE 9 Guarantee Periods 9 Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date 10 Investments 10 PART 3: PROVISIONS OF THE ASSURED GROWTH PLAN AND THE ASSURED PAYMENT PLANS PAGE 12 Assured Growth Plan 12 Contributions 12 Allocation of Contributions 12 Transfers 12 Options at Expiration Date of a Guarantee Period 13 Withdrawals 13 Death Benefit 14 When the Certificate Owner Dies Before the Annuitant 14 Surrendering the Certificates to Receive the Cash Value 15 Assignment 15 Withdrawal Charge 15 Flexible Income Program 15 Assured Payment Plans 16 Assured Payment Plan (Life Annuity with a Period Certain) 16 Contributions 17 Allocation of Contributions 17 Period Certain Payments 17 Purchase Restrictions for Joint & Survivors 17 Payments After the Period Certain 17 Allocation of Lump Sum Withdrawals 18 Death Benefit 18 Surrendering the Certificates 19 Assured Payment Plan (Period Certain) 19 Contribution 19 Allocation of Contribution 19 Allocation of Lump Sum Withdrawals 19 Death Benefit 19 Other Provisions of the Assured Payment Plans 19 Transfers 19 Lump Sum Withdrawals 20 Assignment 20 Surrendering the Certificates to Receive the Cash Value 20 Withdrawal Charge 20 PART 4: OTHER PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE PAGE 22 Methods of Payment 22 Wire Transmittals 22 Free Look Period 22 Annuity Account Value 22 Cash Value 23 When Payments are Made 23 Beneficiary 23 Income Annuity Options 23 Distribution of the Certificates 24 Premium Taxes 24 Group or Sponsored Arrangements 25 PART 5: TAX ASPECTS OF THE CERTIFICATES PAGE 26 Tax Changes 26 Taxation of Non-Qualified Annuities 26 Federal and State Income Tax Withholding 27 Generation Skipping Tax 28 Special Rules for Certificates Issued in Puerto Rico 28 Transfers Among Guarantee Periods 28 PART 6:INDEPENDENT ACCOUNTANTS PAGE 29 APPENDIX: MARKET VALUE ADJUSTMENT EXAMPLE PAGE 30
3 ------------------------------------------------------------------------------ GENERAL TERMS ------------------------------------------------------------------------------ ANNUITANT--The individual who is the measuring life for determining annuity benefits. ANNUITY ACCOUNT VALUE--The sum of the present value of the Maturity Value in each Guarantee Period. See "Annuity Account Value" in Part 4. ANNUITY COMMENCEMENT DATE--Under the Assured Growth Plan, the date on which amounts will be applied to provide an annuity benefit. Under the Assured Payment Plans, the date on which annuity payments are to commence. ASSURED GROWTH PLAN--A deferred annuity under which amounts accumulate on a tax-deferred basis until a later date. ASSURED PAYMENT PLAN (Period Certain)-- An immediate annuity under which you elect to receive a level stream of annual payments for a period certain. ASSURED PAYMENT PLAN (Life Annuity with a Period Certain)--An annuity which provides guaranteed annual payments during a period certain and for your lifetime thereafter or for your lifetime and the lifetime of a joint Annuitant you designate. 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 INCOME MANAGER Certificate and has the right to exercise all rights under the Certificate. Under the Assured Payment Plans, the Certificate Owner must also be the Annuitant. 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. 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 Certificate. GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods. GUARANTEED PERIOD AMOUNT--The term used to refer to the amount allocated to and accumulated in each Guarantee Period. GUARANTEED RATE--The annual interest rate established for each allocation to a Guarantee Period. JOINT AND SURVIVOR--The form of Assured Payment Plan (Life Annuity with a Period Certain) under which after the death of an Annuitant payments continue to the surviving Annuitant. Payments are made as long as at least one Annuitant is living. LIFE CONTINGENT ANNUITY--Provides guaranteed lifetime income beginning at a future date under the Assured Payment Plan (Life Annuity with a Period Certain). MATURITY VALUE--The amount in a Guarantee Period on its Expiration 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 1. SINGLE LIFE--The form of Assured Payment Plan (Life Annuity with a Period Certain) under which payments are made to you for your lifetime. 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. 4 ------------------------------------------------------------------------------ PART 1: SUMMARY ------------------------------------------------------------------------------ The following Summary is qualified in its entirety by the terms of the Certificate when issued and the more detailed information appearing elsewhere in this prospectus (see "Prospectus Table of Contents"). WHAT IS THE INCOME MANAGER? The INCOME MANAGER is a family of annuities designed to provide retirement income. The Assured Growth Plan and Assured Payment Plan annuities described in this prospectus provide for the investment of funds on an after-tax basis. They feature a series of Guarantee Periods providing guaranteed interest. O GUARANTEE PERIODS Guarantee Periods maturing in each of calendar years 1996 through 2005 under the Assured Growth Plan and 1996 through 2010 under the Assured Payment Plans are available. On , 1995, a Guarantee Period maturing in calendar year 2006 will become available under the Assured Growth Plan and on , 1995 a Guarantee Period maturing in 2011 will become available under the Assured Payment Plans. However, these two Guarantee Periods will not be available in Florida until February 15, 1996. On January 1, 1996 the Guarantee Period maturing in the calendar year 1996 will no longer be available for new allocations. The number of Guarantee Periods available for investment may be limited in some states. ASSURED GROWTH PLAN The Assured Growth Plan is for the accumulation phase of your retirement investment program. You design your own program by selecting one or more of the Guarantee Periods and allocating your contributions among them. Amounts accumulate on a tax- deferred basis until amounts are withdrawn or distributions become payable. You can decide when and if to apply amounts to one of the Assured Payment Plans or to another fixed income annuity option. o Contributions To put a Certificate into effect, you must make a contribution of at least $10,000. You may make subsequent contributions of at least $1,000 at any time. o Transfers After the first Contract Year and prior to the Annuity Commencement Date, you may transfer funds among the Guarantee Periods once per Contract Year. Transfers must be in an amount of at least $2,000. Transfers may result in a market value adjustment. Transfers among Guarantee Periods are not taxable. o Withdrawals Lump Sum Withdrawals--After the first Contract Year, before the Annuity Commencement Date while the Certificate is in effect, you may take a Lump Sum Withdrawal from your Certificate once per Contract Year at any time during such Contract Year. The minimum withdrawal amount is $1,000. Principal Assurance Withdrawals--Principal Assurance Withdrawals are designed to provide you with (i) level annual withdrawals in the calendar years that you select, plus (ii) a Maturity Value equal to your original contribution in the last calendar year that you select. You select a calendar year in which you wish to receive the last withdrawal. Such year must not be later than 2005 nor earlier than 2002. You also select the year in which the withdrawals will begin. Such withdrawals must be for a period of at least five consecutive years. Lump Sum Withdrawals may be subject to a withdrawal charge and may result in a market value adjustment. Both Lump Sum Withdrawals and Principal Assurance Withdrawals may be taxable and if you are under age 59 1/2 , subject to tax penalty. o Death Benefit If the Annuitant and successor Annuitant, if any, die before the Annuity Commencement Date, the Certificate provides a death benefit. The beneficiary will be paid the death benefit which is the greater of the Annuity Account Value and the sum of the Guaranteed Period Amounts in each Guarantee Period. o Withdrawal Charge A withdrawal charge is imposed as a percentage of each contribution made to the extent that a Lump Sum Withdrawal exceeds the 10% free corridor amount, or if the Certificate is surrendered to receive its Cash Value. While Principal Assurance Withdrawals are in effect, a withdrawal charge, if any, will apply to all Lump Sum Withdrawals. 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%
5 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." FLEXIBLE INCOME PROGRAM The Flexible Income Program is a special offer available on Assured Growth Plan applications received from the date of this prospectus through December 31, 1995 with the Assured Payment Plan (Life Annuity with a Period Certain) elected as the Income Annuity Option and subject to the following: o You must be both the Owner and the Annuitant under the Assured Growth Plan Certificate and be between the ages of 59 1/2 and 78. o All contributions are invested in the Guarantee Period with an Expiration Date of February 15, 1998. o The Annuity Commencement Date is set at February 15, 1998. If you comply with the above requirements, you may elect one of the following before December 31, 1997: o You may request acceleration of the Annuity Commencement Date under your Assured Growth Plan Certificate to a date prior to February 15, 1998, and the greater of the Annuity Account Value and the Guaranteed Period Amount will be applied to the Assured Payment Plan. o You may (subject to applicable age limits) elect to delay the Annuity Commencement Date under your Assured Growth Plan and transfer to a Guarantee Period with an Expiration Date of February 15, 2002 or later. The amount transferred will be the greater of the Annuity Account Value and the Guaranteed Period Amount. If you have not made either election by December 31, 1997, we will send you a letter outlining the options available to you upon the February 15, 1998 Expiration Date. ASSURED PAYMENT PLANS For annual income we offer two forms of Assured Payment Plan, the (Life Annuity with a Period Certain) and the (Period Certain). ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) This version of the Assured Payment Plan provides you with payments for a period certain generally starting within 13 months of the Contract Date and continuing for your lifetime or for your lifetime and the lifetime of a joint Annuitant under the Life Contingent Annuity. You have a choice of level or increasing payments. Payments are made on February 15th of each calendar year. You can also elect to delay the date payments will start under this Assured Payment Plan. If you elect level payments, you may elect to defer the date payments will start for up to five years. If you elect increasing payments, the payment start date may only be deferred for three years. The ability to defer the payment start date may not be available in all states. Based on certain information you provide, your contribution is allocated among the Guarantee Periods and applied to the Life Contingent Annuity and may not be changed (unless a Lump Sum Withdrawal is made). Payments you receive during the period certain represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. A portion of each payment under this Assured Payment Plan will generally be excludable from taxable income until you have received a tax-free recovery of your investment in your Certificate. The Life Contingent Annuity continues lifetime annual payments if you are living at the end of the period certain. Payments continue annually during your lifetime (and the lifetime of the joint Annuitant, if applicable) on the same date of the year as the payments that were made during the period certain. The portion of your contribution applied under the Life Contingent Annuity does not have a Cash Value or an Annuity Account Value and, therefore, does not provide for withdrawals. o Contributions To put a Certificate into effect, you must make a contribution of at least $10,000. You may make subsequent contributions of at least $1,000 at any time up until 45 days before the Annuity Commencement Date. However, if you chose the Assured Payment Plan as an election under the Income Annuity Options from another INCOME MANAGER Annuity Certificate, no subsequent contributions are permitted. o Death Benefit If the Annuitant dies before the Annuity Commencement Date, the Certificate provides a death benefit. The beneficiary will be paid the death benefit which is the greater of the Annuity Account Value and the sum of the Guaranteed Period Amounts in each Guarantee Period. However, if your spouse is the designated beneficiary under the Certificate and you have not elected to delay the payment start date, such beneficiary may elect to receive the annual payments for the period certain starting on the scheduled Annuity Commencement Date, in lieu of taking the death benefit. Unless you have elected a Joint and Survivor form, no payment will be made under the Life Contingent Annuity. 6 If death occurs after the Annuity Commencement Date, payments will continue to be made during the period certain to the designated beneficiary on the same payment basis that was in effect prior to the death. If you have elected a Joint and Survivor form, payments will be made as long as either you or the joint Annuitant is living after the end of the period certain. In lieu of continuing payments during the period certain, the beneficiary may elect to receive a single sum. o Surrendering Your Certificate You may surrender your Certificate for its Cash Value, while it is in effect, and thereafter receive the lifetime income provided by the Life Contingent Annuity. ASSURED PAYMENT PLAN (Period Certain) Under this version of the Assured Payment Plan, you will receive a level stream of annual payments which are fully guaranteed for a period certain which you select. The period certain may be for a duration of from 7 to 15 years. Payments will generally start within 13 months of the Contract Date. The number of years you may select for the period certain may be limited in some states. Based on information you provide, your contribution is allocated among the Guarantee Periods and may not be changed (unless a Lump Sum Withdrawal is made). Payments you receive during the period certain represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. A portion of each payment under this Assured Payment Plan will be excludable from taxable income. o Contributions To put the Certificate into effect, you must make a single contribution of at least $10,000. Subsequent contributions are not permitted. o Death Benefit If the Annuitant dies before the Annuity Commencement Date, the Certificate provides a death benefit. The beneficiary will be paid the death benefit which is the greater of the Annuity Account Value and the sum of the Guaranteed Period Amounts in each Guarantee Period. If the Annuitant dies after the Annuity Commencement Date, payments will continue to be made for the remainder of the period certain to the designated beneficiary on the same payment basis that was in effect at the time of death, or the beneficiary may elect to receive a single sum. OTHER PROVISIONS OF THE ASSURED PAYMENT PLANS O TRANSFERS Transfers are not permitted. o Withdrawals After the first Contract Year and while the Certificate is in effect, you may take a Lump Sum Withdrawal from your Certificate once per Contract Year at any time during such Contract Year. You may request such Lump Sum Withdrawal, which must be in a minimum amount of the greater of $2,000 or 25% of the Cash Value, by submitting a written request in a form satisfactory to us. Lump Sum Withdrawals may result in a market value adjustment and may be subject to a withdrawal charge. Lump Sum Withdrawals will reduce the amount of your future annual payments. o Withdrawal Charge A withdrawal charge is imposed as a percentage of each contribution if a Lump Sum Withdrawal is made, or if the Certificate is surrendered. The withdrawal charge is determined 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 Contact Year in which the Lump Sum Withdrawal is made or the Certificate is surrendered. For each contribution, the Contract Year in which we receive that contribution is "Contract Year 1." FREE LOOK PERIOD You have the right to examine the INCOME MANAGER Certificate for a period of 10 days after you receive it, and to return it to us for a refund. You may cancel it by sending it to our Processing Office. Your refund will equal the Annuity Account Value reflecting any positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. If you elected the Assured Payment Plan (Life Annuity with a Period Certain), your refund will also include any amount applied to the Life Contingent Annuity. 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 Written confirmation of financial transactions. 7 O TOLL-FREE TELEPHONE SERVICES o Call 1-800-789-7771 for a recording of daily 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 SENT BY EXPRESS MAIL: Equitable Life Income Management Group 200 Plaza Drive Secaucus, NJ 07096 SURRENDERING THE CERTIFICATES You may surrender a Certificate and receive the Cash Value at any time while the Annuitant is living and the Certificate is in effect. Withdrawal charges and a market value adjustment may apply. A surrender may also be subject to income tax and tax penalty. INCOME ANNUITY OPTIONS The Assured Growth Plan Certificates provide income annuity options to which amounts may be applied at the Annuity Commencement Date. The income annuity options, including the Assured Payment Plans, are offered on a fixed basis. The Assured Payment Plan Certificates provide the income annuity options to which the beneficary may apply amounts if you die before the Annuity Commencement Date. TAXES Generally, earnings on contributions made to the Certificate will not be included in your taxable income until distributions are made from the Certificate. Distributions prior to your attaining age 59 1/2 may be subject to tax penalty. PREMIUM TAXES Generally, we deduct a charge for any premium taxes from the Annuity Account Value on the Annuity Commencement Date or from your contribution(s) under the Assured Payment Plans. The current premium tax charge that might be imposed varies by state and ranges from 0 to 3.5%; the rate is 1% in Puerto Rico and 5% in the Virgin Islands. 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 787 Seventh Avenue, New York, New York 10019. We are authorized to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico and the Virgin Islands. We maintain local offices throughout the United States. Equitable Life is a wholly owned subsidiary of The Equitable Companies Incorporated (the "Holding Company"). The largest stockholder of the Holding Company is AXA, a French insurance holding company. AXA beneficially owns 60.5% of the Holding Company's outstanding common stock as well as $392.2 million stated value of its issued and outstanding Series E Convertible Preferred Stock. Under its investment arrangements with Equitable Life and the Holding Company, AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable Life. AXA is the principal holding company for most of the companies in one of the largest insurance groups in Europe. The majority of AXA's stock is controlled by a group of five French mutual insurance companies. 8 ------------------------------------------------------------------------------ PART 2: 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 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). 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 such Guarantee Period on such date. Guarantee Periods and Expiration Dates Under the Assured Growth Plan we currently offer Guarantee Periods ending on February 15 for each of the maturity years 1996 through 2005. Under the Assured Payment Plans, Guarantee Periods with maturity years 1996 through 2010 are available. As Guarantee Periods expire, we expect to add maturity years so that generally 10 are available under the Assured Growth Plan and 15 are available under the Assured Payment Plans at any time. On , 1995, a Guarantee Period maturing in calendar year 2006 will become available under the Assured Growth Plan and on , 1995 a Guarantee Period maturing in 2011 will become available under the Assured Payment Plans. However, these two Guarantee Periods will not be available in Florida until February 15, 1996. On January 1, 1996, the Guarantee Period expiring on February 15, 1996 will no longer be available for new allocations. The number of Guarantee Periods available for allocation may be limited in some states. See "Assured Growth Plan," "Allocation of Contributions," "Allocation Restrictions" in Part 3 for limitations on allocation to Guarantee Periods based on Annuitant's age. 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 Under the Assured Growth Plan, the Guarantee Period has an Expiration Date beyond your 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 October , 1995 and the related price per $100 of Maturity Value for each currently available Guarantee Period were as follows:
GUARANTEE PERIODS WITH EXPIRATION DATE GUARANTEED RATE FEBRUARY 15 OF AS OF OCTOBER , PRICE PER $100 OF MATURITY YEAR 1995 MATURITY VALUE ------------------- --------------- ------------------ 1996 x.xx% $xx.xx 1997 x.xx xx.xx 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 2008 x.xx xx.xx 2009 x.xx xx.xx 2010 x.xx xx.xx
9 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 15 of each of years 1997 through 2001, then according to the above table the lump sum contribution you would have to make as of October , 1995 would be $xxx.xx (i.e., the sum of the price per $100 of Maturity Value for each maturity year from 1997 through 2001). The above table is provided to illustrate the use of present value calculations. It does not take into account withdrawals and withdrawal charges or transfers among Guarantee Periods. Actual calculations will also be based on Guaranteed Rates on each actual Transaction Date, which may differ. MARKET VALUE ADJUSTMENT FOR TRANSFERS, WITHDRAWALS OR SURRENDER PRIOR TO THE EXPIRATION DATE Any withdrawal (including transfers, surrenders 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 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 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 the Appendix 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% annually. 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. INVESTMENTS Contributions received under the Certificates and allocated to Guarantee Periods will be held in a "nonunitized" separate account established by Equitable Life under the laws of New York. A nonunitized separate account is a separate account in which the Certificate Owner has no claim on, or participation in the performance of, the assets held in the account. 10 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. 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 our general account. For a discussion of the Life Contingent Annuity see "Payments After the Period Certain," in Part 3. 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 (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. 11 ------------------------------------------------------------------------------ PART 3: PROVISIONS OF THE ASSURED GROWTH PLAN AND THE ASSURED PAYMENT PLANS ------------------------------------------------------------------------------ The INCOME MANAGER Certificates described in this prospectus are designed to provide retirement income under one of three plans: the Assured Growth Plan, the Assured Payment Plan (Life Annuity with a Period Certain) and the Assured Payment Plan (Period Certain). We also have a special limited time offer Flexible Income Program under which you can convert your Assured Growth Plan into guaranteed income for life under the Assured Payment Plan (Life Annuity with a Period Certain). ASSURED GROWTH PLAN Under the Assured Growth Plan (available for Annuitant issue ages 20 to 78) amounts accumulate on a tax-deferred basis until the Annuity Commencement Date. You design your own investment program selecting one or more of the Guarantee Periods. Transfers among the Guarantee Periods may be made according to our rules described below. You can decide when and if to apply amounts to the Assured Payment Plan or another income annuity option. See "Income Annuity Options" in Part 4 and "Assured Payment Plans" below. CONTRIBUTIONS The initial contribution under the Assured Growth Plan must be at least $10,000. You may make subsequent contributions in an amount of at least $1,000. Subsequent contributions under this plan may no longer be made once the Annuitant reaches age 78. We may refuse to accept any contribution if the sum of all contributions received under a Certificate would then total more than $1,500,000. ALLOCATION OF CONTRIBUTIONS You have two options from which to choose for allocation of your contributions: Self-Directed Allocation and Principal Assurance Withdrawals Allocation. Self-Directed Allocation You design your own investment program by allocating your contributions among the Guarantee Periods in any way you choose. We allocate your initial contribution among the Guarantee Periods according to your instructions. You must provide allocation instructions for each subsequent contribution. If we do not receive subsequent instructions from you, your entire subsequent contribution will be allocated to the Guarantee Period with the earliest Expiration Date. You may choose to invest in one or up to all available Guarantee Periods at the same time. Allocations must be in whole percentages, and are subject to the restrictions under "Guarantee Periods and Expiration Dates" in Part 2 and other restrictions described below. Principal Assurance Withdrawals Allocation If you elect this option, we will allocate your initial contribution for you among serially maturing Guarantee Periods based on selections that you make. See "Principal Assurance Withdrawals" below. Allocation Restrictions Under the Assured Growth Plan allocations to Guarantee Periods are limited for Annuitants ages 71 and above as follows: For ages 71 through 74, allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which the Annuitant will attain age 80. For Annuitants ages 75 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 Annuity Commencement Date. TRANSFERS After the first Contract Year and prior to the Annuity Commencement Date, you may transfer funds among the Guarantee Periods once per Contract Year. Transfers are subject to the restrictions above and as set forth under "Guarantee Periods and Expiration Dates" in Part 2 and must be in an amount of at least $2,000, or the entire Annuity Account Value in a Guarantee Period, if less. A transfer request will be effective on the Transaction Date and transfers from a Guarantee Period, other than on the Expiration Date, will result in a market value adjustment (either positive or negative) as of the Transaction Date. All transfers among the Guarantee Periods will be confirmed in writing. Transfer requests must be made directly to our Processing Office. Your request for a transfer should 12 ------------------------------------------------------------------------------ ASSURED GROWTH PLAN (CONTINUED) ------------------------------------------------------------------------------ specify your Certificate number, the amounts or percentages to be transferred and the Guarantee Period(s) 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. OPTIONS AT EXPIRATION DATE OF A GUARANTEE PERIOD 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 under "Guarantee Periods and Expiration Dates" in Part 2 and "Allocation Restrictions" above: (a) to transfer the Maturity Value into any Guarantee Period we are then offering; 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. WITHDRAWALS The Assured Growth Plan is an annuity contract, even though you may elect to receive your benefits in a non-annuity form. You may withdraw funds from your Certificate before the Annuity Commencement Date and while the Annuitant is alive. You may withdraw an amount equal to the 10% free corridor amount without incurring a withdrawal charge. 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 Withdrawals, Transfers or Surrender Prior to the Expiration Date" in Part 2. Withdrawals may be taxable and subject to tax penalty (as a deterrent to early withdrawal, generally prior to age 59 1/2 ). We may also be required to withhold income taxes from the amount distributed. See "Part 5: Tax Aspects of the Certificates." The methods for withdrawing funds under the Assured Growth Plan are listed below. o LUMP SUM WITHDRAWALS--After the first Contract Year, you may take one withdrawal per Contract Year at any time during such Contract Year in an amount of at least $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 in a form satisfactory to us which specifies the Guarantee Periods 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. o PRINCIPAL ASSURANCE WITHDRAWALS--This option is designed to provide you with (i) level annual withdrawals for calendar years that you select, plus (ii) a Maturity Value equal to your original contribution in the last calendar year that you select. To achieve this result, you select a calendar year in which you wish to receive the last withdrawal. Such year must not be later than 10 years nor earlier than seven years from the date of your election. You also select the year in which the withdrawals will begin. However, such withdrawals must be for a period of at least five consecutive years. If Principal Assurance Withdrawals are elected at issue of the Certificate, based on the above information and the amount of your initial contribution, your entire contribution will be allocated by us. A portion of such contribution will be allocated among Guarantee Periods serially maturing in the years you select, including the last year. The level annual withdrawals represent distributions of the Maturity Values of these serially maturing Guarantee Periods on their Expiration Dates. An 13 ------------------------------------------------------------------------------ ASSURED GROWTH PLAN (CONTINUED) ------------------------------------------------------------------------------ additional amount is allocated to the Guarantee Period with an Expiration Date in the last calendar year. This represents the balance of your initial contribution. The Maturity Value in this Guarantee Period on the Expiration Date will equal your initial contribution plus your final level annual withdrawal. You have the option of withdrawing or transferring the amount which is equal to your initial contribution to another Guarantee Period available at that time. If Principal Assurance Withdrawals are elected at any time after issue of the Certificate, based on the information you provide as described above, your entire Annuity Account Value will be allocated by us among the Guarantee Periods. You may elect Principal Assurance Withdrawals at any time by submitting a request satisfactory to us. Principal Assurance Withdrawals will be terminated if: (i) you cancel these withdrawals at any time by sending a written request satisfactory to us; (ii) you request a transfer of your Annuity Account Value which was allocated under the Principal Assurance Withdrawals option; or (iii) you make a Lump Sum Withdrawal. Any subsequent contributions you make while under Principal Assurance Withdrawals will be allocated to the Guarantee Period with the latest Expiration Date you have elected. Alternatively, you may elect to have your subsequent contributions allocated to any one or more Guarantee Periods with Expiration Dates beyond the last calendar year you selected for your Principal Assurance Withdrawals. For any subsequent contribution equal to $10,000 or more, you may request to have your Principal Assurance Withdrawals redesigned. DEATH BENEFIT When the Annuitant Dies Generally, upon receipt of proof satisfactory to us of the Annuitant's death before the Annuity Commencement Date, we will pay the death benefit to the beneficiary named in your Certificate. See "Beneficiary" in Part 4. 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. See "How Payment is Made" below. The death benefit is equal to the Annuity Account Value, or if greater, the sum of the Guaranteed Period Amounts in each Guarantee Period. See "Guarantee Periods" in Part 2. 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 of our Assured Payment Plans or to one or more income annuity options offered by Equitable Life. See "Income Annuity Options" in Part 4. Such an election when made on a timely basis, can defer otherwise taxable income. See "Death Benefits" in Part 5. 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 the sole primary beneficiary and to be the successor Annuitant/Certificate Owner, then no death benefit is payable until your surviving spouse's death. WHEN THE CERTIFICATE OWNER DIES BEFORE THE ANNUITANT If you are the Certificate Owner but 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 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. 14 ------------------------------------------------------------------------------ ASSURED GROWTH PLAN (CONTINUED) ------------------------------------------------------------------------------ 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 income annuity options. See "Income Annuity Options" in Part 4. We will usually pay the Cash Value within seven calendar days, but we may delay payment as described in "When Payments are Made" in Part 4. For the tax consequences of surrenders, see "Part 5: Tax Aspects of the Certificates." The 10% free corridor amount is not applicable to a surrender. 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 5: Tax Aspects of the Certificates." WITHDRAWAL CHARGE A withdrawal charge will be imposed as a percentage of each contribution made to the extent that a Lump Sum Withdrawal exceeds the free corridor amount, or if the Certificate is surrendered to receive its Cash Value. While Principal Assurance Withdrawals are in effect, a withdrawal charge, if any, will apply to all Lump Sum Withdrawals. 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 Lump Sum 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 Guarantee Periods from which each such withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. Free Withdrawal Amount (Free Corridor) No withdrawal charge will be applied during any Contract Year in which the amount withdrawn does not exceed 10% of the Annuity Account Value at the beginning of the Contract Year minus any amount previously withdrawn during that Contract Year. The 10% maximum is called the free corridor amount. There will be no free corridor while Principal Assurance Withdrawals are in effect. The 10% 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, for purposes of calculating taxable income on a pre- annuitization withdrawal the Federal income tax law treats earnings as withdrawn first. See "Part 5: Tax Aspects of the Certificates." The withdrawal charge is to help cover sales expenses. This charge will not be increased for the life of the Certificates. We may reduce this charge under group or sponsored arrangements. See "Group or Sponsored Arrangements" in Part 4. FLEXIBLE INCOME PROGRAM* This special offer is available on applications for the Assured Growth Plan received by us from the date of this prospectus through December 31, 1995, with the Assured Payment Plan (Life Annuity with a Period Certain), described below, elected as your Income Annuity Option. The Flexible Income Program is available subject to the following: o You are the Owner and the Annuitant, and are between the ages of 59 1/2 and 78. o All contributions are invested in the Guarantee Period with an Expiration Date of February 15, 1998. --------- * May not be available in all states. 15 ------------------------------------------------------------------------------ ASSURED GROWTH PLAN (CONTINUED) ------------------------------------------------------------------------------ o The Annuity Commencement Date of your Assured Growth Plan Certificate is set at February 15, 1998. If you comply with the above requirements, you may elect one of the following on or before December 31, 1997: o You may request acceleration of the Annuity Commencement Date under your Assured Growth Plan Certificate to a date prior to February 15, 1998, and the greater of the Annuity Account Value and the Guaranteed Period Amount will be applied to the Assured Payment Plan. Because no negative market value adjustment will apply, you will be able to take advantage of any increase in Guaranteed Rates offered under the Assured Payment Plan during this period. The withdrawal charge applied under the Assured Payment Plan will be based on the original issue date of your Assured Growth Plan Certificate. o You may (subject to applicable age limits) elect to delay the Annuity Commencement Date under your assured Growth Plan Certificate and transfer to a Guarantee Period with an Expiration Date of February 15, 2002 or later. The amount transferred will be the greater of the Annuity Account Value and the Guaranteed Period Amount. Any other transfer will terminate the Flexible Income Program and regular Assured Growth Plan provisions will apply. The effect of using the greater of the Annuity Account Value and the Guaranteed Period Amount is that if applicable interest rates have increased, there will be no negative market value adjustment. If you have not elected to accelerate the Annuity Commencement Date or made a transfer by December 31, 1997, we will send you a letter on that date outlining the options available to you upon the February 15, 1998 Expiration Date of the Guarantee Period. The options are as follows: o You may confirm that the Assured Payment Plan applied for should be put into effect. At this point you have the option of changing the form of the Assured Payment Plan (i.e., single life or joint and survivor, date payments are to start, length of period certain, etc.) you initially elected. On February 15, 1998 the Maturity Value in the Guarantee Period under the Assured Growth Plan will be applied to the Assured Payment Plan. The first payment under the Assured Payment Plan will be February 15, 1999, unless otherwise elected. o You may elect to have the Maturity Value on the Expiration Date applied to certain other annuity forms that we offer at that time. o You may elect to defer the Annuity Commencement Date under your Assured Growth Plan Certificate, subject to our maximum age limits. If you make such an election, you must specify the Guarantee Period(s) to which the Maturity Value in the expired Guarantee Period should be transferred; if not specified, the Maturity Value will be transferred into the Guarantee Period with the earliest Expiration Date. In any event if we have not received notification of your election by February 14, 1998, the Maturity Value will be applied to the Assured Payment Plan based on your initial election in the application. If you take a Lump Sum Withdrawal prior to the time payments start under the Assured Payment Plan or under any annuity payout option, such withdrawal will be treated for tax purposes like any other withdrawal under the Assured Growth Plan. ASSURED PAYMENT PLANS We offer two forms of the Assured Payment Plan from which you may choose to receive your retirement income. The Assured Payment Plan (Life Annuity with a Period Certain) and the Assured Payment Plan (Period Certain). Both plans are described below. ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) This Assured Payment Plan is an annuity designed to provide lifetime payments, with a period certain, with payments generally starting within 13 months of the Contract Date. However, if you elect level payments (described below), you may elect to defer the date payments will start for up to five years. If you elect increasing payments (described below), the payment start date may only be deferred for three years. The ability to defer the payment start date may not be available in all states. This version of the Assured Payment Plan is designed to provide you with guaranteed annual pay- 16 ------------------------------------------------------------------------------ ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) (CONTINUED) ------------------------------------------------------------------------------ ments on a Single Life basis or a Joint and 100% to Survivor basis. It may also provide payments on a Joint and one-half to Survivor or a Joint and two- thirds to Survivor basis. This Assured Payment Plan is available at issue ages 59 1/2 through 83. It is also available at issue ages as young as 54 1/2 provided payments do not start before you attain age 59 1/2 . CONTRIBUTIONS Your initial contribution must be at least $10,000. You may make subsequent contributions of at least $1,000 at any time up until 45 days before the Annuity Commencement Date. However, if your Assured Payment Plan resulted from an election under the Income Annuity Options from another INCOME MANAGER Certificate, no subsequent contributions are permitted. ALLOCATION OF CONTRIBUTIONS Based on the amount of your contribution, your age and sex (and the age and sex of the joint Annuitant, if the Joint and Survivor is elected), the form of annuity and the period certain you select, your contribution is allocated by us among the Guarantee Periods and the Life Contingent Annuity and may not be changed by you. Any subsequent contributions will also be allocated by us to the Guarantee Periods and the Life Contingent Annuity. PERIOD CERTAIN PAYMENTS The annual payments you receive during the period certain you select represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. These payments are designed to pay out the entire Annuity Account Value by the end of the period certain. All payments committed to be paid out must be paid out as the Guarantee Periods serially mature. Unlike the Principal Assurance Withdrawals described above under the Assured Growth Plan, once commenced, these level annual payments occur automatically through income payments to you and may not be stopped. Unlike some annuities that provide periodic payments, you will be able to make Lump Sum Withdrawals or surrender the Certificate for its Cash Value prior to the end of the period certain. You may elect to receive level annual payments during the period certain and under the Life Contingent Annuity. Or, you may elect to receive payments that increase. If you elect the increasing payments, during the period certain, payments increase by 10% every three years. After the end of the period certain, payments continue under the Life Contingent Annuity. Your first payment under the Life Contingent Annuity will be 10% greater than the final payment under the period certain. A portion of each payment under the Assured Payment Plan is excluded from taxable income until the total amount of your investment in the contract has been recovered. If you elect level payments, you may elect a period certain of not less than 7 years nor more than 15 years. If you elect increasing payments, you may elect a period certain of 6, 9, 12 or 15 years. For issue ages up to and including age 70 the maximum period certain is 15 years; for issue ages 71 through 75 the maximum period certain is 85 less the issue age; for issue ages 76 through 80, the maximum period certain is 10 years; for issue ages 81 through 83, the maximum period certain is 90 less the issue age. The minimum and maximum period certain permitted will be reduced by each year you defer the date your payments will start. The maximum period certain permissible may also be limited in some states. PURCHASE RESTRICTIONS FOR JOINT & SURVIVORS Under the Joint and Survivor forms: (i) for purposes of the above limitations, we use the age of the younger Annuitant; (ii) neither you nor the joint Annuitant can be over age 83; (iii) the Joint and 100% to Survivor form is only available for the longest period certain permitted. PAYMENTS AFTER THE PERIOD CERTAIN The Life Contingent Annuity continues lifetime annual payments if you are living at the end of the period certain. Payments continue annually during your lifetime (and the lifetime of the joint Annuitant, if applicable) on the same date of the year as the payments that were made during the period certain. The portion of your contribution applied under the Life Contingent Annuity does not have a Cash Value or an Annuity Account Value and, therefore, does not provide for withdrawals. 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 17 ------------------------------------------------------------------------------ ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) (CONTINUED) ------------------------------------------------------------------------------ Life or a Joint and 100% to Survivor basis. If you elect increasing payments, your first payment under the Life Contingent Annuity will be 10% greater than the final payment under the period certain. Thereafter, payments will increase annually based on the increase in the Consumer Price Index, but in no event greater than 3% per year nor less than 0%. The Life Contingent Annuity may also provide payments on a Joint and one-half to Survivor or a Joint and two-third to Survivor basis. ALLOCATION OF LUMP SUM WITHDRAWALS If you take a Lump Sum Withdrawal a portion of such Lump Sum Withdrawal may be excludable from taxable income. Withdrawals will be taken from all remaining Guarantee Periods to which your Annuity Account Value is allocated such that the amount of the annual payments and the length of the period certain will be reduced, and the date payments under the Life Contingent Annuity are to start will be accelerated. Additional amounts above the amount of the requested withdrawal will be withdrawn from the Guarantee Periods 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. Example The example below illustrates the effect of a Lump Sum Withdrawal. This example assumes a single contribution of $100,000 is paid on February 15, 1995, which purchases level annual payments of $8,740 for a male and female, both age 70, on a Joint and two-thirds to Survivor basis with a period certain of 15 years. It assumes a Lump Sum Withdrawal at the beginning of the fourth Contract Year of 25% of an Annuity Account Value of $71,126 at which time the Annuitants are age 73. The requested withdrawal amount would be $17,781 ($71,126 x .25). The withdrawal charge would be $711 ($17,781 x .04). The Annuity Account Value after the withdrawal is $52,634 ($71,126 -$17,781 -$711). The payments would be reduced to $7,094 and the remaining period certain would be reduced to 10 years from 12. DEATH BENEFIT Before the Annuity Commencement Date Upon receipt of proof satisfactory to us of your death before the Annuity Commencement Date the death benefit will be paid to the beneficiary named in your Certificate. See "Beneficiary" in Part 4. The death benefit is the greater of the Annuity Account Value and the sum of the Guaranteed Period Amounts in each Guarantee Period. However, if your spouse is the designated beneficiary under the Certificate and you have not elected to defer the date payments are to start, such beneficiary may elect to receive the annual payments for the period certain starting on the scheduled Annuity Commencement Date, in lieu of taking the death benefit. If you have elected to defer the date payment will start your spouse also has to have been named successor Annuitant/ Certificate Owner in order to elect the payments in lieu of the death benefit. Unless you have elected a Joint and Survivor form, no payment will be made under the Life Contingent Annuity. The death benefit payable relates only to the Guarantee Periods; a death benefit is never payable under the Life Contingent Annuity. 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" in Part 4. Such an election when made on a timely basis, can defer otherwise taxable income. See "Death Benefits" in Part 5. Note that only a life annuity or an annuity that does not extend beyond the life expectancy of the beneficiary may be elected. After the Annuity Commencement Date If death occurs after the Annuity Commencement Date, payments will continue to be made during the period certain to the designated beneficiary on the same payment basis that was in effect prior to the death. If you have elected a Joint and Survivor form, payments will be made as long as either you or the joint Annuitant is living after the end of the period certain. The designated beneficiary and the joint Annuitant must be the same person. In lieu of continuing payments during the period certain, the beneficiary may elect to receive a single sum. If a single sum is elected within one year from the date of death, the single sum will be equal to the Annuity Account Value, or if greater, the sum of the Guaranteed Period Amounts in each Guarantee Period. 18 ------------------------------------------------------------------------------ ASSURED GROWTH PLAN (Life Annuity with a Period Certain) (CONTINUED) ------------------------------------------------------------------------------ After one year, the beneficiary may surrender the Certificate and receive the Cash Value. If a single sum is elected and there is a joint Annuitant, the date payments are to start under the Life Contingent Annuity will be accelerated so that payments will be made in reduced amounts. SURRENDERING THE CERTIFICATES You may surrender the Certificate for its Cash Value at any time while it is in effect, and thereafter receive the lifetime income provided by the Life Contingent Annuity. The date payments are to start under the Life Contingent Annuity will be accelerated to the date when the next payment was to be received under the period certain and such payments will be made in reduced amounts. Once your Certificate has been surrendered, it will be returned to you with a notation that the Life Contingent Annuity is still in effect. The Life Contingent Annuity cannot be surrendered. ASSURED PAYMENT PLAN (Period Certain) This version of the Assured Payment Plan is an immediate annuity (available at issue ages 59 1/2 through 78) which is designed to provide a level stream of guaranteed annual payments for a period certain of not less than 7 years nor more than 15 years. At issue ages over 70, the maximum period certain is age 85 less the issue age. The number of years you may select for the period certain may also be limited in some states. Payments will generally start within 13 months of the Contract Date. The level annual payments you receive during the period certain represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. A portion of each payment will be excluded from taxable income. CONTRIBUTION Under this Assured Payment Plan your single contribution must be at least $10,000. You may not make subsequent contributions under this plan. We may refuse to accept any contribution in excess of $1,500,000. ALLOCATION OF CONTRIBUTION Based on the amount of your contribution and the period certain you select, your contribution is allocated by us among the Guarantee Periods and may not be changed by you, such that you are assured a level stream of annual payments. Your contribution will earn the Guaranteed Rates for the specified Guarantee Periods offered on the Transaction Date. The following example illustrates a ten year level stream of annual payments, each in the amount of $10,000, purchased on October , 1995 under the Assured Payment Plan with the first payment on February , 1996. To achieve this result, a single contribution of $xx,xxx.xx is required, and is allocated among the Guarantee Periods as indicated below.
FEBRUARY 15, OF CALENDAR PRICE PER $100 OF ALLOCATION OF YEAR PAYMENT MATURITY VALUE CONTRIBUTION ------------- --------- ----------------- --------------- 1996 $10,000 $xx.xx $x,xxx.xx 1997 10,000 xx.xx x,xxx.xx 1998 10,000 xx.xx x,xxx.xx 1999 10,000 xx.xx x,xxx.xx 2000 10,000 xx.xx x,xxx.xx 2001 10,000 xx.xx x,xxx.xx 2002 10,000 xx.xx x,xxx.xx 2003 10,000 xx.xx x,xxx.xx 2004 10,000 xx.xx x,xxx.xx 2005 10,000 xx.xx x,xxx.xx --------------- Total $xx,xxx.xx
ALLOCATION OF LUMP SUM WITHDRAWALS Lump Sum Withdrawals will be taken pro rata from all unmatured Guarantee Periods so that annual payments will continue in reduced level amounts over the remaining term of the period certain. DEATH BENEFIT Upon receipt of proof satisfactory to us of your death before the Annuity Commencement Date, we will pay the death benefit described under "Assured Payment Plan (Life Annuity with a Period Certain)," "Death Benefit" above. If death occurs after the Annuity Commencement Date, payments will continue to be made to the designated beneficiary on the same payment basis that was in effect prior to your death. See "Beneficiary" in Part 4. At the beneficiary's option, payments may be discontinued and paid in a single sum. If the single sum is elected within one year of your death, the single sum will be equal to the Annuity Account Value, or if greater, the sum of the Guaranteed Period Amounts in each Guarantee Period. After the one year period, the beneficiary may surrender the Certificate and receive the Cash Value. OTHER PROVISIONS OF THE ASSURED PAYMENT PLANS TRANSFERS No transfers are permitted under the Assured Payment Plans. 19 ------------------------------------------------------------------------------ OTHER PROVISIONS OF THE ASSURED PAYMENT PLANS (CONTINUED) ------------------------------------------------------------------------------ LUMP SUM WITHDRAWALS After the first Contract Year, you may take a Lump Sum Withdrawal once per Contract Year at any time during such Contract Year. You may request such withdrawal by submitting a written request on a form satisfactory to us. The minimum amount of a Lump Sum Withdrawal is the greater of $2,000 and 25% of the Cash Value. 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. ASSIGNMENT Certificates purchased under the Assured Payment Plan may not be assigned. 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 the Certificate is in effect. 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. We will usually pay the Cash Value in a single sum payment within seven calendar days, but we may delay payment as described in "When Payments are Made" in Part 4. For the tax consequences of surrenders, see "Part 5: Tax Aspects of the Certificates." WITHDRAWAL CHARGE A withdrawal charge will be imposed as a percentage of each contribution for Lump Sum Withdrawals, or if the Certificate is surrendered to receive the 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 Lump Sum 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 Guarantee Periods from which each such Lump Sum Withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. For each contribution, the applicable withdrawal charge will be imposed during the seven Contract Years for Lump Sum Withdrawals, until the sum of all such Lump Sum Withdrawals equals the total amount of each contribution received and allocated to the Guarantee Periods. 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 5: Tax Aspects of the Certificates." The withdrawal charge is to help cover sales expenses. This charge will not be increased for the life of the Certificates. We may reduce this charge under group or sponsored arrangements. See "Group or Sponsored Arrangements" in Part 4. Assured Payment Plan (Life Annuity with a Period Certain) A Certificate Owner of the Assured Growth Plan or certain other INCOME MANAGER Certificates that we offer may apply the Annuity Account Value to purchase the Assured Payment Plan (Life Annuity with a Period Certain) provided the issue age and payment restrictions for the Assured Payment Plan are met. If the Annuity Account Value is applied from an Assured Growth Plan or other 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 the Annuity Account Value is applied from the Assured Growth Plan or other Certificate when the dollar amount of the withdrawal charge is 2% or less, 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. 20 ------------------------------------------------------------------------------ OTHER PROVISIONS OF THE ASSURED PAYMENT PLANS (CONTINUED) ------------------------------------------------------------------------------ Assured Payment Plan (Period Certain). A Certificate Owner of the Assured Growth Plan or other INCOME MANAGER Certificates may apply the Annuity Account Value to purchase this Assured Payment Plan once withdrawal charges are no longer in effect under the Assured Growth Plan or such other INCOME MANAGER Certificates. No with- drawal charges will apply under the Assured Payment Plan Certificate. To purchase an Assured Payment Plan, we require the return of the original Assured Growth Plan Certificate. An Assured Payment Plan Certificate will be issued putting this annuity form into effect. [/R] 21 ------------------------------------------------------------------------------ PART 4: OTHER PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE ------------------------------------------------------------------------------ The provisions of your Certificate may be restricted by applicable laws or regulations. Except as otherwise noted, all of the following provisions are applicable to both the Assured Growth Plan and the Assured Payment Plan. 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. Contributions are credited as of the Transaction Date. 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. 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 with immediate notification to the broker-dealer. After your Certificate has been issued, subsequent contributions under the Assured Growth Plan may be transmitted by wire. FREE LOOK PERIOD You have the right to examine the INCOME MANAGER 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 positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. Under the Assured Payment Plan (Life Annuity with a Period Certain) your refund will also include any amount applied to the Life Contingent Annuity. Some states may require that we calculate the refund differently. We follow these same procedures if you change your mind before a Certificate has been issued, but after a contribution has been made. See "Part 5: 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 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 Annu- 22 ity Account Value in the Guaranteed Period Account will equal the Maturity Value. See "Part 2: The Guaranteed Period Account." CASH VALUE The Cash Value under the Certificate reflects any upward or downward market value adjustment. See "Part 2: The Guaranteed Period Account." On any 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 "Surrendering the Certificates to Receive the Cash Value," and "Withdrawal Charge" in Part 3. WHEN PAYMENTS ARE MADE We can defer payment of any portion of the Annuity Account Value 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. BENEFICIARY 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. INCOME ANNUITY OPTIONS An annuity form of payment or "annuitization" pays out contributions and earnings under the Certificate in installments over a specified period of time which may be fixed or may be based on the Annuitant's life. Annuitization payments are calculated as of the Annuity Commencement Date, which is on file with our Processing Office. Under the Assured Growth Plan 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, no Annuity Commencement Date under the Assured Growth Plan will be later than the February 15 which follows the Contract Date anniversary following the Annuitant's 85th birthday. Under the Assured Growth Plan, before the Annuity Commencement Date, we will send a letter advising that annuity benefits may be elected. 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 2. Under the Assured Payment Plans, if you die before the Annuity Commencement Date, the beneficiary may elect to apply the death benefit to an income annuity option. Only a life annuity or an annuity that does not extend beyond the life expectancy of the beneficiary may be elected. 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. o Joint and Survivor Life Annuity: This annuity form guarantees life income to you and, after your death, continuation of income to the survivor. o Assured Payment Plan: one of the series of INCOME MANAGER annuities which offers both income and access to the Cash Value. If you are 23 the Owner and Annuitant of an Assured Growth Plan Certificate, you may at any time apply your Annuity Account Value to purchase the Assured Payment Plan (Life Annuity with a Period Certain) described below, provided you meet the issue age and payment restrictions for an Assured Payment Plan. If the Annuity Account Value is applied from an Assured Growth Plan 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 the Annuity Account Value is applied from the Assured Growth Plan when the dollar amount of the withdrawal charge is 2% or less, 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) described below, once withdrawal charges under the Assured Growth Plan are no longer in efffect. No withdrawal charges will apply under the Assured Payment Plan Certificate. Amounts may be applied from the Assured Growth Plan to the Assured Payment Plan under our special offer. See "Flexible Income Program" in Part 3. 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 Certificate offers the income annuity options outlined above in fixed form. Fixed annuity payments are guaranteed by us and will be based on the tables of guaranteed annuity payments in your Certificate or on our then current annuity rates, whichever is more favorable for the Annuitant. For all Annuitants, the normal form of annuity provides for fixed payments. We may offer other forms not outlined here. 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. DISTRIBUTION OF THE CERTIFICATES Equitable Distributors, Inc. (EDI), an indirect wholly owned subsidiary of Equitable Life, has responsibility for sales and marketing functions and may be deemed to be the distributor of the Certificates. 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 787 Seventh Avenue, New York, New York 10019. The Certificates will be sold by registered representatives of EDI and its affiliates, who are also our licensed insurance agents, as well as by unaffiliated broker-dealers with which EDI has entered into selling agreements. Broker- dealer sales compensation (including for EDI and its affiliates) will not exceed five 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. PREMIUM TAXES Generally, we deduct any applicable charges for state and local taxes from the amount applied to provide an income annuity option under the Assured Growth Plan. In certain states, however, we may deduct the charge for taxes when contributions are made rather than at the Annuity Commencement Date and for amounts applied under the Assured Payment Plan. The current premium tax charge that might be imposed varies by state and ranges from 0% to 3.5%; the rate is 1% in Puerto Rico and 5% in the Virgin Islands. 24 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 increase Guaranteed Rates for the Guarantee Periods and under the Assured Payment Plans, reduce purchase rates for the Life Contingent Annuity. 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 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. 25 ------------------------------------------------------------------------------ PART 5: 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 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 INCOME MANAGER 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 INCOME MANAGER Certificates to qualify as an "annuity" for purposes of Federal income tax law. Annuity contract payments are taxable as ordinary income and are subject to income tax withholding. See "Federal and State Income Tax Withholding" below. 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 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; (2) 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 (3) 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. Withdrawals Under the Assured Growth Plan and the Assured Payment Plans Prior to the Annuity Commencement Date, any withdrawals (withdrawals which do not terminate your total interest in the Certificate) are taxable to you 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. You should discuss with your tax adviser the effect of any surrender or withdrawal under an Assured Payment Plan. Annuity Payments Under the Assured Growth Plan and the Assured Payment Plans Once annuity payments begin (whether under one of the Assured Payment Plans or under another income annuity option), 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 life annuity, after the total investment in the contract 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. Taxation of Lump Sum Withdrawals Made After Payments Have Commenced Under the Assured Payment Plan If your Lump Sum Withdrawal terminates all periodic payments due, it will be taxable as a complete surrender as discussed above. If you make a Lump Sum Withdrawal under one of the Assured Payment Plans which does not terminate all periodic payments due, then a portion of the remaining reduced 26 payments will be eligible for tax-free recovery of investment. You should discuss with your tax adviser the taxation of any surrender or withdrawal of Cash Value. Penalty Tax In addition to income tax, a penalty tax of 10% applies to the taxable portion of a distribution unless the distribution is (1) made on or after the date you attain age 59 1/2 , (2) made on or after your death, (3) attributable to your disability, (4) is part of a series of substantially equal installments as an annuity for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and a beneficiary, (5) with respect to income allocable to amounts contributed to an annuity certificate or contract prior to August 14, 1982 which are transferred to the Certificate in a tax-free exchange, or (6) payments under an immediate annuity. An immediate annuity is generally an annuity which commences payments within one year from purchase and provides for a series of substantially equal periodic payments made at least annually. Death Benefits If, as a result of the Annuitant's death, the beneficiary is entitled to receive the death benefit described in Part 3, the beneficiary is generally subject to the same tax treatment as would apply to you. If the beneficiary takes the death benefit in a single sum, the beneficiary is treated as if the Certificate had been surrendered. The tax computation will reflect your investment in the Certificate. If the beneficiary elects to take the death benefit in the form of a life income or installment option including exercising an option to take Assured Payment Plan payments, the election should be made within 60 days after the day on which a single sum death benefit first becomes payable and before any benefit is actually paid. The taxable income that would otherwise occur on a deemed surrender of the Certificate, will be deferred, and payments will be taxed as described above under "Annuity Payments Under the Assured Growth Plan and the Assured Payment Plans." 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 annuity income tax withholding will apply to payments from the Certificates made 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. A recipient of periodic payments (e.g., monthly or annual payments) which total less than a certain Federal minimum ($13,900 taxable amount per year for 1995) will generally be exempt from the Federal income tax withholding rules, unless the recipient elects to have tax withheld. A recipient of periodic payments which equal or exceed the Federal minimum ($13,900 taxable amount for 1995) will generally be 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. A withholding election may be revoked at any time and remains effective until revoked. 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. 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. 27 GENERATION SKIPPING TAX 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 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. 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. 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. SPECIAL RULES FOR CERTIFICATES ISSUED IN PUERTO RICO Under current law Equitable Life treats income from Assured Growth Plan and Assured Payment Plan 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 Assured Growth Plan and Assured Payment Plan 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. TRANSFERS AMONG GUARANTEE PERIODS Under the Assured Growth Plan, transfers among the Guarantee Periods are not taxable. No transfers are allowed under the Assured Payment Plan. 28 ------------------------------------------------------------------------------ PART 6: INDEPENDENT ACCOUNTANTS ------------------------------------------------------------------------------ The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the years ended December 31, 1994 and 1993 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. The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the year ended December 31, 1992 included in Equitable Life's Annual Report on Form 10-K, incorporated by reference in the prospectus, have been examined by Deloitte & Touche 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 Deloitte & Touche LLP given upon their authority as experts in accounting and auditing. 29 APPENDIX: 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, 1996 to a Guarantee Period with an Expiration Date of February 15, 2005 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, 2000.
ASSUMED GUARANTEED RATE ON FEBRUARY 15, 2000 ---------------------- 5.00% 9.00% ---------- ---------- As of February 15, 2000 (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, 2000 (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. 30 INCOME MANAGERSM PROSPECTUS FOR ASSURED PAYMENT PLANS -------------------- DATED OCTOBER , 1995 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 an annuity contract (INCOME MANAGER) 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." INCOME MANAGER Certificates described in this prospectus are used for after-tax contributions to a non-qualified annuity. A minimum contribution of $10,000 is required to put a Certificate into effect. The INCOME MANAGER is a family of annuities designed to provide retirement income. Under the INCOME MANAGER annuities described in this prospectus, the Owner (CERTIFICATE OWNER, YOU and YOUR) may choose to receive guaranteed periodic payments under one of our ASSURED PAYMENT PLANS. You may choose to receive level guaranteed payments payable for a specified period (PERIOD CERTAIN) with payments generally starting within 13 months. Or, you may choose to receive level or increasing guaranteed payments for a specified period of time, and continuing for life thereafter (LIFE ANNUITY WITH A PERIOD CERTAIN). Under this plan you choose whether to receive payments for your life (SINGLE LIFE) or for your life and the life of a joint Annuitant (JOINT AND SURVIVOR) you designate. 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, surrender and certain other transactions from a Guarantee Period before its expiration date (EXPIRATION DATE). The Guarantee Periods currently available are those maturing in calendar years 1996 through 2010. Each Guarantee Period has its own Guaranteed Rates. On , 1995, a Guarantee Period maturing in calendar year 2011 will become available. However the 2011 maturity will not become available in Florida until February 15, 1996. On January 1, 1996 the Guarantee Period maturing in 1996 will no longer be available for new allocations. The number of Guarantee Periods available for investment may be limited in some states. This prospectus provides information about the INCOME MANAGER that prospective investors should know before investing. You should read it carefully and retain it for future reference. A registration statement relating to interests under the Guarantee Periods has been filed with the Securities and Exchange Commission (SEC). 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 1995 The Equitable Life Assurance Society of the United States, New York, New York 10019. All rights reserved. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1994 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 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, 787 Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary (telephone: (212) 554-1234). 2 ------------------------------------------------------------------------------ PROSPECTUS TABLE OF CONTENTS ------------------------------------------------------------------------------
GENERAL TERMS PAGE 4 PART 1: SUMMARY PAGE 5 What is the INCOME MANAGER? 5 Assured Payment Plan (Life Annuity with a Period Certain) 5 Assured Payment Plan (Period Certain) Other Provisions of the Assured Payment Plans 6 Withdrawals 6 Withdrawal Charge 6 Free Look Period 6 Services We Provide 6 Surrendering the Certificates 7 Income Annuity Options 7 Taxes 7 Premium Taxes 7 Equitable Life 7 PART 2: THE GUARANTEED PERIOD ACCOUNT PAGE 8 Guarantee Periods 8 Market Value Adjustment for Withdrawals or Surrender Prior to the Expiration Date 9 Investments 9 PART 3:PROVISIONS OF THE ASSURED PAYMENT PLANS PAGE 11 Assured Payment Plan (Life Annuity with a Period Certain) 11 Contributions 11 Allocation of Contributions 11 Period Certain Payments 11 Purchase Restrictions for Joint & Survivors 11 Payments After the Period Certain 12 Allocation of Lump Sum Withdrawals 12 Death Benefit 12 Surrendering the Certificates 13 Assured Payment Plan (Period Certain) 13 Contribution 13 Allocation of Contribution 13 Allocation of Lump Sum Withdrawals 14 Death Benefit 14 Other Provisions of the Assured Payment Plans 14 Lump Sum Withdrawals 14 Assignment 14 Surrendering the Certificates to Receive the Cash Value 14 Withdrawal Charge 14 PART 4: OTHER PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE PAGE 16 Methods of Payment 16 Wire Transmittals 16 Free Look Period 16 Annuity Account Value 16 Cash Value 17 When Payments are Made 17 Beneficiary 17 Income Annuity Options 17 Distribution of the Certificates 17 Premium Taxes 18 Group or Sponsored Arrangements 18 PART 5: TAX ASPECTS OF THE CERTIFICATES PAGE 19 Tax Changes 19 Taxation of Non-Qualified Annuities 19 Federal and State Income Tax Withholding 20 Generation Skipping Tax 21 Special Rules for Certificates Issued in Puerto Rico 21 PART 6:INDEPENDENT ACCOUNTANTS PAGE 22 APPENDIX: MARKET VALUE ADJUSTMENT EXAMPLE PAGE 23
3 ------------------------------------------------------------------------------ GENERAL TERMS ------------------------------------------------------------------------------ ANNUITANT--The individual who is the measuring life for determining annuity benefits. ANNUITY ACCOUNT VALUE--The sum of the present value of the Maturity Value in each Guarantee Period. See "Annuity Account Value" in Part 4. ANNUITY COMMENCEMENT DATE--The date on which annuity payments are to commence. ASSURED PAYMENT PLAN (Period Certain)-- An immediate annuity under which you elect to receive a level stream of annual payments for a period certain. ASSURED PAYMENT PLAN (Life Annuity with a Period Certain)--An annuity which provides guaranteed annual payments during a period certain and for your lifetime thereafter or for your lifetime and the lifetime of a joint Annuitant you designate. 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 INCOME MANAGER 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 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. 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 Certificate. GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods. GUARANTEED PERIOD AMOUNT--The term used to refer to the amount allocated to and accumulated in each Guarantee Period. GUARANTEED RATE--The annual interest rate established for each allocation to a Guarantee Period. JOINT AND SURVIVOR--The form of Assured Payment Plan (Life Annuity with a Period Certain) under which after the death of an Annuitant payments continue to the surviving Annuitant. Payments are made as long as at least one Annuitant is living. LIFE CONTINGENT ANNUITY--Provides guaranteed lifetime income beginning at a future date under the Assured Payment Plan (Life Annuity with a Period Certain). MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date. PROCESSING OFFICE--The address to which all contributions, written requests (e.g., withdrawals, etc.) or other written communications must be sent. See "Services We Provide" in Part 1. SINGLE LIFE--The form of Assured Payment Plan (Life Annuity with a Period Certain) under which payments are made to you for your lifetime. 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. 4 ------------------------------------------------------------------------------ PART 1: SUMMARY ------------------------------------------------------------------------------ The following Summary is qualified in its entirety by the terms of the Certificate when issued and the more detailed information appearing elsewhere in this prospectus (see "Prospectus Table of Contents"). WHAT IS THE INCOME MANAGER? The INCOME MANAGER is a family of annuities designed to provide retirement income. The Assured Payment Plan annuities described in this prospectus provide for the investment of funds on an after- tax basis. They feature a series of Guarantee Periods providing guaranteed interest. O GUARANTEE PERIODS Guarantee Periods maturing in each of calendar years 1996 through 2010 are available. On , 1995, a Guarantee Period maturing in calendar year 2011 will become available. However it will not become available in Florida until February 15, 1996. On January 1, 1996 the Guarantee Period maturing on February 15, 1996 will no longer be available for new allocations. The number of Guarantee Periods available for investment may be limited in some states. ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) This version of the Assured Payment Plan provides you with payments for a period certain generally starting within 13 months of the Contract Date and continuing for your lifetime or for your lifetime and the lifetime of a joint Annuitant under the Life Contingent Annuity. You have a choice of level or increasing payments. Payments are made on February 15th of each calendar year. You can also elect to delay the date payments will start. If you elect level payments, you may elect to defer the date payments will start for up to five years. If you elect increasing payments, the payment start date may only be deferred for three years. The ability to defer the payment start date may not be available in all states. Based on certain information you provide, your contribution is allocated among the Guarantee Periods and applied to the Life Contingent Annuity and may not be changed (unless a Lump Sum Withdrawal is made). Payments you receive during the period certain represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. A portion of each payment will generally be excludable from taxable income until you have received a tax-free recovery of your investment in your Certificate. The Life Contingent Annuity continues lifetime annual payments if you are living at the end of the period certain. Payments continue annually during your lifetime (and the lifetime of the joint Annuitant, if applicable) on the same date of the year as the payments that were made during the period certain. The portion of your contribution applied under the Life Contingent Annuity does not have a Cash Value or an Annuity Account Value and, therefore, does not provide for withdrawals. o Contributions To put a Certificate into effect, you must make a contribution of at least $10,000. You may make subsequent contributions of at least $1,000 at any time up until 45 days before the Annuity Commencement Date. However, if you chose the Assured Payment Plan as an election under the Income Annuity Options from another INCOME MANAGER Annuity Certificate, no subsequent contributions are permitted. o Death Benefit If the Annuitant dies before the Annuity Commencement Date, the Certificate provides a death benefit. The beneficiary will be paid the death benefit which is the greater of the Annuity Account Value and the sum of the Guaranteed Period Amounts in each Guarantee Period. However, if your spouse is the designated beneficiary under the Certificate and you have not elected to delay the payment start date, such beneficiary may elect to receive the annual payments for the period certain starting on the scheduled Annuity Commencement Date, in lieu of taking the death benefit. Unless you have elected a Joint and Survivor form, no payment will be made under the Life Contingent Annuity. If death occurs after the Annuity Commencement Date, payments will continue to be made during the period certain to the designated beneficiary on the same payment basis that was in effect prior to the death. If you have elected a Joint and Survivor form, payments will be made as long as either you or the joint Annuitant is living after the end of the period certain. In lieu of continuing payments during the period certain, the beneficiary may elect to receive a single sum. o Surrendering Your Certificate You may surrender your Certificate for its Cash Value, and thereafter receive the lifetime income provided by the Life Contingent Annuity. 5 ASSURED PAYMENT PLAN (Period Certain) Under this version of the Assured Payment Plan, you will receive a level stream of annual payments which are fully guaranteed for a period certain which you select. The period certain may be for a duration of from 7 to 15 years. Payments will generally start within 13 months of the Contract Date. The number of years you may select for the period certain may be limited in some states. Based on information you provide, your contribution is allocated among the Guarantee Periods and may not be changed (unless a Lump Sum Withdrawal is made). Payments you receive during the period certain represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. A portion of each payment under this Assured Payment Plan will be excludable from taxable income. o Contributions To put the Certificate into effect, you must make a single contribution of at least $10,000. Subsequent contributions are not permitted. o Death Benefit If the Annuitant dies before the Annuity Commencement Date, the Certificate provides a death benefit. The beneficiary will be paid the death benefit which is the greater of the Annuity Account Value and the sum of the Guaranteed Period Amounts in each Guarantee Period. If the Annuitant dies after the Annuity Commencement Date, payments will continue to be made for the remainder of the period certain to the designated beneficiary on the same payment basis that was in effect at the time of death, or the beneficiary may elect to receive a single sum. OTHER PROVISION OF THE ASSURED PAYMENT PLANS o Withdrawals After the first Contract Year and while the Certificate is in effect, you may take a Lump Sum Withdrawal from your Certificate once per Contract Year at any time during such Contract Year. You may request such Lump Sum Withdrawal, which must be in a minimum amount of the greater of $2,000 or 25% of the Cash Value, by submitting a written request in a form satisfactory to us. Lump Sum Withdrawals may result in a market value adjustment and may be subject to a withdrawal charge. Lump Sum Withdrawals will reduce the amount of your future annual payments. o Withdrawal Charge A withdrawal charge is imposed as a percentage of each contribution if a Lump Sum Withdrawal is made, or if the Certificate is surrendered. The withdrawal charge is determined 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 Contact Year in which the Lump Sum Withdrawal is made or the Certificate is surrendered. For each contribution, the Contract Year in which we receive that contribution is "Contract Year 1." FREE LOOK PERIOD You have the right to examine the INCOME MANAGER Certificate for a period of 10 days after you receive it, and to return it to us for a refund. You may cancel it by sending it to our Processing Office. Your refund will equal the Annuity Account Value reflecting any positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. If you elected the Assured Payment Plan (Life Annuity with a Period Certain), your refund will also include any amount applied to the Life Contingent Annuity. 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 Written confirmation of financial transactions. O TOLL-FREE TELEPHONE SERVICES o Call 1-800-789-7771 for a recording of daily 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 6 o FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR WITHDRAWALS) SENT BY REGULAR MAIL: Equitable Life Income Management Group P.O. Box 1547 Secaucus, NJ 07096-1547 o FOR ALL OTHER COMMUNICATIONS SENT BY EXPRESS MAIL: Equitable Life Income Management Group 200 Plaza Drive Secaucus, NJ 07096 SURRENDERING THE CERTIFICATES You may surrender a Certificate and receive the Cash Value at any time while the Annuitant is living and the Certificate is in effect. Withdrawal charges and a market value adjustment may apply. A surrender may also be subject to income tax and tax penalty. INCOME ANNUITY OPTIONS The Certificates provide income annuity options to which the beneficiary may have amounts applied if you die before the Annuity Commencement Date. The income annuity options, are offered on a fixed basis. TAXES Generally, earnings on contributions made to the Certificate will not be included in your taxable income until distributions are made from the Certificate. Distributions prior to your attaining age 59 1/2 may be subject to tax penalty. PREMIUM TAXES Generally, we deduct a charge for any premium taxes from your contribution(s). The current premium tax charge that might be imposed varies by state and ranges from 0 to 3.5%; the rate is 1% in Puerto Rico and 5% in the Virgin Islands. 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 787 Seventh Avenue, New York, New York 10019. We are authorized to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico and the Virgin Islands. We maintain local offices throughout the United States. Equitable Life is a wholly owned subsidiary of The Equitable Companies Incorporated (the "Holding Company"). The largest stockholder of the Holding Company is AXA, a French insurance holding company. AXA beneficially owns 60.5% of the Holding Company's outstanding common stock as well as $392.2 million stated value of its issued and outstanding Series E Convertible Preferred Stock. Under its investment arrangements with Equitable Life and the Holding Company, AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable Life. AXA is the principal holding company for most of the companies in one of the largest insurance groups in Europe. The majority of AXA's stock is controlled by a group of five French mutual insurance companies. 7 ------------------------------------------------------------------------------ PART 2: 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 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). 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 such Guarantee Period on such date. Guarantee Periods and Expiration Dates We currently offer Guarantee Periods ending on February 15 for each of the maturity years 1996 through 2010. As Guarantee Periods expire, we expect to add maturity years so that generally 15 are available. On , 1995, a Guarantee Period maturing in calendar year 2011 will become available. However, it will not become available in Florida until February 15, 1996. On January 1, 1996, the Guarantee Period expiring on February 15, 1996 will no longer be available for new allocations. The number of Guarantee Periods available for allocation may be limited in some states. We will not allocate amounts 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%. 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 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 October , 1995 and the related price per $100 of Maturity Value for each currently available Guarantee Period were as follows:
GUARANTEE PERIODS WITH EXPIRATION DATE GUARANTEED RATE FEBRUARY 15 OF AS OF OCTOBER , PRICE PER $100 OF MATURITY YEAR 1995 MATURITY VALUE ------------------- --------------- ------------------ 1996 x.xx% $xx.xx 1997 x.xx xx.xx 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 2008 x.xx xx.xx 2009 x.xx xx.xx 2010 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 15 of each of years 1997 through 2001, then according to the above table the lump sum contribution you would have to make as of October , 1995 would be $xxx.xx (i.e., the sum of the price per $100 of Maturity Value for each maturity year from 1997 through 2001). 8 The above table is provided to illustrate the use of present value calculations. It does not take into account withdrawals and withdrawal charges. Actual calculations will also be based on Guaranteed Rates on each actual Transaction Date, which may differ. MARKET VALUE ADJUSTMENT FOR WITHDRAWALS OR SURRENDER PRIOR TO THE EXPIRATION DATE Any withdrawal (including surrenders 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 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 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 from the Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period prior to the withdrawal. See the Appendix 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% annually. 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. INVESTMENTS Contributions received under the Certificates and allocated to Guarantee Periods will be held in a "nonunitized" separate account established by Equitable Life under the laws of New York. A nonunitized separate account is a separate account in which the Certificate Owner has no claim on, or participation in the performance of, the assets held in the account. 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. 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. 9 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 our general account. For a discussion of the Life Contingent Annuity see "Payments After the Period Certain," in Part 3. 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 (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. 10 ------------------------------------------------------------------------------ PART 3: PROVISIONS OF THE ASSURED PAYMENT PLANS ------------------------------------------------------------------------------ We offer two forms of the Assured Payment Plan from which you may choose to receive your retirement income. The Assured Payment Plan (Life Annuity with a Period Certain) and the Assured Payment Plan (Period Certain). Both plans are described below. ASSURED PAYMENT PLAN (Life Annuity with a Period Certain)Assured Payment Plan (Life Annuity with a Period Certain) (CONTINUED) This Assured Payment Plan is an annuity designed to provide lifetime payments, with a period certain, with payments generally starting within 13 months of the Contract Date. However, if you elect level payments (described below), you may elect to defer the date payments will start for up to five years. If you elect increasing payments (described below), the payment start date may only be deferred for three years. The ability to defer the payment start date may not be available in all states. Payments are made on February 15th of each calendar year. This version of the Assured Payment Plan is designed to provide you with guaranteed annual payments on a Single Life basis or a Joint and 100% to Survivor basis. It may also provide payments on a Joint and one-half to Survivor or a Joint and two- thirds to Survivor basis. This Assured Payment Plan is available at issue ages 59 1/2 through 83. It is also available at issue ages as young as 54 1/2 provided payments do not start before you attain age 59 1/2 . CONTRIBUTIONS Your initial contribution must be at least $10,000. You may make subsequent contributions of at least $1,000 at any time up until 45 days before the Annuity Commencement Date. However, if your Assured Payment Plan resulted from an election under the Income Annuity Options from another INCOME MANAGER Certificate, no subsequent contributions are permitted. ALLOCATION OF CONTRIBUTIONS Based on the amount of your contribution, your age and sex (and the age and sex of the joint Annuitant, if the Joint and Survivor is elected), the form of annuity and the period certain you select, your contribution is allocated by us among the Guarantee Periods and the Life Contingent Annuity and may not be changed by you. Any subsequent contributions will also be allocated by us to the Guarantee Periods and the Life Contingent Annuity. PERIOD CERTAIN PAYMENTS The annual payments you receive during the period certain you select represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. These payments are designed to pay out the entire Annuity Account Value by the end of the period certain. All payments committed to be paid out must be paid out as the Guarantee Periods serially mature. Once commenced, these level annual payments occur automatically through income payments to you and may not be stopped. Unlike some annuities that provide periodic payments, you will be able to make Lump Sum Withdrawals or surrender the Certificate for its Cash Value prior to the end of the period certain. You may elect to receive level annual payments during the period certain and under the Life Contingent Annuity. Or, you may elect to receive payments that increase. If you elect the increasing payments, during the period certain, payments increase by 10% every three years. After the end of the period certain, payments continue under the Life Contingent Annuity. Your first payment under the Life Contingent Annuity will be 10% greater than the final payment under the period certain. A portion of each payment is excluded from taxable income until the total amount of your investment in the contract has been recovered. If you elect level payments, you may elect a period certain of not less than 7 years nor more than 15 years. If you elect increasing payments, you may elect a period certain of 6, 9, 12 or 15 years. For issue ages up to and including age 70 the maximum period certain is 15 years; for issue ages 71 through 75 the maximum period certain is 85 less the issue age; for issue ages 76 through 80, the maximum period certain is 10 years; for issue ages 81 through 83, the maximum period certain is 90 less the issue age. The minimum and maximum period certain permitted will be reduced by each year you defer the date your payments will start. The maximum period certain permissible may also be limited in some states. PURCHASE RESTRICTIONS FOR JOINT & SURVIVORS Under the Joint and Survivor forms: (i) for purposes of the above limitations, we use the age of the 11 ------------------------------------------------------------------------------ ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) (CONTINUED) ------------------------------------------------------------------------------ younger Annuitant; (ii) neither you nor the joint Annuitant can be over age 83; (iii) the Joint and 100% to Survivor form is only available for the longest period certain permitted. PAYMENTS AFTER THE PERIOD CERTAIN The Life Contingent Annuity continues lifetime annual payments if you are living at the end of the period certain. Payments continue annually during your lifetime (and the lifetime of the joint Annuitant, if applicable) on the same date of the year as the payments that were made during the period certain. The portion of your contribution applied under the Life Contingent Annuity does not have a Cash Value or an Annuity Account Value and, therefore, does not provide for withdrawals. 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, your first payment under the Life Contingent Annuity will be 10% greater than the final payment under the period certain. Thereafter, payments will increase annually based on the increase in the Consumer Price Index, but in no event greater than 3% per year nor less than 0%. The Life Contingent Annuity may also provide payments on a Joint and one-half to Survivor or a Joint and two-third to Survivor basis. ALLOCATION OF LUMP SUM WITHDRAWALS If you take a Lump Sum Withdrawal (discussed below) a portion of such Lump Sum Withdrawal may be excludable from taxable income. Withdrawals will be taken from all remaining Guarantee Periods to which your Annuity Account Value is allocated such that the amount of the annual payments and the length of the period certain will be reduced, and the date payments under the Life Contingent Annuity are to start will be accelerated. Additional amounts above the amount of the requested withdrawal will be withdrawn from the Guarantee Periods 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. Example The example below illustrates the effect of a Lump Sum Withdrawal. This example assumes a single contribution of $100,000 is paid on February 15, 1995, which purchases level annual payments of $8,740 for a male and female, both age 70, on a Joint and two-thirds to Survivor basis with a period certain of 15 years. It assumes a Lump Sum Withdrawal at the beginning of the fourth Contract Year of 25% of an Annuity Account Value of $71,126 at which time the Annuitants are age 73. The requested withdrawal amount would be $17,781 ($71,126 x .25). The withdrawal charge would be $711 ($17,781 x .04). The Annuity Account Value after the withdrawal is $52,634 ($71,126 -$17,781 -$711). The payments would be reduced to $7,094 and the remaining period certain would be reduced to 10 years from 12. DEATH BENEFIT Before the Annuity Commencement Date Upon receipt of proof satisfactory to us of your death before the Annuity Commencement Date the death benefit will be paid to the beneficiary named in your Certificate. See "Beneficiary" in Part 4. The death benefit is the greater of the Annuity Account Value and the sum of the Guaranteed Period Amounts in each Guarantee Period. However, if your spouse is the designated beneficiary under the Certificate and you have not elected to defer the date payments are to start, such beneficiary may elect to receive the annual payments for the period certain starting on the scheduled Annuity Commencement Date, in lieu of taking the death benefit. If you have elected to defer the date payment will start your spouse also has to have been named successor Annuitant/ Certificate Owner in order to elect the payments in lieu of the death benefit. Unless you have elected a Joint and Survivor form, no payment will be made under the Life Contingent Annuity. The death benefit payable relates only to the Guarantee Periods; a death benefit is never payable under the Life Contingent Annuity. [/R] 12 ------------------------------------------------------------------------------ ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) (CONTINUED) ------------------------------------------------------------------------------ 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" in Part 4. Such an election when made on a timely basis, can defer otherwise taxable income. See "Death Benefits" in Part 5. Note that only a life annuity or an annuity that does not extend beyond the life expectancy of the beneficiary may be elected. After the Annuity Commencement Date If death occurs after the Annuity Commencement Date, payments will continue to be made during the period certain to the designated beneficiary on the same payment basis that was in effect prior to the death. If you have elected a Joint and Survivor form, payments will be made as long as either you or the joint Annuitant is living after the end of the period certain. The designated beneficiary and the joint Annuitant must be the same person. In lieu of continuing payments during the period certain, the beneficiary may elect to receive a single sum. If a single sum is elected within one year from the date of death, the single sum will be equal to the Annuity Account Value, or if greater, the sum of the Guaranteed Period Amounts in each Guarantee Period. After one year, the beneficiary may surrender the Certificate and receive the Cash Value. If a single sum is elected and there is a joint Annuitant, the date payments are to start under the Life Contingent Annuity will be accelerated so that payments will be made in reduced amounts. SURRENDERING THE CERTIFICATES You may surrender the Certificate for its Cash Value at any time while it is in effect, and thereafter receive the lifetime income provided by the Life Contingent Annuity. The date payments are to start under the Life Contingent Annuity will be accelerated to the date when the next payment was to be received under the period certain and such payments will be made in reduced amounts. Once your Certificate has been surrendered, it will be returned to you with a notation that the Life Contingent Annuity is still in effect. The Life Contingent Annuity cannot be surrendered. ASSURED PAYMENT PLAN (Period Certain) This version of the Assured Payment Plan is an immediate annuity (available at issue ages 59 1/2 through 78) which is designed to provide a level stream of guaranteed annual payments for a period certain of not less than 7 years nor more than 15 years. At issue ages over 70, the maximum period certain is age 85 less the issue age. The number of years you may select for the period certain may also be limited in some states. Payments will generally start within 13 months of the Contract Date. The level annual payments you receive during the period certain represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. A portion of each payment will be excluded from taxable income. CONTRIBUTION Under this Assured Payment Plan your single contribution must be at least $10,000. You may not make subsequent contributions under this plan. We may refuse to accept a contribution in excess of $1,500,000. ALLOCATION OF CONTRIBUTION Based on the amount of your contribution and the period certain you select, your contribution is allocated by us among the Guarantee Periods and may not be changed by you, such that you are assured a level stream of annual payments. Your contribution will earn the Guaranteed Rates for the specified Guarantee Periods offered on the Transaction Date. The following example illustrates a ten year level stream of annual payments, each in the amount of $10,000, purchased on October , 1995 with the first payment on February , 1996. To achieve this result, a single contribution of $xx,xxx.xx is required, and is allocated among the Guarantee Periods as indicated below. 13 ------------------------------------------------------------------------------ ASSURED PAYMENT PLAN (Life Annuity with a Period Certain) (CONTINUED) ------------------------------------------------------------------------------
FEBRUARY 15, OF CALENDAR PRICE PER $100 OF ALLOCATION OF YEAR PAYMENT MATURITY VALUE CONTRIBUTION -------------- --------- ----------------- --------------- 1996 $10,000 $xx.xx $x,xxx.xx 1997 10,000 xx.xx x,xxx.xx 1998 10,000 xx.xx x,xxx.xx 1999 10,000 xx.xx x,xxx.xx 2000 10,000 xx.xx x,xxx.xx 2001 10,000 xx.xx x,xxx.xx 2002 10,000 xx.xx x,xxx.xx 2003 10,000 xx.xx x,xxx.xx 2004 10,000 xx.xx x,xxx.xx 2005 10,000 xx.xx x,xxx.xx --------------- Total $xx,xxx.xx
ALLOCATION OF LUMP SUM WITHDRAWALS Lump Sum Withdrawals will be taken pro rata from all unmatured Guarantee Periods so that annual payments will continue in reduced level amounts over the remaining term of the period certain. DEATH BENEFIT Upon receipt of proof satisfactory to us of your death before the Annuity Commencement Date, we will pay the death benefit described under "Assured Payment Plan (Life Annuity with a Period Certain)," "Death Benefit" above. If death occurs after the Annuity Commencement Date, payments will continue to be made to the designated beneficiary on the same payment basis that was in effect prior to your death. See "Beneficiary" in Part 4. At the beneficiary's option, payments may be discontinued and paid in a single sum. If the single sum is elected within one year of your death, the single sum will be equal to the Annuity Account Value, or if greater, the sum of the Guaranteed Period Amounts in each Guarantee Period. After the one year period, the beneficiary may surrender the Certificate and receive the Cash Value. OTHER PROVISIONS OF THE ASSURED PAYMENT PLANSOTHER PROVISIONS OF THE ASSURED PAYMENT PLANS (CONTINUED) LUMP SUM WITHDRAWALS After the first Contract Year, you may take a Lump Sum Withdrawal once per Contract Year at any time during such Contract Year. You may request such withdrawal by submitting a written request on a form satisfactory to us. The minimum amount of a Lump Sum Withdrawal is the greater of $2,000 and 25% of the Cash Value. 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. ASSIGNMENT Certificates purchased under the Assured Payment Plans may not be assigned. 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 the Certificate is in effect. 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. We will usually pay the Cash Value in a single sum payment within seven calendar days, but we may delay payment as described in "When Payments are Made" in Part 4. For the tax consequences of surrenders, see "Part 5: Tax Aspects of the Certificates." WITHDRAWAL CHARGE A withdrawal charge will be imposed as a percentage of each contribution for Lump Sum Withdrawals, or if the Certificate is surrendered to receive the 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 Lump Sum 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 Guarantee Periods from which each such Lump Sum Withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. For each contribution, the applicable withdrawal charge will be imposed during the seven Contract Years for Lump Sum Withdrawals, until the sum of 14 ------------------------------------------------------------------------------ OTHER PROVISIONS OF THE ASSURED PAYMENT PLANS (CONTINUED) ------------------------------------------------------------------------------ all such Lump Sum Withdrawals equals the total amount of each contribution received and allocated to the Guarantee Periods. 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 5: Tax Aspects of the Certificates." The withdrawal charge is to help cover sales expenses. This charge will not be increased for the life of the Certificates. We may reduce this charge under group or sponsored arrangements. See "Group or Sponsored Arrangements" in Part 4. Assured Payment Plan (Life Annuity with a Period Certain) A Certificate Owner of certain other INCOME MANAGER Certificates that we offer may apply the Annuity Account Value to purchase the Assured Payment Plan (Life Annuity with a Period Certain) provided the issue age and payment restrictions for the Assured Payment Plan are met. If the Annuity Account Value is applied from another INCOME MANAGER 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 the Annuity Account Value is applied from such other Certificate when the dollar amount of the withdrawal charge is 2% or less, 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. Assured Payment Plan (Period Certain). A Certificate Owner of certain other INCOME MANAGER Certificates may apply the Annuity Account Value to purchase this Assured Payment Plan once withdrawal charges are no longer in effect under such other INCOME MANAGER Certificates. No withdrawal charges will apply under the Assured Payment Plan Certificate. To purchase an Assured Payment Plan, we require the return of the original Certificate. An Assured Payment Plan Certificate will be issued putting this annuity form into effect. 15 ------------------------------------------------------------------------------ PART 4: OTHER PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE ------------------------------------------------------------------------------ The provisions of your Certificate may be restricted by applicable laws or regulations. 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. Contributions are credited as of the Transaction Date. 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. 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 with immediate notification to the broker-dealer. After your Certificate has been issued, subsequent contributions under the Assured Payment Plan (Life Annuity with a Period Certain) may be transmitted by wire. FREE LOOK PERIOD You have the right to examine the INCOME MANAGER 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 positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. Under the Assured Payment Plan (Life Annuity with a Period Certain) your refund will also include any amount applied to the Life Contingent Annuity. Some states may require that we calculate the refund differently. We follow these same procedures if you change your mind before a Certificate has been issued, but after a contribution has been made. See "Part 5: 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 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 16 will equal the Maturity Value. See "Part 2: The Guaranteed Period Account." CASH VALUE The Cash Value under the Certificate reflects any upward or downward market value adjustment. See "Part 2: The Guaranteed Period Account." On any 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 "Surrendering the Certificates to Receive the Cash Value," and "Withdrawal Charge" in Part 3. WHEN PAYMENTS ARE MADE We can defer payment of any portion of the Annuity Account Value 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. BENEFICIARY 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. INCOME ANNUITY OPTIONS If you die before the Annuity Commencement Date, the beneficiary may elect to apply the death benefit to an income annuity option. 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. 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 Certificate offers the income annuity options outlined above in fixed form. Fixed annuity payments are guaranteed by us and will be based on the tables of guaranteed annuity payments in your Certificate or on our then current annuity rates, whichever is more favorable for the Annuitant. 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 death benefit in a single sum rather than as payments under the annuity form chosen. DISTRIBUTION OF THE CERTIFICATES Equitable Distributors, Inc. (EDI), an indirect wholly owned subsidiary of Equitable Life, has responsibility for sales and marketing functions and may be deemed to be the distributor of the Certificates. 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 787 Seventh Avenue, New York, New York 10019. The Certificates will be sold by registered representatives of EDI and its affili- 17 ates, who are also our licensed insurance agents, as well as by unaffiliated broker-dealers with which EDI has entered into selling agreements. Broker- dealer sales compensation (including for EDI and its affiliates) will not exceed five 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. PREMIUM TAXES Generally, we deduct a charge for any premium taxes from your contribution(s). The current premium tax charge that might be imposed varies by state and ranges from 0% to 3.5%; the rate is 1% in Puerto Rico and 5% in the Virgin Islands. 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 increase Guaranteed Rates for the Guarantee Periods and reduce purchase rates for the Life Contingent Annuity. 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 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. 18 ------------------------------------------------------------------------------ PART 5: 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 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 INCOME MANAGER 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 INCOME MANAGER Certificates to qualify as an "annuity" for purposes of Federal income tax law. Annuity contract payments are taxable as ordinary income and are subject to income tax withholding. See "Federal and State Income Tax Withholding" below. 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 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; (2) 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 (3) 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. Withdrawals Prior to the Annuity Commencement Date, any withdrawals (withdrawals which do not terminate your total interest in the Certificate) are taxable to you 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. You should discuss with your tax adviser the effect of any surrender or withdrawal under an Assured Payment Plan. Annuity Payments Once annuity payments begin (whether under one of the Assured Payment Plans or under another income annuity option), 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 life annuity, after the total investment in the contract 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. Taxation of Lump Sum Withdrawals Made After Payments Have Commenced If your Lump Sum Withdrawal terminates all periodic payments due, it will be taxable as a complete surrender as discussed above. If you make a Lump Sum Withdrawal under one of the Assured Payment Plans which does not terminate all periodic payments due, then a portion of the remaining reduced 19 payments will be eligible for tax-free recovery of investment. You should discuss with your tax adviser the taxation of any surrender or withdrawal of Cash Value. Penalty Tax In addition to income tax, a penalty tax of 10% applies to the taxable portion of a distribution unless the distribution is (1) made on or after the date you attain age 59 1/2 , (2) made on or after your death, (3) attributable to your disability, (4) is part of a series of substantially equal installments as an annuity for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and a beneficiary, (5) with respect to income allocable to amounts contributed to an annuity certificate or contract prior to August 14, 1982 which are transferred to the Certificate in a tax-free exchange, or (6) payments under an immediate annuity. An immediate annuity is generally an annuity which commences payments within one year from purchase and provides for a series of substantially equal periodic payments made at least annually. Death Benefits If, as a result of the Annuitant's death, the beneficiary is entitled to receive the death benefit described in Part 3, the beneficiary is generally subject to the same tax treatment as would apply to you. If the beneficiary takes the death benefit in a single sum, the beneficiary is treated as if the Certificate had been surrendered. The tax computation will reflect your investment in the Certificate. 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 single sum death benefit first becomes payable and before any benefit is actually paid. The taxable income that would otherwise occur, will be deferred, and payments will be taxed as described above under "Annuity Payments." 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 annuity income tax withholding will apply to payments from the Certificates made 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. A recipient of periodic payments (e.g., monthly or annual payments) which total less than a certain Federal minimum ($13,900 taxable amount per year for 1995) will generally be exempt from the Federal income tax withholding rules, unless the recipient elects to have tax withheld. A recipient of periodic payments which equal or exceed the Federal minimum ($13,900 taxable amount for 1995) will generally be 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. A withholding election may be revoked at any time and remains effective until revoked. 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. 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. 20 GENERATION SKIPPING TAX 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 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. 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. 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. SPECIAL RULES FOR CERTIFICATES ISSUED IN PUERTO RICO Under current law Equitable Life treats income from Assured Payment Plan 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 Assured Payment Plan 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. 21 ------------------------------------------------------------------------------ PART 6: INDEPENDENT ACCOUNTANTS ------------------------------------------------------------------------------ The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the years ended December 31, 1994 and 1993 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. The consolidated financial statements and consolidated financial statement schedules of Equitable Life for the year ended December 31, 1992 included in Equitable Life's Annual Report on Form 10-K, incorporated by reference in the prospectus, have been examined by Deloitte & Touche 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 Deloitte & Touche LLP given upon their authority as experts in accounting and auditing. 22 APPENDIX: 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, 1996 to a Guarantee Period with an Expiration Date of February 15, 2005 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, 2000.
ASSUMED GUARANTEED RATE ON FEBRUARY 15, 2000 ---------------------- 5.00% 9.00% ---------- ---------- As of February 15, 2000 (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, 2000 (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. 23 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The estimated expenses of issuance and distribution of the certificates are as follows: Amount Securities and Exchange Commission Registration Fee $68,966 Printing Expenses $92,750 Accounting Fees and Expenses $45,000 Legal Fees and Miscellaneous Expenses $200,000 Total Expenses $406,716 ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Equitable Life's by-laws provide, in Article VII, as follows: 7.5 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 ss.ss. 721 -726; Insurance Law ss.1216} The directors and officers of Equitable Life are insured under policies issued by Lloyd's of London, X. L. Insurance Company and ACE Insurance Company. The annual limit on such policies is $100 million, and the policies insure the officers and directors against certain liabilities arising out of their conduct in such capacities. ITEM 16. EXHIBITS Exhibits No. (1) (a) Form of Distribution Agreement by and among Equitable Distributors, Inc. (formerly Equitable Capital Securities Corporation), Separate Account No. 45 of Equitable Life and Equitable Life Assurance Society of the United States, previously filed with this Registration Statement No. 33-88456 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. 33-88456 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. 33-88456 on January 17, 1995. (2) Not applicable. (4) (a) Form of group annuity contract no. 1050-94IC, previously filed with this Registration Statement No. 33-88456 on January 17, 1995. (b) Form of group annuity certificate nos. 94ICA and 94ICB, previously filed with this Registration Statement No. 33-88456 on January 17, 1995. (c) Forms of endorsement nos. 94ENIRAI, 94ENNQI and 94ENMVAI to contract no. 1050-94IC and data pages no. 94ICA/BIM(IRA), (NQ), (NQ Plan A) and (NQ Plan B), previously filed with this Registration Statement No. 33-88456 on February 3, 1995. (d) Forms of application used with the IRA, NQ and Fixed Annuity Markets, previously filed with this Registration Statement No. 33-88456 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. 33-88456 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). (5) (a) Opinion and Consent of Jonathan E. Gaines, Esq., Vice President and Associate General Counsel of Equitable, as to the legality of the securities being registered, previously filed with this Registration Statement No. 33-88456 on January 17, 1995. (b) Copy of the Internal Revenue Service determination letter regarding qualification under Section 401 of the Internal Revenue Code. (8) Not applicable. (12) Not applicable. 2 Exhibits No. (15) Not applicable. (23) (a) Consent of Price Waterhouse. (b) Consent of Deloitte & Touche. (24) Powers of Attorney for all members of the Board of Directors, previously filed with this Registration Statement No. 33-88456 on January 17, 1995. (26) Not applicable. (27) Not applicable. (28) Not applicable. 3 ITEM 17. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan distribution not previously disclosed in the registration statement of or any material change to such information in the registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 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. 4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City and State of New York, on August 31st, 1995. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (Registrant) By: /s/Jerome S. Golden Jerome S. Golden President Income Management Group A Division of The Equitable Life Assurance Society of the United States Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by or on behalf of the following persons in the capacities and on the date indicated. PRINCIPAL EXECUTIVE OFFICERS: Richard H. Jenrette Chairman of the Executive Committee and Director Joseph J. Melone Chairman of the Board, Chief Executive Officer and Director James M. Benson President, Chief Operating Officer and Director PRINCIPAL FINANCIAL OFFICER: Jerry M. de St. Paer Executive Vice President and Chief Financial Officer PRINCIPAL ACCOUNTING OFFICER: /s/ Alvin H. Fenichel Senior Vice President and Controller Alvin H. Fenichel August 31, 1995 DIRECTORS: Claude Bebear Jean-Rene Foutou Don Johnston James M. Benson Norman C. Francis Winthrop Knowlton Christopher Brocksom Donald J. Greene Arthur L. Liman Francoise Colloc'h John T. Hartley George T. Lowy Henri de Castries John H.F. Haskell, Joseph J. Melone Jr. Joseph L. Dionne W. Edwin Jarmain George J. Sella, Jr. William T. Esrey Richard H. Jenrette Dave H. Williams By: /s/Jerome S. Golden Jerome S. Golden Attorney-in-Fact August 31, 1995 5 EXHIBIT INDEX Exhibit No. Page 4(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). 5(b) Copy of the Internal Revenue Service determination letter regarding qualification under Section 401 of the Internal Revenue Code. 23(a) Consent of Price Waterhouse. 23(b) Consent of Deloitte & Touche. 31230/031-1.doc 6 EX-4.(F) 2 FORMS OF DATA PAGES ACCUMULATOR DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 40 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to Non-Qualified Certificates Endorsement Applicable to Market Value Adjustment Terms ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: February 15, 2040 THE MAXIMUM MATURITY AGE IS AGE 85 -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the Processing Date which follows the Annuitant's 85th birthday. BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) PART B - -THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $10,000.00 INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN.
INVESTMENT OPTIONS ALLOCATION (SEE SECTION 3.01) ------------------ ----------------------------- o CONSERVATIVE INVESTORS FUND o GROWTH INVESTORS FUND o GROWTH AND INCOME FUND o EQUITY INDEX FUND o COMMON STOCK FUND $2,500.00 o GLOBAL FUND o INTERNATIONAL FUND o AGGRESSIVE STOCK FUND $2,500.00 o MONEY MARKET FUND o INTERMEDIATE GOVERNMENT SECURITIES FUND o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1996 5.62% $2,500.00 FEBRUARY 15, 1997 6.01% $2,500.00 FEBRUARY 15, 1998 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 ---------------- TOTAL:$10,000.00
Investment Options shown are Investment Funds of our Separate Account No. 45 and Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date anniversary. AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): (See Data pages, Part C; Transfers at Expiration Date) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Except as indicated below, your initial and any subsequent Contributions are allocated according to your instructions. [Initial Contribution less than $250,000] No more than 60% of any Contribution may be allocated to the Guaranteed Period Account. If you have elected Principal Assurance in the application then a portion of your initial Contribution is allocated by us to a Guarantee Period you have selected. The remaining portion of your initial Contribution is allocated to the Investment Funds according to your instructions. Any subsequent Contributions must be allocated according to your instructions. (See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): Initial Contribution minimum: $10,000. Subsequent Contribution minimum $1,000. Subsequent Contributions can be made until the Annuitant reaches age 78. We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than $1,500,000. TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C) MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): (See Data pages, Part C) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Investment Options the Lump Sum Withdrawal and any withdrawal charge will be taken; Periodic Withdrawals - Unless you specify otherwise, Periodic 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 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. No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D) WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - May not be taken until after the first Contract Year, and only one Lump Sum Withdrawal may be taken during a Contract Year thereafter at any time during such Contract Year; Periodic Withdrawals - May not start sooner than 28 days after issue of this Certificate. You may elect to receive Periodic Withdrawals on a quarterly or annual basis subject to a maximum of 2.5% quarterly and 10.0 % annually of the Annuity Account Value as of the Transaction Date. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000; Periodic Withdrawals minimum - $250. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The sum of: (1) The Annuity Account Value in the Investment Funds or, if greater, the guaranteed minimum death benefit defined below; and (2) The death benefit amount provided with respect to the Endorsement Applicable to Market Value Adjustment Terms. Guaranteed Minimum Death Benefit (GMDB) The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial Contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, see (1) below) the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent Contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see (2) below) is credited to the GMDB on each Processing Date. (1) At the end of the seventh Contract Year, the GMDB calculated on such date will be set at the then GMDB determined above or, if greater, the current Annuity Account Value in the Investment Funds. No. 94ICB Data page 4(10/95) DATA PAGES (CONT'D) (2) Interest will be calculated at the applicable effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on the lesser of the applicable interest rate above and the actual rate of return for the Money Market Fund for the Contract Year such amounts are invested. Contributions, transfers and withdrawals will be taken into account. The above applicable GMDB interest rate will be reduced once subsequent contributions exceed certain levels as explained in (3) below. (3) Depending on the Annuitant's issue age, the GMDB interest rate may be reduced based on the ratio of total contributions made after a specified age to net contributions* made prior to that age. The specified ages and ratios are shown in the table below; the interest rate is show in the applicable ratio column. REDUCED GMDB INTEREST RATES
Ratio of Contributions On or After the Specified Age To Net Contributions* Before the Specified Age --------------------------------------- Specified 100% through More than Issue Age Age 250% 250% --------- --- ---- ---- 0 - 69 70 3% 0% 70 - 74 75 0% 0%
There is no reduction in the GMDB interest rate if the ratio is less than 100%. * Net Contributions are determined on the Processing Date after the Annuitant reaches the specified age and are defined as cumulative Contributions made prior to the specified age, minus cumulative withdrawals made prior to the specified age. Death Benefit Adjustment: A "special adjustment" is made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year) and "GMDB Contributions." GMDB Contributions are equal to the sum of all Contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset as described in (1) above, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB Contributions are not reduced by withdrawals or transfers from the Investment Funds. No. 94ICB Data page 5 (10/95) DATA PAGES (CONT'D) The special adjustment will be equal to: (A) x (B) - (C): Where: (A) equals the GMDB (before the special adjustment and reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year), (B) equals (i) divided by (ii); where (i) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year, and (ii) equals the Annuity Account Value (plus any withdrawals and transfers from the Investment Funds during the prior Contract Year), and (C) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year. GUARANTEED MINIMUM INCOME BENEFIT: The Guaranteed Minimum Income Benefit provides a minimum guaranteed lifetime income from the application of an amount to purchase the Assured Payment Plan (Life Annuity with a Period Certain). On the Transaction Date the amount of lifetime income to be purchased will be based on the amount of the GMDB determined without regard to the seventh Contract Year reset applied at guaranteed maximum purchase rates. However, if the Annuity Account Value in the Investment Funds applied at current Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity would result in higher payments, the higher payments will be provided. The Guaranteed Minimum Income Benefit may only be elected on one of the Contract Date anniversaries for Contract Years 7 through 15. Payment of subsequent Contributions made after the first Contract Year may affect when the Guaranteed Minimum Income Benefit may be elected. NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): 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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED FOR AN ANNUITY (SEE SECTION 7.06): $2,000, as well as minimum of $20 for initial monthly annuity payment. WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of each Contribution made to the extent that a withdrawal exceeds the Free Corridor Amount as discussed in Section 8.01 or, if the Certificate is surrendered to receive the Cash Value. We determine the withdrawal charge separately for each Contribution in accordance with the table below. No. 94ICB Data page 6(10/95) DATA PAGES (CONT'D)
Current and Maximum Percentage of Contract Year Contributions ------------- ------------- 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00%
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 purposes of the table, for each Contribution, the Contract Year in which we receive that Contribution is "Contract Year 1." Withdrawal charges will be deducted from the Investment Options from which each withdrawal is made in proportion to the amount being withdrawn from each Investment Option. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 15% of Annuity Account Value at the beginning of the Contract Year minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions. Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply). The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): (a) Distribution Fee: A distribution fee is deducted in an amount of 0.35% of each Contribution received during the first Contract Year. This sales load is deducted on each of the seven Processing Dates (so long as the Certificate is in force) following receipt of each Contribution. 0.35% is the maximum we will charge. [Initial Contribution of $250,000 or more] If the initial Contribution is $250,000 or more the sales load is zero. (b) Guaranteed Minimum Death Benefit Charge: For the guaranteed minimum death benefit we will deduct on each Processing Date an amount equal to 0.35% of the guaranteed minimum death benefit in effect on such Processing Date. 0.35% is the maximum we will charge. No. 94ICB Data page 8 (10/95) (c) Annual Contract Fee: An administrative charge of $30 per Contract Year is incurred at the beginning of each Contract Year and deducted on each Processing Date. $30 is the maximum amount we will charge. [Initial Contribution of $25,000 or more] If the initial Contribution is $25,000 or more this charge is zero. (d) Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. Unless you specify otherwise, all of the above charges will be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. If there is insufficient value in the Investment Funds, all or a portion of the charges in (a), (c) and (d) will be deducted from the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. The charge in (b) will always be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. Also, if you surrender the Certificate or it is terminated during a Contract Year before the next Processing Date, we will deduct any annual contract fee in (c) incurred but not yet deducted. TRANSFER CHARGE (SEE SECTION 8.03): Currently, there is no charge. However, we reserve the right to impose a charge at a maximum of $25 for each transfer per Contract Year in excess of five. DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Mortality and Expense Risk Charge: Current and Maximum Annual rate of 0.90% (equivalent to a daily rate of 0.002477%). Asset Based Administrative Charge: Current and Maximum Annual rate of 0.25% (equivalent to a daily rate of 0.000692%). DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): If the Annuitant is between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which the Annuitant will attain age 80. If the Annuitant is age 75 or 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 Annuity Commencement Date. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): If no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all the Annuity Account Value 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. TRANSFER RULES (SEE SECTION 4.02): No transfers are permitted to or from the Guaranteed Period Account during the first Contract Year and only one transfer per Contract Year may be made thereafter. Guarantee Periods to which transfers may be made are limited based on the attained age of the Annuitant (see Allocation Restrictions above). MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): The amount transferred to or from the Guaranteed Period Account must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from the Guaranteed Period Account. Similarly, the entire Annuity Account Value in the Investment Funds may be transferred to the Guaranteed Period Account. WITHDRAWALS (SEE SECTION 5.01): (see Data pages, Part B; Allocation of Withdrawals) MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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% annually. No. 94ICBMVA Data page 9(10/95) DATA PAGES (CONT'D) The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account Value in the Guaranteed Period Account and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. No. 94ICBMVA Data page 10(10/95) ROLLOVER IRA DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 60 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to IRA Certificates Endorsement Applicable to Market Value Adjustment Terms Endorsement Applicable to Life Contingent Annuity ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: February 15, 2020 THE MAXIMUM MATURITY AGE IS AGE 85 -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the Processing Date which follows your 85th birthday. If you elect the IRA Assured Payment Option or IRA Assured Payment Option Plus (APO Plus) when you are age 79 or older, and subsequently terminate the option, the Annuity Commencement Date may be no later than the calendar year in which you attain age 90. However, if you choose a date later than age 70 1/2, a distribution of at least the minimum payments required must commence by April 1 of the calendar year following the calendar year in which you attain age 70 1/2 (see item 2 of the Endorsement Applicable to IRA Certificates). BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $10,000.00 INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN.
ALLOCATION INVESTMENT OPTIONS (SEE SECTION 3.01) ------------------ ------------------- o CONSERVATIVE INVESTORS FUND o GROWTH INVESTORS FUND o GROWTH AND INCOME FUND o EQUITY INDEX o COMMON STOCK FUND $2,500.00 o GLOBAL FUND o INTERNATIONAL FUND o AGGRESSIVE STOCK FUND $2,500.00 o MONEY MARKET FUND o INTERMEDIATE GOVERNMENT SECURITIES FUND o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1996 5.62% $2,500.00 FEBRUARY 15, 1997 6.01% $2,500.00 FEBRUARY 15, 1998 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 FEBRUARY 15, 2006* FEBRUARY 15, 2007* FEBRUARY 15, 2008* FEBRUARY 15, 2009* FEBRUARY 15, 2010* -------------------- TOTAL: $10,000.00
Investment Options shown are Investment Funds of our Separate Account No. 45 and Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. * Only available under the IRA Assured Payment Option or APO Plus. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date anniversary. AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): (See Data pages, Part C; Transfers at Expiration Date) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Except as indicated below, your initial and any subsequent Contributions are allocated according to your instructions. If you have elected Principal Assurance in the application, then a portion of your initial Contribution is allocated by us to a Guarantee Period you have selected. The remaining portion of your initial Contribution is allocated to the Investment Funds according to your instructions. Any subsequent Contributions will be allocated according to your instructions. (See Data pages, Part C; Allocation Restrictions) If you elect the IRA Assured Payment Option after issue of the Certificate, your Annuity Account Value and any subsequent Contributions will be allocated by us to the Guaranteed Period Account and the Life Contingent Annuity and no amounts may be allocated to the Investment Funds. (See Data pages, Part C; Allocation Restrictions) If you elect APO Plus after issue of the Certificate, a portion of your Annuity Account Value will be allocated by us to the Guaranteed Period Account and the Life Contingent Annuity. The remaining portion of your Annuity Account Value will remain in the Investment Funds. Subsequent Contributions will be allocated to the Investment Funds according to your instructions. No subsequent contributions may be allocated to the Guarantee Periods. (See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): We will only accept initial Contributions of at least $10,000 in the form of either a rollover Contribution or a direct custodian-to-custodian transfer from other individual retirement arrangements. Subsequent Contributions may be made in an amount of at least $1,000. Subsequent Contributions may be "regular" IRA Contributions (limited to a maximum of $2,000 a year), rollover Contributions or direct transfers. Rollover Contributions and direct transfers are not subject to the $2,000 annual limit. "Regular" IRA Contributions may not 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 78. However, any amount contributed after you attain age 70 1/2 must be net of your minimum distribution for the year in which the rollover or direct transfer Contribution is made. We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than $1,500,000. No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D) No. 94ICB Data page 4(10/95) A minimum Annuity Account Value of $25,000 is required to elect the IRA Assured Payment Option or APO Plus. If the IRA Assured Payment Option or APO Plus is elected at any time between the ages of 79 and 83, rollover and direct transfer contributions may be made at any time before you attain age 84, but they must be net of your minimum distribution as described above. TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C) MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): (See Data pages, Part C) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Investment Options the Lump Sum Withdrawal and any withdrawal charge will be taken; Minimum Distribution Withdrawals and Substantially Equal Payment Withdrawals - Unless you specify otherwise, Minimum Distribution Withdrawals and 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 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 RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - May not be taken until after the first Contract Year, and only one Lump Sum Withdrawal may be taken during a Contract Year thereafter at any time during such Contract Year; Minimum Distribution Withdrawals - May be elected in the year in which you attain age 70 1/2 or at a later date. Minimum Distribution Withdrawals will be made annually; Substantially Equal Payment Withdrawals - May be elected at any time if you are below age 59 1/2 and may not start sooner than 28 days after issue of this Certificate. You may elect to receive Substantially Equal Payment Withdrawals on a quarterly or annual basis. In no event may you elect to receive the first payment in the same Contract Year in which a Lump Sum Withdrawal was taken. If a Lump Sum Withdrawal is taken while Substantially Equal Payment Withdrawals are in effect, Substantially Equal Payment Withdrawals will be canceled. Minimum Distribution Withdrawals may not be elected while the IRA Assured Payment Option or APO Plus is in effect. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000; Minimum Distribution Withdrawals minimum - $250. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DATA PAGES (CONT'D.) DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The sum of: (1) The Annuity Account Value in the Investment Funds or, if greater, the guaranteed minimum death benefit defined below; and (2) The death benefit amount provided with respect to the Endorsement Applicable to Market Value Adjustment Terms. Guaranteed Minimum Death Benefit (GMDB) The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial Contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, see (1) below) the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent Contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see (2) below) is credited to the GMDB on each Processing Date. (1) At the end of the seventh Contract Year, the GMDB calculated on such date will be set at the then GMDB determined above or, if greater, the current Annuity Account Value in the Investment Funds. (2) Interest will be calculated at the applicable effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on the lesser of the applicable interest rate above and the actual rate of return for the Money Market Fund for the Contract Year such amounts are invested. Contributions, transfers and withdrawals will be taken into account. The above applicable GMDB interest rate will be reduced once subsequent contributions exceed certain levels as explained in (3) below. (3) Depending on the Annuitant's issue age, the GMDB interest rate may be reduced based on the ratio of total contributions made after a specified age to net contributions* made prior to that age. The specified ages and ratios are shown in the table below; the interest rate is show in the applicable ratio column. No. 94ICB Data Page 5(10/95) DATA PAGES (CONT'D) REDUCED GMDB INTEREST RATES
Ratio of Contributions On or After the Specified Age To Net Contributions* Before the Specified Age --------------------------------------- Specified 100% through More than Issue Age Age 250% 250% --------- --- ---- ---- 0 - 69 70 3% 0% 70 - 74 75 0% 0%
There is no reduction in the GMDB interest rate if the ratio is less than 100%. * Net Contributions are determined on the Processing Date after the Annuitant reaches the specified age and are defined as cumulative Contributions made prior to the specified age, minus cumulative withdrawals made prior to the specified age. Death Benefit Adjustment: A "special adjustment" is made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year) and "GMDB Contributions." GMDB Contributions are equal to the sum of all Contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset as described in (1) above, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB Contributions are not reduced by withdrawals or transfers from the Investment Funds. The special adjustment will be equal to: (A) x (B) - (C): Where: (A) equals the GMDB (before the special adjustment and reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year), (B) equals (i) divided by (ii); where (i) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year, and (ii) equals the Annuity Account Value (plus any withdrawals and transfers from the Investment Funds during the prior Contract Year), and (C) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year. No. 94ICB Data page 6(10/95) DATA PAGES (CONT'D) GUARANTEED MINIMUM INCOME BENEFIT: When you elect the IRA Assured Payment Option on one of the dates indicated below, the Guaranteed Minimum Income Benefit provides a minimum guaranteed lifetime income from the application of an amount to the IRA Assured Payment Option. On the Transaction Date the lifetime income to be provided will be based on the amount of the GMDB determined without regard to the seventh Contract Year reset applied at guaranteed maximum purchase rates. However, if the Annuity Account Value in the Investment Funds applied at current Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity would result in higher payments, the higher payments will be provided. The Guaranteed Minimum Income Benefit applies if your election of the IRA Assured Payment Option is elected on any one of the Contract Date anniversaries during Contract Years 7 through 15. Payment of subsequent Contributions made after the first Contract Year may affect when the Guaranteed Minimum Income Benefit will apply. Once the IRA Assured Payment Option is elected, the GMDB will no longer be in effect. NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): 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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED FOR AN ANNUITY (SEE SECTION 7.06): $2,000, as well as minimum of $20 for initial monthly annuity payment. WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of each Contribution made to the extent that (i) a Lump Sum Withdrawal exceeds the Free Corridor Amount as discussed in Section 8.01 or, (ii) a Minimum Distribution Withdrawal, when added to a Lump Sum Withdrawal previously taken in the same Contract Year, exceeds the Free Corridor Amount, and (iii) if the Certificate is surrendered to receive the Cash Value. We determine the withdrawal charge separately for each Contribution in accordance with the table below. No. 94ICB Data page 7 (10/95) DATA PAGES (CONT'D)
Current and Maximum Percentage of Contract Year Contributions ------------- ------------- 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00%
The applicable withdrawal charge percentage is determined by the Contract Year in which the Lump Sum 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." Withdrawal charges will be deducted from the Annuity Account Value in the Investment Options from which each withdrawal is made in proportion to the amount being withdrawn from each Investment Option. Substantially Equal Payment Withdrawals are not subject to a withdrawal charge. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 15% of Annuity Account Value at the beginning of the Contract Year, minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions. In any Contract Year when a Minimum Distribution Withdrawal is the only withdrawal taken, no withdrawal charge will apply. Lump Sum Withdrawals in excess of the Free Corridor Amount or a Minimum Distribution Withdrawal when added to a Lump Sum Withdrawal previously taken in the same Contract Year, which exceeds the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply). The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender. If the IRA Assured Payment Option or APO Plus is in effect there is no Free Corridor Amount for Lump Sum Withdrawals. No. 94ICB Data page 8(10/95) DATA PAGES (CONT'D) CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): (a) Guaranteed Minimum Death Benefit Charge: For the guaranteed minimum death benefit we will deduct on each Processing Date an amount equal to 0.20% of the guaranteed minimum death benefit in effect on such Processing Date. 0.20% is the maximum we will charge. (b) Annual Contract Fee: An administrative charge of $30 per Contract Year is incurred at the beginning of each Contract Year and deducted on each Processing Date. $30 is the maximum amount we will charge. (c) Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. Unless you specify otherwise, all of the above charges will be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. If there is insufficient value in the Investment Funds, all or a portion of the charges in (b) and (c) will be deducted from the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. The charge in (a) will always be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. Also, if you surrender the Certificate or it is terminated during a Contract Year before the next Processing Date, we will deduct any annual contract fee in (b) incurred but not yet deducted. TRANSFER CHARGE (SEE SECTION 8.03): Currently, there is no charge. However, we reserve the right to impose a charge at a maximum of $25 for each transfer per Contract Year in excess of five. DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Mortality and Expense Risk Charge: Current and Maximum Annual rate of 0.90% (equivalent to a daily rate of 0.002477%). Asset Based Administrative Charge: Current and Maximum Annual rate of 0.25% (equivalent to a daily rate of 0.000692%). No. 94ICB Data page 9 (10/95) DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): Except as indicated below, if you are between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which you will attain age 80. At ages 75 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 Annuity Commencement Date. If you have elected Principal Assurance, the year you select may be no earlier than 2002 nor later than 2005. However, in no event may you elect a year beyond the year in which you will attain age 70 1/2. If you elect the IRA Assured Payment Option, your Contributions and Annuity Account Value will be allocated by us to serially maturing Guarantee Periods having Expiration Dates in annual sequence and to the Life Contingent Annuity, so as to provide substantially equal or increasing annual payments for life, with a fixed period consisting of payments described under Transfers at Expiration Date. When amounts are applied under the Life Contingent Annuity, Data pages, Part D will be issued. Under the APO Plus, a portion of your Annuity Account Value 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 Life Contingent Annuity, and the remaining Annuity Account Value remains in the Investment Funds. Two years from the date the first payment is made and then every three years thereafter during the fixed period, a portion of the remaining Annuity Account Value in the Investment Funds is applied to increase the guaranteed level annuity payments under the IRA Assured Payment Option. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): Except as indicated below, if no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. If the IRA Assured Payment Option or APO Plus is in effect, upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you. Such amounts may not be transferred into any other Guarantee Periods. There is no Designated Investment Option. MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all of the Annuity Account Value in 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. No. 94ICBMVA Data page 10(10/95) DATA PAGES (CONT'D) TRANSFER RULES (SEE SECTION 4.02): No transfers are permitted to or from the Guaranteed Period Account during the first Contract Year and only one transfer per Contract Year may be made thereafter. Guarantee Periods to which transfers may be made are limited based on your attained age (see Allocation Restrictions above). MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): The amount transferred to or from the Guaranteed Period Account must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from the Guaranteed Period Account. Similarly, the entire Annuity Account Value in the Investment Funds may be transferred to the Guaranteed Period Account. WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part B; Allocation of Withdrawals) MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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%. The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account Value in the Guaranteed Period Account and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. No. 94ICBMVA Data page 11(10/95) IRA ASSURED PAYMENT OPTION PLUS (APO PLUS) DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 70 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to IRA Certificates Endorsement Applicable to Market Value Adjustment Terms Endorsement Applicable to Life Contingent Annuity ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: THE MAXIMUM MATURITY AGE IS AGE 85 -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the Processing Date which follows your 85th birthday. You have elected the APO Plus. Distributions under this Option will commence on February 15, 1996. BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) APO PLUS PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): Amount allocated to Investment Funds: Amount allocated to Guarantee Periods: Amount applied to Life Contingent Annuity:
AMOUNT FIXED PERIOD INVESTMENT OPTIONS APPLIED ANNUAL PAYMENTS ------------------ ------- --------------- o CONSERVATIVE INVESTORS FUND o GROWTH INVESTORS FUND o GROWTH AND INCOME FUND o EQUITY INDEX FUND o COMMON STOCK FUND o GLOBAL FUND o INTERNATIONAL FUND o AGGRESSIVE STOCK FUND o MONEY MARKET FUND o INTERMEDIATE GOVERNMENT SECURITIES FUND o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1996 FEBRUARY 15, 1997 FEBRUARY 15, 1998 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 FEBRUARY 15, 2006 FEBRUARY 15, 2007 FEBRUARY 15, 2008 FEBRUARY 15, 2009 FEBRUARY 15, 2010 ----------------------- SUB-TOTAL:
Investment Options shown are Investment Funds of our Separate Account No. 45 and Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. After the fixed period, payments continue for life under the Life Contingent Annuity with an initial payment of $X,XXX beginning on February 15, XXXX increasing annually thereafter as described in Data pages, Part D. In no event will the increase be greater than 3% in any year nor less than 0%. No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) APO PLUS "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate APO PLUS: The APO Plus consists of payment of Guaranteed Period Amounts on Expiration Dates as described in Data pages, Part C for a fixed period of X years. Two years from the date of the first payment and every three years thereafter during the fixed period, a portion of the remaining Annuity Account Value in the Investment Funds is applied to increase the level annual payments. Annuity benefits are provided under the Endorsement Applicable to Life Contingent Annuity as described in Data pages, Part D. BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): Not applicable AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): Not applicable ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): A portion of your initial Contribution is allocated by us to the Guaranteed Period Account and the Life Contingent Annuity. The remaining Annuity Account Value is allocated to the Investment Funds according to your instructions. (See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): We will only accept initial Contributions of at least $25,000 in the form of either a rollover Contribution or a direct custodian-to-custodian transfer from other individual retirement arrangements. Subsequent Contributions may be made in an amount of at least $1,000. Subsequent Contributions may be "regular" IRA Contributions (limited to a maximum of $2,000 a year), rollover Contributions or direct transfers. Rollover Contributions and direct transfers are not subject to the $2,000 annual limit. "Regular" IRA Contributions may not 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 78. However, any amount contributed after you attain age 70 1/2 must be net of your minimum distribution for the year in which the rollover or direct transfer Contribution is made. We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than $1,500,000. TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C) MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): Not applicable ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part C; Withdrawals) No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D.) APO PLUS WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): After the first Contract Year, you may take one Lump Sum Withdrawal during a Contract Year at any time during such Contract Year. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): (See Data pages, Part C) The sum of: (1) The Annuity Account Value in the Investment Funds or, if greater, the guaranteed minimum death benefit defined below; and (2) The death benefit amount provided with respect to the Endorsement Applicable to Market Value Adjustment Terms. Guaranteed Minimum Death Benefit (GMDB) The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial Contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, see (1) below) the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent Contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see (2) below) is credited to the GMDB on each Processing Date. (1) At the end of the seventh Contract Year, the GMDB calculated on such date will be set at the then GMDB determined above or, if greater, the current Annuity Account Value in the Investment Funds. (2) Interest will be calculated at the applicable effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on the lesser of the applicable interest rate above and the actual rate of return for the Money Market Fund for the Contract Year such amounts are invested. Contributions, transfers and withdrawals will be taken into account. The above applicable GMDB interest rate will be reduced once subsequent contributions exceed certain levels as explained in (3) below. No. 94ICB Data Page 5(10/95) (3) Depending on the Annuitant's issue age, the GMDB interest rate may be reduced based on the ratio of total contributions made after a specified age to net contributions* made prior to that age. The specified ages and ratios are shown in the table below; the interest rate is show in the applicable ratio column. REDUCED GMDB INTEREST RATES
Ratio of Contributions On or After the Specified Age To Net Contributions* Before the Specified Age --------------------------------------- Specified 100% through More than Issue Age Age 250% 250% --------- --- ---- ---- 0 - 69 70 3% 0% 70 - 74 75 0% 0%
There is no reduction in the GMDB interest rate is the ratio if less than 100%. * Net Contributions are determined on the Processing Date after the Annuitant reaches the specified age and are defined as cumulative Contributions made prior to the specified age, minus cumulative withdrawals made prior to the specified age. Death Benefit Adjustment: A "special adjustment" is made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year) and "GMDB Contributions." GMDB Contributions are equal to the sum of all Contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset as described in (1) above, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB Contributions are not reduced by withdrawals or transfers from the Investment Funds. The special adjustment will be equal to: (A) x (B) - (C): Where: (A) equals the GMDB (before the special adjustment and reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year), (B) equals (i) divided by (ii); where (i) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year, and (ii) equals the Annuity Account Value (plus any withdrawals and transfers from the Investment Funds during the prior Contract Year), and (C) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year. NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): The amount applied to provide the Annuity Benefit will be the (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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED FOR AN ANNUITY (SEE SECTION 7.06): $2,000, as well as minimum of $20 for initial monthly annuity payment. WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of each Contribution for Lump Sum Withdrawals or if the Certificate is surrendered to receive the Cash Value. We determine the withdrawal charge separately for each Contribution in accordance with the table below.
Current and Maximum Percentage of Contract Year Contributions ------------- ------------- 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00%
The applicable withdrawal charge percentage is determined by the Contract Year in which the Lump Sum 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." Withdrawal charges will be deducted from the Annuity Account Value in the Guarantee Periods from which each withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. DATA PAGES (CONT'D) APO PLUS FREE CORRIDOR AMOUNT (SEE SECTION 8.01): There is no Free Corridor Amount. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. TRANSFER CHARGE (SEE SECTION 8.03): Currently, there is no charge. However, we reserve the right to impose a charge at a maximum of $25 for each transfer per Contract Year in excess of five. DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Mortality and Expense Risk Charge: Current and Maximum Annual rate of 0.90% (equivalent to a daily rate of 0.002477%). Asset Based Administrative Charge: Current and Maximum Annual rate of 0.25% (equivalent to a daily rate of 0.000692%). SURRENDERING THE CERTIFICATE: You may surrender the Certificate for its Cash Value at any time, and thereafter receive the lifetime income provided under the Endorsement Applicable to Life Contingent Annuity. Once your Certificate has been surrendered, it will be returned to you with a notation that the Life Contingent Annuity is still in effect. (See Data pages, Part D; Purchase Payment Rules) No. 94ICB Data page 7(10/95) DATA PAGES (CONT'D) APO PLUS PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): A portion of the Annuity Account Value is allocated to seven or more Guarantee Periods having Expiration Dates in annual sequence and applied to the Life Contingent Annuity (see Data pages, Part D), so as to provide increasing annual payments for life, with a fixed period consisting of payments described under Transfers at Expiration Date, below. Any subsequent Contributions will be allocated to the Investment Funds according to your instructions. WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - Unless you specify otherwise, Lump Sum 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 required or the total amount of the withdrawal, as applicable, will be withdrawn from the Guarantee Periods such that the amount of the annual payments and the length of the fixed period will be reduced, and the date payments are to start under the Life Contingent Annuity (see Data pages, Part D) will be accelerated. Additional amounts above the amount of the requested withdrawal, may be withdrawn from the Guarantee Periods and applied to the Life Contingent Annuity to the extent necessary to achieve this result. After a withdrawal, the same pattern of payments will continue in reduced amounts for your life, and if applicable, the life of your joint Annuitant. See Endorsement Applicable to Life Contingent Annuity. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): Two years from the date the first payment is made and then every three years thereafter during the fixed period, a portion of the remaining Annuity Account Value in the Investment Funds is applied to increase the guaranteed level annual payments. Upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you. Such amounts may not be transferred into any other Guarantee Periods without terminating the APO Plus. There is no Designated Investment Option. These withdrawals are not subject to withdrawal charges. MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all of the Annuity Account Value in 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. TRANSFER RULES (SEE SECTION 4.02): 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. A transfer to or among the Guarantee Periods will terminate the APO Plus. No. 94ICBMVA Data page 8(10/95) DATA PAGES (CONT'D) APO PLUS MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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%. The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. No. 94ICBMVA Data page 9(10/95) DATA PAGES (CONT'D) APO PLUS PART D -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO LIFE CONTINGENT ANNUITY (LCA ENDORSEMENT). JOINT ANNUITANT (SEE ITEM 1 OF LCA ENDORSEMENT): JANE DOE Age: 67 Sex: Female ISSUE DATE FOR DATA PAGES, PART D: February 15, 1995 INITIAL PURCHASE PAYMENT (SEE ITEM 2 OF LCA ENDORSEMENT): $XX,XXX SUBSEQUENT PURCHASE PAYMENTS: Subsequent purchase payments will be applied by us in accordance with the Allocation Restrictions in Data pages, Part C. PURCHASE PAYMENT RULES (SEE ITEM 2 OF LCA ENDORSEMENT): The amount applied is determined by us in accordance with the Allocation Restrictions in Data pages, Part C. If the Certificate to which the LCA Endorsement is attached is surrendered to receive the Cash Value, thereafter, no subsequent purchase payments may be applied under the LCA Endorsement. (See Data pages, Part B; Surrendering the Certificate) MINIMUM PURCHASE PAYMENT: Not applicable FREQUENCY: Not applicable CHARGES DEDUCTED FROM PURCHASE PAYMENTS (SEE ITEM 2 OF LCA ENDORSEMENT): Any applicable charge for premium tax. ANNUITY BENEFIT PAYEE (SEE ITEM 3 OF LCA ENDORSEMENT): JOHN DOE INITIAL BENEFIT PAYMENT DATE (SEE ITEM 3 OF LCA ENDORSEMENT): February 15, XXXX ANNUITY BENEFIT FORM (SEE ITEM 3 OF LCA ENDORSEMENT): Joint and 2/3 to Survivor FREQUENCY OF ANNUITY BENEFIT PAYMENTS (SEE ITEM 3 OF LCA ENDORSEMENT): Annually on February 15 of each year. MINIMUM BENEFIT PAYMENT RULES (SEE ITEM 3 OF LCA ENDORSEMENT): Not applicable No. 94ICBLCA Data page 10(10/95) DATA PAGES (CONT'D) APO PLUS ANNUITY BENEFIT PURCHASED BY INITIAL PURCHASE PAYMENT: If both Annuitant's are alive: $XX,XXX If one Annuitant is alive: $ X,XXX GUARANTEED ANNUITY PURCHASE RATES (SEE ITEM 4 OF LCA ENDORSEMENT): See Schedule attached. CHANGE IN INITIAL BENEFIT PAYMENT DATE (SEE ITEM 5 OF LCA ENDORSEMENT): This date will be accelerated if a Lump Sum Withdrawal is taken as described under Withdrawals in Data pages, Part C. No. 94ICBLCA Data page 11(10/95) DATA PAGES (CONT'D) APO PLUS TERMINATING THE APO PLUS: Your APO Plus will terminate upon (i) receipt by us of a written request from you; (ii) receipt by us of a written request from you to elect the IRA Assured Payment Option with level or increasing payments; (iii) receipt by us of a subsequent Contribution which you do not want applied under the APO Plus; (iv) receipt by us of a transfer request to or among the Guarantee Periods from you; or (v) receipt by us of a request to change the Initial Benefit Payment Date under the LCA Endorsement. Upon termination of the APO Plus, your Certificate will remain in force and the Data page changes set forth below will be in effect. --THE INFORMATION BELOW ADDS TO OR CHANGES INFORMATION LISTED IN DATA PAGES PARTS A, B, C AND D. UNLESS OTHERWISE INDICATED, ALL OTHER INFORMATION INCLUDED IN SUCH DATA PAGES REMAINS UNCHANGED. PART B1 -- THIS PART MODIFIES DATA PAGES, PART B. INVESTMENT OPTIONS AVAILABLE (SEE PART II): o CONSERVATIVE INVESTORS FUND o GROWTH AND INCOME FUND o EQUITY INDEX FUND o COMMON STOCK FUND o GLOBAL FUND o INTERNATIONAL FUND o AGGRESSIVE STOCK FUND o MONEY MARKET FUND o INTERMEDIATE GOVERNMENT SECURITIES FUND o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE FEBRUARY 15, 1996 FEBRUARY 15, 1997 FEBRUARY 15, 1998 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 No. 94ICB Data page 12(10/95) DATA PAGES (CONT'D) ROLLOVER IRA PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date anniversary. DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): (See Data pages, Part C1; Transfers at Expiration Date) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Subsequent Contributions are allocated according to your instructions. TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C1) MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): (See Data pages, Part C1) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Investment Options the Lump Sum Withdrawal and any withdrawal charge will be taken; Minimum Distribution Withdrawals and Substantially Equal Payment Withdrawals - Unless you specify otherwise, Minimum Distribution Withdrawals and 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 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 RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - May not be taken until after the first Contract Year, and only one Lump Sum Withdrawal may be taken during a Contract Year thereafter at any time during such Contract Year; Minimum Distribution Withdrawals - May be elected in the year in which you attain age 70 1/2 or at a later date. Minimum Distribution Withdrawals will be made annually; Substantially Equal Payment Withdrawals - May be elected at any time if you are below age 59 1/2 and may not start sooner than 28 days after issue of this Certificate. You may elect to receive Substantially Equal Payment Withdrawals on a quarterly or annual basis. In no event may you elect to receive the first payment in the same Contract Year in which a Lump Sum Withdrawal was taken. If a Lump Sum Withdrawal is taken while Substantially Equal Payment Withdrawals are in effect, Substantially Equal Payment Withdrawals will be canceled. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000; Minimum Distribution Withdrawals minimum - $250. No. 94ICB Data page 13(10/95) DATA PAGES (CONT'D) ROLLOVER IRA WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of each Contribution made to the extent that (i) a Lump Sum Withdrawal exceeds the Free Corridor Amount as discussed in Section 8.01 or, (ii) a Minimum Distribution Withdrawal, when added to a Lump Sum Withdrawal previously taken in the same Contract Year, exceeds the Free Corridor Amount, and (iii) if the Certificate is surrendered to receive the Cash Value. See Data pages, Part B for the table of withdrawal percentages. Withdrawal charges will be deducted from the Annuity Account Value in the Investment Options from which each withdrawal is made in proportion to the amount being withdrawn from each Investment Option. Substantially Equal Payment Withdrawals are not subject to a withdrawal charge. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 15% of Annuity Account Value at the beginning of the Contract Year, minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions. In any Contract Year when a Minimum Distribution Withdrawal is the only withdrawal taken, no withdrawal charge will apply. Lump Sum Withdrawals in excess of the Free Corridor Amount or a Minimum Distribution Withdrawal when added to a Lump Sum Withdrawal previously taken in the same Contract Year, which exceeds the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply). The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): (a) Guaranteed Minimum Death Benefit Charge: For the guaranteed minimum death benefit we will deduct on each Processing Date an amount equal to 0.20% of the guaranteed minimum death benefit in effect on such Processing Date. 0.20% is the maximum we will charge. (b) Annual Contract Fee: If the initial Contribution equals $25,000 or more, this charge will be zero. (c) Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. No. 94ICB Data page 15(10/95) Unless you specify otherwise, all of the above charges will be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. If there is insufficient value in the Investment Funds, all or a portion of the charges in (b) and (c) will be deducted from the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. The charge in (a) will always be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. Also, if you surrender the Certificate or it is terminated during a Contract Year before the next Processing Date, we will deduct any annual contract fee in (b) incurred but not yet deducted. DATA PAGES (CONT'D) ROLLOVER IRA PART C1 -- THIS PART MODIFIES DATA PAGES, PART C. ALLOCATION RESTRICTIONS (SEE SECTION 3.01): If you are between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which you will attain age 80. At ages 75 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 Annuity Commencement Date. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): If no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part B1; Allocation of Withdrawals) TRANSFER RULES (SEE SECTION 4.02): No transfers are permitted to or from the Guaranteed Period Account during the first Contract Year and only one transfer per Contract Year may be made thereafter. Guarantee Periods to which transfers may be made are limited based on your attained age (see Allocation Restrictions above). MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): The amount transferred to or from the Guaranteed Period Account must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from the Guaranteed Period Account. Similarly, the entire Annuity Account Value in the Investment Funds may be transferred to the Guaranteed Period Account. PART D1 -- THIS PART MODIFIES DATA PAGES, PART D. SUBSEQUENT PURCHASE PAYMENTS: No subsequent purchase payments may be applied. No. 94ICBMVALCA Data page 16(10/95) IRA ASSURED PAYMENT OPTION DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 70 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to IRA Certificates Endorsement Applicable to Market Value Adjustment Terms Endorsement Applicable to Life Contingent Annuity ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: THE MAXIMUM MATURITY AGE IS AGE 85 -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the Processing Date which follows your 85th birthday. You have elected the IRA Assured Payment Option. Distributions under this Option will commence on February 15, 1999. BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION [APPLICABLE TO LEVEL PAYMENTS] PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $100,000.00 Amount allocated to Guarantee Periods: $73,453.00 Amount applied to Life Contingent Annuity: $26,547.00
AMOUNT FIXED PERIOD APPLIED ANNUAL PAYMENTS ------- --------------- o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1999 6.64% $8,555.00 $11,066.00 FEBRUARY 15, 2000 6.63% $8,026.00 $11,066.00 FEBRUARY 15, 2001 6.64% $7,522.00 $11,066.00 FEBRUARY 15, 2002 6.72% $7,017.00 $11,066.00 FEBRUARY 15, 2003 6.78% $6,545.00 $11,066.00 FEBRUARY 15, 2004 6.86% $6,088.00 $11,066.00 FEBRUARY 15, 2005 6.94% $5,654.00 $11,066.00 FEBRUARY 15, 2006 6.65% $5,448.00 $11,066.00 FEBRUARY 15, 2007 6.65% $5,108.00 $11,066.00 FEBRUARY 15, 2008 6.65% $4,789.00 $11,066.00 FEBRUARY 15, 2009 6.65% $4,490.00 $11,066.00 FEBRUARY 15, 2010 6.65% $4,210.00 $11,066.00 ---------------------- SUB-TOTAL: $73,453.00
Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. After the fixed period, payments continue for life under the Life Contingent Annuity with level annual payments of $11,066.00 beginning on February 15, 2011 and on the same date each year thereafter. (See Data pages, Part D.) "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION [APPLICABLE TO INCREASING PAYMENTS] PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $100,000.00 Amount allocated to Guarantee Periods: $48,833.00 Amount applied to Life Contingent Annuity: $51,167.00
AMOUNT FIXED PERIOD APPLIED ANNUAL PAYMENTS ------- --------------- o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1996 5.62% $6,832.00 $6,741.00 FEBRUARY 15, 1997 6.01% $5,997.00 $6,741.00 FEBRUARY 15, 1998 6.28% $5,614.00 $6,741.00 FEBRUARY 15, 1999 6.40% $5,785.00 $7,415.00 FEBRUARY 15, 2000 6.44% $5,427.00 $7,415.00 FEBRUARY 15, 2001 6.50% $5,080.00 $7,415.00 FEBRUARY 15, 2002 6.62% $5,206.00 $8,157.00 FEBRUARY 15, 2003 6.72% $4,846.00 $8,157.00 FEBRUARY 15, 2004 6.84% $4,495.00 $8,157.00 -------------------- TOTAL: $48,833.00
Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. After the fixed period, payments continue for life under the Life Contingent Annuity with an initial payment of $8,972.00 beginning on February 15, 2005 increasing annually thereafter as described in Data pages, Part D. In no event will the increase be greater than 3% in any year nor less than 0%. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate No. 94ICB Data page 2(7/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION {Applicable to Level Payments] IRA ASSURED PAYMENT OPTION: The IRA Assured Payment Option consists of payment of Guaranteed Period Amounts on Expiration Dates as described in Data pages, Part C for a fixed period of 12 years and annuity benefits under the Endorsement Applicable to Life Contingent Annuity as described in Data pages, Part D. {Applicable to Increasing Payments] IRA ASSURED PAYMENT OPTION: The IRA Assured Payment Option consists of payment of Guaranteed Period Amounts on Expiration Dates as described in Data pages, Part C for a fixed period of 9 years and annuity benefits under the Endorsement Applicable to Life Contingent Annuity as described in Data pages, Part D. During the fixed period, payments increase by 10% every three years. The first payment after the fixed period will be 10% greater than the final payment under the fixed period. Thereafter, payments will increase as described in Data pages, Part D. In no event will the increase be greater than 3% in any year nor less than 0%. BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): Not applicable AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): Not applicable ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Contributions are allocated by us to the Guaranteed Period Account and the Life Contingent Annuity. (See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): We will only accept initial Contributions of at least $25,000 in the form of either a rollover Contribution or a direct custodian-to-custodian transfer from other individual retirement arrangements. Subsequent Contributions may be made in an amount of at least $1,000. Subsequent Contributions may be "regular" IRA Contributions (limited to a maximum of $2,000 a year), rollover Contributions or direct transfers. Rollover Contributions and direct transfers are not subject to the $2,000 annual limit. "Regular" IRA Contributions may not 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 78. However, any amount contributed after you attain age 70 1/2 must be net of your minimum distribution for the year in which the rollover or direct transfer Contribution is made. We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than $1,500,000. TRANSFER RULES (SEE SECTION 4.02): Any transfer requests will terminate the IRA Assured Payment Option No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D.) IRA ASSURED PAYMENT OPTION MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): Not applicable ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part C; Withdrawals) WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): After the first Contract Year, you may take one Lump Sum Withdrawal during a Contract Year at any time during such Contract Year. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): (See Data pages, Part C) NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): The amount applied to provide the Annuity Benefit will be the (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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED FOR AN ANNUITY (SEE SECTION 7.06): $2,000, as well as minimum of $20 for initial monthly annuity payment. WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of each Contribution for Lump Sum Withdrawals or if the Certificate is surrendered to receive the Cash Value. We determine the withdrawal charge separately for each Contribution in accordance with the table below. No. 94ICB Data Page 4(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION
Current and Maximum Percentage of Contract Year Contributions ------------- ------------- 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00%
The applicable withdrawal charge percentage is determined by the Contract Year in which the Lump Sum 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." Withdrawal charges will be deducted from the Annuity Account Value in the Guarantee Periods from which each withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): There is no Free Corridor Amount. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. TRANSFER CHARGE (SEE SECTION 8.03): Not applicable DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): None SURRENDERING THE CERTIFICATE: You may surrender the Certificate for its Cash Value at any time, and thereafter receive the lifetime income provided under the Endorsement Applicable to Life Contingent Annuity. Once your Certificate has been surrendered, it will be returned to you with a notation that the Life Contingent Annuity is still in effect. (See Data pages, Part D; Purchase Payment Rules) No. 94ICB Data page 5(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): The entire amount of any Contribution must be allocated to [seven or more] [six, nine, 12 or 15] Guarantee Periods having Expiration Dates in annual sequence and applied to the Life Contingent Annuity (see Data pages, Part D), so as to provide [level] [increasing] annual payments for life, with a fixed period consisting of payments described under Transfers at Expiration Date, below. Any subsequent Contributions will be allocated by us as described above, such that the level payments will be increased and the remaining fixed period and date that payments are to start under the Life Contingent Annuity will remain the same. WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals will be taken from all Guarantee Periods to which your Annuity Account Value is allocated such that the amount of the annual payments and the length of the fixed period will be reduced, and the date payments are to start under the Life Contingent Annuity (see Data pages, Part D) will be accelerated. Additional amounts above the amount of the requested withdrawal, may be withdrawn from the Guarantee Periods and applied to the Life Contingent Annuity to the extent necessary to achieve this result. After a withdrawal, the same pattern of payments will continue in reduced amounts for your life, and if applicable, the life of your joint Annuitant. See Endorsement Applicable to Life Contingent Annuity. [Applicable to Increasing Payments] The first reduction in your payments will take place no later than the date of the next planned increase. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): Upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you. Such amounts may not be transferred into any other Guarantee Periods without terminating the IRA Assured Payment Option. There is no Designated Investment Option. These withdrawals are not subject to withdrawal charges. MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all of the Annuity Account Value in 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. TRANSFER RULES (SEE SECTION 4.02): A transfer request while the IRA Assured Payment Option is in effect, will terminate such Option. MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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%. No. 94ICBMVA Data page 6(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account Value in the Guaranteed Period Account and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. No. 94ICBMVA Data page 7(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION PART D -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO LIFE CONTINGENT ANNUITY (LCA ENDORSEMENT). JOINT ANNUITANT (SEE ITEM 1 OF LCA ENDORSEMENT): JANE DOE Age: 67 Sex: Female ISSUE DATE FOR DATA PAGES, PART D: February 15, 1995 INITIAL PURCHASE PAYMENT (SEE ITEM 2 OF LCA ENDORSEMENT):$26,547.00 [level] $51,167.00 [increasing] SUBSEQUENT PURCHASE PAYMENTS: Subsequent purchase payments will be applied by us in accordance with the Allocation Restrictions in Data pages, Part C. PURCHASE PAYMENT RULES (SEE ITEM 2 OF LCA ENDORSEMENT): The amount applied is determined by us in accordance with the Allocation Restrictions in Data pages, Part C. If the Certificate to which the LCA Endorsement is attached is surrendered to receive the Cash Value, thereafter, no subsequent purchase payments may be applied under the LCA Endorsement. (See Data pages, Part B; Surrendering the Certificate) MINIMUM PURCHASE PAYMENT: Not applicable FREQUENCY: Not applicable CHARGES DEDUCTED FROM PURCHASE PAYMENTS (SEE ITEM 2 OF LCA ENDORSEMENT): Any applicable charge for premium tax. ANNUITY BENEFIT PAYEE (SEE ITEM 3 OF LCA ENDORSEMENT): JOHN DOE INITIAL BENEFIT PAYMENT DATE (SEE ITEM 3 OF LCA ENDORSEMENT): February 15, 2011 ANNUITY BENEFIT FORM (SEE ITEM 3 OF LCA ENDORSEMENT): Joint and 2/3 to Survivor FREQUENCY OF ANNUITY BENEFIT PAYMENTS (SEE ITEM 3 OF LCA ENDORSEMENT): Annually on February 15 of each year. MINIMUM BENEFIT PAYMENT RULES (SEE ITEM 3 OF LCA ENDORSEMENT): Not applicable No. 94ICBLCA Data page 8(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION ANNUITY BENEFIT PURCHASED BY INITIAL PURCHASE PAYMENT: [Applicable to Level Payments] If both Annuitant's are alive: $11,106.00 If one Annuitant is alive: $ 7,377.00 [Applicable to Increasing Payments] If both Annuitant's are alive: $8,972.00 If one Annuitant is alive: $5,982.00 After the initial payment, payments will increase annually, as determined by us, by an amount corresponding to the applicable rate of change in the Consumer Price Index each year. The increase will never be greater than 3% in any year nor less than 0%. "Consumer Price Index" means the Consumer Price Index for All Urban Consumers ("CPI-U"). The applicable rate of change in the CPI-U will be equal to a fraction (a) whose numerator is the difference between the CPI-U applicable to the immediately preceding calendar year and the CPI-U applicable to the current calendar year, and (b) whose denominator is the CPI-U applicable to the immediately preceding calendar year. GUARANTEED ANNUITY PURCHASE RATES (SEE ITEM 4 OF LCA ENDORSEMENT): See Schedule attached. CHANGE IN INITIAL BENEFIT PAYMENT DATE (SEE ITEM 5 OF LCA ENDORSEMENT): This date will be accelerated if a Lump Sum Withdrawal is taken as described under Withdrawals in Data pages, Part C. No. 94ICBLCA Data page 9(10/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION [APPLICABLE TO LEVEL PAYMENTS] GUARANTEED ANNUITY PURCHASE RATE PER $1,000 OF INITIAL LEVEL ANNUAL INCOME COMMENCING AT AGE(S) 85:81 FOR A JOINT AND 2/3 TO SURVIVOR
ATTAINED AGE OF ANNUITANT:JOINT ANNUITANT RATE 70:67 $4,297.29 71:68 $4,467.97 72:69 $4,649.19 73:70 $4,841.96 74:71 $5,047.55 75:72 $5,267.45 76:73 $5,503.49 77:74 $5,757.81 78:75 $6,032.92 79:76 $6,334.35 80:77 $6,663.41 81:78 $7,024.03 82:79 $7,420.76 83:80 $7,858.89
No. 94ICBLCA Data page 10(10/95) Interest Basis: 3% Non-participating Mortality: 1983 Individual Annuity Mortality Table "a" for males/females; projected with Projection Scale "G". The above schedule shows the purchase payments required to purchase at the attained age(s) shown a benefit of $1,000 annually commencing at the attained age(s) on the Initial Benefit Payment Date. No. 94ICBLCA Data page 10(7/95) DATA PAGES (CONT'D) IRA ASSURED PAYMENT OPTION [APPLICABLE TO INCREASING PAYMENTS] GUARANTEED ANNUITY PURCHASE RATE PER $1,000 OF INITIAL INCREASING ANNUAL INCOME COMMENCING AT AGE(S) 79:76 FOR A JOINT AND 2/3 TO SURVIVOR
ATTAINED AGE OF ANNUITANT:JOINT ANNUITANT RATE 70:67 $ 9,885.27 71:68 $10,276.57 72:69 $10,691.84 73:70 $11,133.41 74:71 $11,604.07 75:72 $12,107.18 76:73 $12,646.74 77:74 $13,227.50 78:75 $13,854.91
Interest Basis: 3% Non-participating Mortality: 1983 Individual Annuity Mortality Table "a" for males/females; projected with Projection Scale "G". The above schedule shows the purchase payments required to purchase at the attained age(s) shown a benefit of $1,000 annually commencing at the attained age(s) on the Initial Benefit Payment Date. DATA PAGES (CONT'D) ROLLOVER IRA TERMINATING THE IRA ASSURED PAYMENT OPTION: Your IRA Assured Payment Option will terminate upon (i) receipt by us of a written request from you; (ii) receipt by us of a subsequent Contribution which you do not want applied under the IRA Assured Payment Option; (iii) receipt by us of a transfer request from you; or (iv) receipt by us of a request to change the Initial Benefit Payment Date under the LCA Endorsement. Upon termination of the IRA Assured Payment Option, your Certificate will remain in force and the Data page changes set forth below will be in effect. -- The information below adds to or changes information listed in DATA PAGES PARTS A, B, C AND D. UNLESS OTHERWISE INDICATED, ALL OTHER INFORMATION INCLUDED IN SUCH DATA PAGES REMAINS UNCHANGED. PART B1 -- THIS PART MODIFIES DATA PAGES, PART B. INVESTMENT OPTIONS AVAILABLE (SEE PART II): o CONSERVATIVE INVESTORS FUND o GROWTH AND INCOME FUND o EQUITY INDEX FUND o COMMON STOCK FUND o GLOBAL FUND o INTERNATIONAL FUND o AGGRESSIVE STOCK FUND o MONEY MARKET FUND o INTERMEDIATE GOVERNMENT SECURITIES FUND o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE FEBRUARY 15, 1996 FEBRUARY 15, 1997 FEBRUARY 15, 1998 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 Investment Options shown are Investment Funds of our Separate Account No. 45 and Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. No. 94ICB Data page 11(10/95) DATA PAGES (CONT'D) ROLLOVER IRA PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date anniversary. DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): (See Data pages, Part C1; Transfers at Expiration Date) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Subsequent Contributions are allocated according to your instructions. TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C1) MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): (See Data pages, Part C1) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Investment Options the Lump Sum Withdrawal and any withdrawal charge will be taken; Minimum Distribution Withdrawals and Substantially Equal Payment Withdrawals - Unless you specify otherwise, Minimum Distribution Withdrawals and 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 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 RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - May not be taken until after the first Contract Year, and only one Lump Sum Withdrawal may be taken during a Contract Year thereafter at any time during such Contract Year; Minimum Distribution Withdrawals - May be elected in the year in which you attain age 70 1/2 or at a later date. Minimum Distribution Withdrawals will be made annually; Substantially Equal Payment Withdrawals - May be elected at any time if you are below age 59 1/2 and may not start sooner than 28 days after issue of this Certificate. You may elect to receive Substantially Equal Payment Withdrawals on a quarterly or annual basis. In no event may you elect to receive the first payment in the same Contract Year in which a Lump Sum Withdrawal was taken. If a Lump Sum Withdrawal is taken while Substantially Equal Payment Withdrawals are in effect, Substantially Equal Payment Withdrawals will be canceled. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000; Minimum Distribution Withdrawals minimum - $250. No. 94ICB Data page 12(10/95) DATA PAGES (CONT'D) ROLLOVER IRA DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The sum of: (1) The Annuity Account Value in the Investment Funds or, if greater, the guaranteed minimum death benefit defined below; and (2) The death benefit amount provided with respect to the Endorsement Applicable to Market Value Adjustment Terms. Guaranteed Minimum Death Benefit (GMDB) The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial Contribution allocated to the Investment Funds. Thereafter (except as adjusted at the end of the seventh Contract Year, see (1) below) the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent Contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see (2) below) is credited to the GMDB on each Processing Date. (1) At the end of the seventh Contract Year, the GMDB calculated on such date will be set at the then GMDB determined above or, if greater, the current Annuity Account Value in the Investment Funds. (2) Interest will be calculated at the applicable effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on the lesser of the applicable interest rate above and the actual rate of return for the Money Market Fund for the Contract Year such amounts are invested. Contributions, transfers and withdrawals will be taken into account. The above applicable GMDB interest rate will be reduced once subsequent contributions exceed certain levels as explained in (3) below. (3) Depending on the Annuitant's issue age, the GMDB interest rate may be reduced based on the ratio of total contributions made after a specified age to net contributions* made prior to that age. The specified ages and ratios are shown in the table below; the interest rate is show in the applicable ratio column. No. 94ICB Data page 13(10/95) DATA PAGES (CONT'D.) ROLLOVER IRA REDUCED GMDB INTEREST RATES
Ratio of Contributions On or After the Specified Age To Net Contributions* Before the Specified Age --------------------------------------- Specified 100% through More than Issue Age Age 250% 250% --------- --- ---- ---- 0 - 69 70 3% 0% 70 - 74 75 0% 0%
There is no reduction in the GMDB interest rate is the ratio if less than 100%. * Net Contributions are determined on the Processing Date after the Annuitant reaches the specified age and are defined as cumulative Contributions made prior to the specified age, minus cumulative withdrawals made prior to the specified age. Death Benefit Adjustment: A "special adjustment" is made to the GMDB if on the next Processing Date following a withdrawal or transfer from the Investment Funds, both (i) the Annuity Account Value is less than the GMDB, and (ii) the sum of the withdrawals and transfers from the Investment Funds during the Contract Year prior to such Processing Date is greater than the difference between the GMDB (before reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year) and "GMDB Contributions." GMDB Contributions are equal to the sum of all Contributions made plus all transfers into the Investment Funds, plus at the time of any seventh Contract Year reset as described in (1) above, the amount by which the GMDB is increased to match the then current Annuity Account Value. Such GMDB Contributions are not reduced by withdrawals or transfers from the Investment Funds. The special adjustment will be equal to: (A) x (B) - (C): Where: (A) equals the GMDB (before the special adjustment and reduction for withdrawals and transfers from the Investment Funds during the prior Contract Year), (B) equals (i) divided by (ii); where (i) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year, and (ii) equals the Annuity Account Value (plus any withdrawals and transfers from the Investment Funds during the prior Contract Year), and (C) equals the sum of withdrawals and transfers from the Investment Funds during the prior Contract Year. No. 94ICB Data Page 14(10/95) DATA PAGES (CONT'D) ROLLOVER IRA WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of each Contribution made to the extent that (i) a Lump Sum Withdrawal exceeds the Free Corridor Amount as discussed in Section 8.01 or, (ii) a Minimum Distribution Withdrawal, when added to a Lump Sum Withdrawal previously taken in the same Contract Year, exceeds the Free Corridor Amount, and (iii) if the Certificate is surrendered to receive the Cash Value. See Data pages, Part B for the table of withdrawal percentages. Withdrawal charges will be deducted from the Annuity Account Value in the Investment Options from which each withdrawal is made in proportion to the amount being withdrawn from each Investment Option. Substantially Equal Payment Withdrawals are not subject to a withdrawal charge. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 15% of Annuity Account Value at the beginning of the Contract Year, minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions. In any Contract Year when a Minimum Distribution Withdrawal is the only withdrawal taken, no withdrawal charge will apply. Lump Sum Withdrawals in excess of the Free Corridor Amount or a Minimum Distribution Withdrawal when added to a Lump Sum Withdrawal previously taken in the same Contract Year, which exceeds the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply). The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): (a) Guaranteed Minimum Death Benefit Charge: For the guaranteed minimum death benefit we will deduct on each Processing Date an amount equal to 0.20% of the guaranteed minimum death benefit in effect on such Processing Date. 0.20% is the maximum we will charge. (b) Annual Contract Fee: If the initial Contribution equals $25,000 or more, this charge will be zero. (c) Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. No. 94ICB Data page 16(10/95) Unless you specify otherwise, all of the above charges will be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. If there is insufficient value in the Investment Funds, all or a portion of the charges in (b) and (c) will be deducted from the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. The charge in (a) will always be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. Also, if you surrender the Certificate or it is terminated during a Contract Year before the next Processing Date, we will deduct any annual contract fee in (b) incurred but not yet deducted. TRANSFER CHARGE (SEE SECTION 8.03): Currently, there is no charge. However, we reserve the right to impose a charge at a maximum of $25 for each transfer per Contract Year in excess of five. DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Mortality and Expense Risk Charge: Current and Maximum Annual rate of 0.90% (equivalent to a daily rate of 0.002477%). Asset Based Administrative Charge: Current and Maximum Annual rate of 0.25% (equivalent to a daily rate of 0.000692%). DATA PAGES (CONT'D) ROLLOVER IRA PART C1 -- THIS PART MODIFIES DATA PAGES, PART C. ALLOCATION RESTRICTIONS (SEE SECTION 3.01): If you are between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which you will attain age 80. At ages 75 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 Annuity Commencement Date. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): If no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part B1; Allocation of Withdrawals) TRANSFER RULES (SEE SECTION 4.02): No transfers are permitted to or from the Guaranteed Period Account during the first Contract Year and only one transfer per Contract Year may be made thereafter. Guarantee Periods to which transfers may be made are limited based on your attained age (see Allocation Restrictions above). MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): The amount transferred to or from the Guaranteed Period Account must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from the Guaranteed Period Account. Similarly, the entire Annuity Account Value in the Investment Funds may be transferred to the Guaranteed Period Account. PART D1 -- THIS PART MODIFIES DATA PAGES, PART D. SUBSEQUENT PURCHASE PAYMENTS: No subsequent purchase payments may be applied. No. 94ICBMVALCA Data page 17(7/95) ASSURED GROWTH PLAN DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 40 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to Market Value Adjustment Terms Endorsement Applicable to Non-Qualified Certificates ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: February 15, 2040 THE MAXIMUM MATURITY AGE IS AGE 85 -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the February 15th which follows the Contract Date anniversary following the Annuitant's 85th birthday. BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) PART B --THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. TOTAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $10,000.00 INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN. INVESTMENT OPTIONS ALLOCATION (SEE SECTION 3.01) o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1996 5.62% $2,500.00 FEBRUARY 15, 1997 6.01% $2,500.00 FEBRUARY 15, 1998 6.28% $2,500.00 FEBRUARY 15, 1999 6.40% $2,500.00 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 ------------------ TOTAL: $10,000.00 Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate SEPARATE ACCOUNT (SEE SECTION 2.02, 2.03 AND 2.05): Not applicable No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): Not applicable AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): The only Investment Options available under this Certificate are the Guarantee Periods. (See Data pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): (See Data pages, Part C; Transfers at Expiration Date) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Except as noted below, your initial and any subsequent Contributions are allocated according to your instructions. If you have elected Principal Assurance Withdrawals, your Contribution is allocated by us. (See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): Initial Contribution minimum: $10,000. Subsequent Contribution minimum $1,000. Subsequent Contributions can be made until the Annuitant reaches age 78. We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than $1,500,000. TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C) MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): (See Data pages, Part C) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part C; Allocation Restrictions, and Transfers at Expiration Date) WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - May not be taken until after the first Contract Year, and only one Lump Sum Withdrawal may be taken during a Contract Year thereafter at any time during such Contract Year. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D) We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): (See Data pages, Part C) NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): 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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED FOR AN ANNUITY (SEE SECTION 7.06): $2,000, as well as minimum of $20 for initial monthly annuity payment. WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of the initial and each subsequent Contribution made to the extent that a withdrawal exceeds the Free Corridor Amount as discussed in Section 8.01 or, if the Certificate is surrendered to receive the Cash Value. While Principal Assurance Withdrawals are in effect, a withdrawal charge, if any, will apply to all Lump Sum Withdrawals. We determine the withdrawal charge separately for each Contribution in accordance with the table below. Current and Maximum Percentage of Contract Year Contributions ------------- ------------- 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00% 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 purposes of the table, for each Contribution, the Contract Year in which we receive that Contribution is "Contract Year 1." No. 94ICB Data page 4(10/95) DATA PAGES (CONT'D) No. 94ICB Data page 5(10/95) Withdrawal charges will be deducted from the Annuity Account Value in the Guarantee Periods from which each withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 10% of Annuity Account Value at the beginning of the Contract Year, minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions. Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply). There is no Free Corridor Amount while Principal Assurance Withdrawals are in effect. The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit or any other form of benefit payment under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. TRANSFER CHARGE (SEE SECTION 8.03): Not applicable DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Not applicable DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): If the Annuitant is between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which the Annuitant will attain age 80. If the Annuitant is age 75 or 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 Annuity Commencement Date. If you elect Principal Assurance Withdrawals your initial Contribution or Annuity Account Value is allocated by us to serially maturing Guarantee Periods so as to provide you with level annual withdrawals for the calendar years you have selected and to return your original Contribution in the last calendar year you selected. The last withdrawal year will also be the year when your Annuity Account Value will equal your initial Contribution. Any subsequent Contributions you make while Principal Assurance Withdrawals are in effect will be allocated to the Guarantee Period with the latest Expiration Date you have elected. Alternatively, you may elect to have your subsequent Contributions allocated to any one or more Guarantee Periods with Expiration Dates beyond the last calendar year you selected for your Principal Assurance Withdrawals. For any subsequent Contributions equal to $10,000 or more, you may request to have your Principal Assurance Withdrawals redesigned. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): If no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. If you have elected Principal Assurance Withdrawals, upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you. There is no Designated Investment Option. MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all of the Annuity Account Value 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. TRANSFER RULES (SEE SECTION 4.02): No transfers are permitted to or from the Guarantee Periods during the first Contract Year and only one transfer per Contract Year may be made thereafter. Guarantee Periods to which transfers may be made are limited based on the attained age of the Annuitant (see Allocation Restrictions above). No. 94ICBMVA Data page 6(10/95) DATA PAGES (CONT'D) While Principal Assurance Withdrawals are in effect, a transfer request will terminate such withdrawals. MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): The amount transferred from a Guarantee Period must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from such Guarantee Period. WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Guarantee Periods the Lump Sum Withdrawal and any withdrawal charge will be taken; Principal Assurance Withdrawals - A Lump Sum Withdrawal will terminate Principal Assurance Withdrawals. MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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%. The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account Value and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. No. 94ICBMVA Data page 7(10/95) ASSURED GROWTH PLAN (FLEXIBLE INCOME PROGRAM) DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 60 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to Market Value Adjustment Terms Endorsement Applicable to Non-Qualified Certificates ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: February 15, 1998 THE MAXIMUM MATURITY AGE IS AGE 85 -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the February 15th which follows the Contract Date anniversary following the Annuitant's 85th birthday. BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) PART B - -THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. TOTAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $10,000.00 INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN. INVESTMENT OPTIONS ALLOCATION (SEE SECTION 3.01) o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1996 FEBRUARY 15, 1997 FEBRUARY 15, 1998 6.28% $10,000.00 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 ------------------ TOTAL: $10,000.00 Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate SEPARATE ACCOUNT (SEE SECTION 2.02, 2.03 AND 2.05): Not applicable No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) FLEXIBLE INCOME PROGRAM: The Assured Growth Plan issued with the Assured Payment Plan (Life Annuity with a Period Certain) elected as the Annuity Benefit subject to the provisions described in these Data pages. The Flexible Payment Program will be in effect through December 31, 1997 provided that all contributions have been allocated to and remain in the Guarantee Period with an Expiration Date of February 15, 1998. BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): Not applicable AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): The only Investment Options available under this Certificate are the Guarantee Periods. (See Data Pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): (See Data Pages, Part C; Transfers at Expiration Date) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): While the Flexible Income Program is in effect, all contributions must be allocated to and remain in the Guarantee Period with an Expiration Date of February 15, 1998. (See Data pages, Part C) If the Flexible Income Program is not in effect, except as noted below, your initial and any subsequent Contributions are allocated according to your instructions. If you have elected Principal Assurance Withdrawals, your Contribution is allocated by us. (See Data Pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): Initial Contribution minimum: $10,000. Subsequent Contribution minimum $1,000. Subsequent Contributions can be made until the Annuitant reaches age 78. We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than $1,500,000. TRANSFER RULES (SEE SECTION 4.02): (See Data Pages, Part C) MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): (See Data Pages, Part C) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): (See Data Pages, Part C; Allocation Restrictions, and Transfers at Expiration Date) No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D) WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - May not be taken until after the first Contract Year, and only one Lump Sum Withdrawal may be taken during a Contract Year thereafter at any time during such Contract Year. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - $1,000. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): (See Data Pages, Part C) ANNUITY BENEFIT SELECTED (SEE SECTION 7.02): Assured Payment Plan (Life Annuity with a Period Certain) NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): Your Annuity Commencement Date is as set forth on Data page 1. If you elect to accelerate the Annuity Commencement Date prior to December 31, 1997, the amount applied to provide the Annuity Benefit will be the greater of the Annuity Account Value and the Guaranteed Period Amount. Except as provided above, the amount applied to provide the Annuity Benefit will be the (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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED FOR AN ANNUITY (SEE SECTION 7.06): $2,000, as well as minimum of $20 for initial monthly annuity payment. WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of the initial and each subsequent Contribution made to the extent that a withdrawal exceeds the Free Corridor Amount as discussed in Section 8.01 or, if the Certificate is surrendered to receive the Cash Value. While Principal Assurance Withdrawals are in effect, a withdrawal charge, if any, will apply to all Lump Sum Withdrawals. We determine the withdrawal charge separately for each Contribution in accordance with the table below. No. 94ICB Data page 4(10/95) DATA PAGES (CONT'D) Current and Maximum Percentage of Contract Year Contributions ------------- ------------- 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00% 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 purposes of the table, for each Contribution, the Contract Year in which we receive that Contribution is "Contract Year 1." Withdrawal charges will be deducted from the Annuity Account Value in the Guarantee Periods from which each withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 10% of Annuity Account Value at the beginning of the Contract Year, minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions. Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply). There is no Free Corridor Amount while Principal Assurance Withdrawals are in effect. The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): Premium Taxes: A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit or any other form of benefit payment under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date. TRANSFER CHARGE (SEE SECTION 8.03): Not applicable DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Not applicable No. 94ICB Data page 5(10/95) DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): While the Flexible Income Program is in effect, all contributions must be allocated to the Guarantee Period with an Expiration Date of February 15, 1998. If the Flexible Income Program is not in effect, the following allocation restrictions apply: If the Annuitant is between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which the Annuitant will attain age 80. If the Annuitant is age 75 or 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 Annuity Commencement Date. If you elect Principal Assurance Withdrawals your Annuity Account Value is allocated by us to serially maturing Guarantee Periods so as to provide you with level annual withdrawals for the calendar years you have selected and to return your original Contribution in the last calendar year you selected. The last withdrawal year will also be the year when your Annuity Account Value will equal your initial Contribution. Any subsequent Contributions you make while Principal Assurance Withdrawals are in effect will be allocated to the Guarantee Period with the latest Expiration Date you have elected. Alternatively, you may elect to have your subsequent Contributions allocated to any one or more Guarantee Periods with Expiration Dates beyond the last calendar year you selected for your Principal Assurance Withdrawals. For any subsequent Contributions equal to $10,000 or more, you may request to have your Principal Assurance Withdrawals redesigned. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): If no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. If you have elected Principal Assurance Withdrawals, upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you. There is no Designated Investment Option. MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all of the Annuity Account Value 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. No. 94ICBMVA Data page 6(10/95) DATA PAGES (CONT'D) TRANSFER RULES (SEE SECTION 4.02): When the Flexible Income Program is in effect, if you elect (prior to December 31, 1997) to transfer all amounts held under this Certificate to a Guarantee Period with an Expiration Date of February 15, 2002 or later, the amount transferred will be equal to the greater of the Annuity Account Value and the Guaranteed Period Amount. Any other transfer request, will terminate the Flexible Income Program and the Annuity Account Value will be the amount transferred. If the Flexible Income Program, is not in effect, the following rules apply: No transfers are permitted to or from the Guarantee Periods during the first Contract Year and only one transfer per Contract Year may be made thereafter. Guarantee Periods to which transfers may be made are limited based on the attained age of the Annuitant (see Allocation Restrictions above). While Principal Assurance Withdrawals are in effect, a transfer request will terminate such withdrawals. MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): If the Flexible Income Program is not in effect, the amount transferred from a Guarantee Period must be at least $2,000 or, if less, the entire Annuity Account Value may be transferred from such Guarantee Period. WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Guarantee Periods the Lump Sum Withdrawal and any withdrawal charge will be taken; Principal Assurance Withdrawals - A Lump Sum Withdrawal will terminate Principal Assurance Withdrawals. MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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%. The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account Value and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. No. 94ICBMVA Data page 7(10/95) ASSURED PAYMENT PLAN-LIFE DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 70 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to Non-Qualified Certificates Endorsement Applicable to Market Value Adjustment Terms Endorsement Applicable to Life Contingent Annuity ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: February 15, 1999. This date may not be changed. MAXIMUM MATURITY AGE (SEE SECTION 7.03): Not applicable BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) [APPLICABLE TO LEVEL PAYMENTS] PART B --THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $100,000.00 Amount allocated to Guarantee Periods: $73,453.00 Amount applied to Life Contingent Annuity: $26,547.00 AMOUNT PERIOD CERTAIN APPLIED ANNUAL PAYMENTS ------- --------------- o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1999 6.64% $8,555.00 $11,066.00 FEBRUARY 15, 2000 6.63% $8,026.00 $11,066.00 FEBRUARY 15, 2001 6.64% $7,522.00 $11,066.00 FEBRUARY 15, 2002 6.72% $7,017.00 $11,066.00 FEBRUARY 15, 2003 6.78% $6,545.00 $11,066.00 FEBRUARY 15, 2004 6.86% $6,088.00 $11,066.00 FEBRUARY 15, 2005 6.94% $5,654.00 $11,066.00 FEBRUARY 15, 2006 6.65% $5,448.00 $11,066.00 FEBRUARY 15, 2007 6.65% $5,108.00 $11,066.00 FEBRUARY 15, 2008 6.65% $4,789.00 $11,066.00 FEBRUARY 15, 2009 6.65% $4,490.00 $11,066.00 FEBRUARY 15, 2010 6.65% $4,210.00 $11,066.00 --------------------- SUB-TOTAL: $73,453.00 Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. After the period certain, payments continue for life under the Life Contingent Annuity with level annual payments of $11,066.00 beginning on February 15, 2011 and on the same date each year thereafter. (See Data pages, Part D.) "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate SEPARATE ACCOUNT (SEE SECTION 2.02, 2.03 AND 2.05): Not applicable No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) [APPLICABLE TO INCREASING PAYMENTS] PART B--THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $100,000.00 Amount allocated to Guarantee Periods: $65,284.00 Amount applied to Life Contingent Annuity: $34,716.00 AMOUNT PERIOD CERTAIN APPLIED ANNUAL PAYMENTS ------- --------------- o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1999 6.64% $6,706.00 $8,674.00 FEBRUARY 15, 2000 6.63% $6,292.00 $8,674.00 FEBRUARY 15, 2001 6.64% $5,896.00 $8,674.00 FEBRUARY 15, 2002 6.72% $6,050.00 $9,542.00 FEBRUARY 15, 2003 6.78% $5,644.00 $9,542.00 FEBRUARY 15, 2004 6.86% $5,250.00 $9,542.00 FEBRUARY 15, 2005 6.94% $5,363.00 $10,496.00 FEBRUARY 15, 2006 6.65% $5,167.00 $10,496.00 FEBRUARY 15, 2007 6.65% $4,845.00 $10,496.00 FEBRUARY 15, 2008 6.65% $4,997.00 $11,545.00 FEBRUARY 15, 2009 6.65% $4,684.00 $11,545.00 FEBRUARY 15, 2010 6.65% $4,392.00 $11,545.00 --------------------- SUB-TOTAL: $65,284.00 Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. After the period certain, payments continue for life under the Life Contingent Annuity with an initial payment of $12,700.00 beginning on February 15, 2011 increasing annually thereafter as described in Data pages, Part D. In no event will the increase be greater than 3% in any year nor less than 0%. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate SEPARATE ACCOUNT (SEE SECTION 2.02, 2.03 AND 2.05): Not applicable No. 94ICB Data page 2 DATA PAGES (CONT'D) BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): Not applicable AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): The only Investment Options available under this Certificate are the Guarantee Periods. (See Data pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): Not applicable ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Contributions are allocated by us to the Guaranteed Period Account and the Life Contingent Annuity. (See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): Initial Contribution minimum: $10,000. Subsequent Contribution minimum $1,000. Subsequent Contributions can be made at any time prior to 45 days before the Annuity Commencement Date. However, if your Assured Payment Plan resulted from an election under Annuity Benefits from any other annuity certificate we have issued, no subsequent Contributions are permitted. We may refuse to accept any Contribution in excess of $1,500,000. TRANSFER RULES (SEE SECTION 4.02): Transfers are not permitted. MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): Not applicable ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part C; Withdrawals) WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): After the first Contract Year, you may take one Lump Sum Withdrawal during a Contract Year at any time during such Contract Year. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - the greater of $2,000 and 25% of the Cash Value. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a Lump Sum Withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): (See Data pages, Part C) No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D) ANNUITY BENEFIT (SEE SECTION 7.01): Annuity benefit payments will be made annually as described under Benefit Payment Selected, below. [Applicable to Level Payments] BENEFIT PAYMENT SELECTED (SEE SECTION 7.02): Assured Payment Plan (Life Annuity with a Period Certain) pursuant to Section 7.02 (iii), with level annual payments of $11,066.00. The Assured Payment Plan consists of payment of Guaranteed Period Amounts on Expiration Dates as described in Data pages, Part C for a period certain of 12 years and annuity benefits under the Endorsement Applicable to Life Contingent Annuity described in Data pages, Part D. Amounts may not be applied under any other Annuity Benefit. [Applicable to Increasing Payments] BENEFIT PAYMENT SELECTED (SEE SECTION 7.02): Assured Payment Plan (Life Annuity with a Period Certain) pursuant to Section 7.02 (iii), with an initial payment of $6,741.00 increasing by 10% every three years during the period certain. The first payment after the period certain will be 10% greater than the final payment under the period certain. Thereafter, such payments will increase annually (see Data pages, Part D). The Assured Payment Plan consists of payment of Guaranteed Period Amounts on Expiration Dates as described in Data pages, Part C for a period certain of 9 years and annuity benefits under Data pages, Part D. Amounts may not be applied under any other Annuity Benefit. NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): 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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): $2,000 WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of the portion of the initial Contribution allocated to the Guarantee Periods, when a Lump Sum Withdrawal is taken, or if the Certificate is surrendered to receive the Cash Value. The withdrawal charge is determined in accordance with the table below. No. 94ICB Data page 4(10/95) DATA PAGES (CONT'D) Current and Maximum Percentage of Contract Year Contribution ------------- ------------ 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00% The applicable withdrawal charge percentage is determined by the Contract Year in which the Lump Sum Withdrawal is made or the Certificate is surrendered. Withdrawal charges will be deducted from the Annuity Account Value in the Guarantee Periods from which each Lump Sum Withdrawal is taken in proportion to the amount being withdrawn from each Guarantee Period. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): There is no Free Corridor Amount. CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): Premium Taxes: A charge for any applicable premium tax will be deducted no later than the Annuity Commencement Date. TRANSFER CHARGE (SEE SECTION 8.03): Not applicable DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Not applicable SURRENDERING THE CERTIFICATE: You may surrender the Certificate for its Cash Value at any time, and thereafter receive the lifetime income provided under the Endorsement Applicable to Life Contingent Annuity. Once your Certificate has been surrendered, it will be returned to you with a notation that the Life Contingent Annuity is still in effect. (See Data pages, Part D; Change in Initial Benefit Payment Date) No. 94ICB Data page 5(10/95) DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): The entire amount of any Contribution after applicable charges, must be allocated to [seven or more] [six, nine, 12 or 15] Guarantee Periods having Expiration Dates in annual sequence and applied to the Life Contingent Annuity (see Data pages, Part D), so as to provide [level] [increasing] annual payments for life, with a period certain consisting of payments as described under Payments at Expiration Date below. WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals will be taken from all remaining Guarantee Periods to which your Annuity Account Value is allocated such that the amount of the annual payments and the length of the period certain will be reduced and the Initial Benefit Payment Date for the Life Contingent Annuity (see Data pages, Part D) will be accelerated. Additional amounts above the amount of the requested withdrawal will be withdrawn from the Guarantee Periods 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. See Endorsement Applicable to Life Contingent Annuity. [Applicable to Increasing Payments] The first reduction in your payments will take place no later than the date of the next planned increase. PAYMENTS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): Upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you (or your beneficiary after your death). Such amounts may not be transferred into any other Guarantee Periods or applied under any other Annuity Benefit. There is no Designated Investment Option. These payments are not deemed to be withdrawals and are therefore not subject to withdrawal charges. MARKET VALUE ADJUSTMENT (MVA) ON WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal of a portion of the amount in a Guarantee Period prior to the Expiration Date will be a percentage of the MVA that would be applicable upon a withdrawal of all the Annuity Account Value 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. MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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%. No. 94ICBMVA Data page 6(10/95) DATA PAGES (CONT'D) The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): Prior to the Annuity Commencement Date, the death benefit amount is equal to larger of (a) the Annuity Account Value and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. If you die after the Annuity Commencement Date, payments will continue to be made to the designated beneficiary on the same basis that was in effect prior to the death. At the beneficiary's option, payments may be discontinued and paid in a single sum. If the single sum is elected within one year of death, the single sum will be equal to the larger of (a) the Annuity Account Value and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. After the one year period the beneficiary may surrender the Certificate and receive the Cash Value. No. 94ICBMVA Data page 7(10/95) DATA PAGES (CONT'D) PART D -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO LIFE CONTINGENT ANNUITY (LCA ENDORSEMENT). JOINT ANNUITANT (SEE ITEM 1 OF LCA ENDORSEMENT): JANE DOE Age: 67 Sex: Female ISSUE DATE FOR DATA PAGES, PART D: February 15, 1995 INITIAL PURCHASE PAYMENT (SEE ITEM 2 OF LCA ENDORSEMENT):$26,547.00 [level] $34,716.00 [increasing] SUBSEQUENT PURCHASE PAYMENTS: Subsequent purchase payments will be applied by us in accordance with the Allocation Restrictions in Data pages, Part C. PURCHASE PAYMENT RULES (SEE ITEM 2 OF LCA ENDORSEMENT): The amount applied is determined by us in accordance with the Allocation Restrictions in Data pages, Part C. MINIMUM PURCHASE PAYMENT: Not applicable FREQUENCY: Not applicable CHARGES DEDUCTED FROM PURCHASE PAYMENTS (SEE ITEM 2 OF LCA ENDORSEMENT): Any applicable charge for premium tax. ANNUITY BENEFIT PAYEE (SEE ITEM 3 OF LCA ENDORSEMENT): JOHN DOE INITIAL BENEFIT PAYMENT DATE (SEE ITEM 3 OF LCA ENDORSEMENT): February 15, 2011 ANNUITY BENEFIT FORM (SEE ITEM 3 OF LCA ENDORSEMENT): Joint and 2/3 to Survivor FREQUENCY OF ANNUITY BENEFIT PAYMENTS (SEE ITEM 3 OF LCA ENDORSEMENT): Annually on February 15 of each year. MINIMUM BENEFIT PAYMENT RULES (SEE ITEM 3 OF LCA ENDORSEMENT): Not applicable No. 94ICBLCA Data page 8(10/95) DATA PAGES (CONT'D) ANNUITY BENEFIT PURCHASED BY INITIAL PURCHASE PAYMENT: [Applicable to Level Payments] If both Annuitant's are alive: $11,106.00 If one Annuitant is alive: $ 7,377.00 [Applicable to Increasing Payments] If both Annuitant's are alive: $12,700.00 If one Annuitant is alive: $ 8,467.00 After the initial payment, payments will increase annually, as determined by us, by an amount corresponding to the applicable rate of change in the Consumer Price Index each year. The increase will never be greater than 3% in any year nor less than 0%. "Consumer Price Index" means the Consumer Price Index for All Urban Consumers ("CPI-U"). The applicable rate of change in the CPI-U will be equal to a fraction (a) whose numerator is the difference between the CPI-U applicable to the immediately preceding calendar year and the CPI-U applicable to the current calendar year, and (b) whose denominator is the CPI-U applicable to the immediately preceding calendar year. GUARANTEED ANNUITY PURCHASE RATES (SEE ITEM 4 OF LCA ENDORSEMENT): See Schedule attached. CHANGE IN INITIAL BENEFIT PAYMENT DATE (SEE ITEM 5 OF LCA ENDORSEMENT): This date will be accelerated if a Lump Sum Withdrawal is taken as described under Withdrawals in Data pages, Part C. If you surrender the Certificate to which the LCA Endorsement is attached to receive the Cash Value, the Initial Benefit Payment Date under the Life Contingent Annuity will be accelerated to the date when the next payment was to be received under the period certain. Payments under the Life Contingent Annuity will then be made in reduced amounts. No. 94ICBLCA Data page 9(10/95) DATA PAGES (CONT'D) [APPLICABLE TO LEVEL PAYMENTS] GUARANTEED ANNUITY PURCHASE RATE PER $1,000 OF INITIAL LEVEL ANNUAL INCOME COMMENCING AT AGE(S) 85:81 FOR A JOINT AND 2/3 TO SURVIVOR ATTAINED AGE OF ANNUITANT:JOINT ANNUITANT RATE 70:67 $7,719.15 71:68 $8,024.55 72:69 $8,348.64 73:70 $8,693.64 Interest Basis: 3% Non-participating Mortality: 1983 Individual Annuity Mortality Table "a" for males/females; projected with Projection Scale "G". The above schedule shows the purchase payments required to purchase at the attained age(s) shown a benefit of $1,000 annually commencing at the attained age(s) on the Initial Benefit Payment Date. No. 94ICBLCA Data page 10(10/95) DATA PAGES (CONT'D) [APPLICABLE TO INCREASING PAYMENTS] GUARANTEED ANNUITY PURCHASE RATE PER $1,000 OF INITIAL INCREASING ANNUAL INCOME COMMENCING AT AGE(S) 79:76 FOR A JOINT AND 2/3 TO SURVIVOR ATTAINED AGE OF ANNUITANT:JOINT ANNUITANT RATE 70:67 $ 9,885.27 71:68 $10,276.57 72:69 $10,691.84 73:70 $11,133.41 Interest Basis:3% Non-participating Mortality: 1983 Individual Annuity Mortality Table "a" for males/females; projected with Projection Scale "G". The above schedule shows the purchase payments required to purchase at the attained age(s) shown a benefit of $1,000 annually commencing at the attained age(s) on the Initial Benefit Payment Date. No. 94ICBLCA Data page 1(7/95) ASSURED PAYMENT PLAN (PERIOD CERTAIN) DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. OWNER: JOHN DOE ANNUITANT: JOHN DOE Age: 40 Sex: Male CONTRACT: GROUP ANNUITY CONTRACT NO. AC 0000 CERTIFICATE NUMBER: 00 000 000 ENDORSEMENTS ATTACHED: Endorsement Applicable to Non-Qualified Certificates Endorsement Applicable to Market Value Adjustment Terms ISSUE DATE: February 15, 1995 CONTRACT DATE: February 15, 1995 ANNUITY COMMENCEMENT DATE: February 15, 1996 This date may not be changed. MAXIMUM MATURITY AGE (SEE SECTION 7.03): Not applicable BENEFICIARY: JANE DOE No. 94ICB Data page 1(10/95) DATA PAGES (CONT'D) PART B--THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): $10,000.00 AMOUNT PERIOD CERTAIN APPLIED ANNUAL PAYMENTS ------- --------------- o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1996 5.62% $1,015.00 $1,076.00 FEBRUARY 15, 1997 6.01% $952.00 $1,076.00 FEBRUARY 15, 1998 6.28% $889.00 $1,076.00 FEBRUARY 15, 1999 6.40% $832.00 $1,076.00 FEBRUARY 15, 2000 6.44% $781.00 $1,076.00 FEBRUARY 15, 2001 6.50% $732.00 $1,076.00 FEBRUARY 15, 2002 6.62% $682.00 $1,076.00 FEBRUARY 15, 2003 6.72% $637.00 $1,076.00 FEBRUARY 15, 2004 6.84% $592.00 $1,076.00 FEBRUARY 15, 2005 6.96% $550.00 $1,076.00 FEBRUARY 15, 2006 6.65% $530.00 $1,076.00 FEBRUARY 15, 2007 6.65% $497.00 $1,076.00 FEBRUARY 15, 2008 6.65% $466.00 $1,076.00 FEBRUARY 15, 2009 6.65% $437.00 $1,076.00 FEBRUARY 15, 2010 6.65% $409.00 $1,076.00 ------------------ TOTAL: $10,000.00 Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate SEPARATE ACCOUNT (SEE SECTION 2.02, 2.03 AND 2.05): Not applicable No. 94ICB Data page 2(10/95) DATA PAGES (CONT'D) BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): Not applicable AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): The only Investment Options available under this Certificate are the Guarantee Periods. (See Data pages, Part C; Allocation Restrictions) DESIGNATED INVESTMENT OPTION (SEE THE LAST PARAGRAPH OF SECTION 2.05): Not applicable ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Contributions are allocated by us among the Guarantee Periods. (See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): Initial Contribution minimum: $10,000. No subsequent Contribution may be made. We may refuse to accept any Contribution in excess of $1,500,000. TRANSFER RULES (SEE SECTION 4.02): Transfers are not permitted. MINIMUM TRANSFER AMOUNT (SEE SECTION 4.02): Not applicable ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): (See Data pages, Part C; Withdrawals) WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): After the first Contract Year, you may take one Lump Sum Withdrawal during a Contract Year at any time during such Contract Year. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum - the greater of $2,000 and 25% of the Cash Value. MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a Lump Sum Withdrawal must be for either (a) 90% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): (See Data pages, Part C) ANNUITY BENEFIT (SEE SECTION 7.01): Annuity benefit payments will be made annually during the period certain. No. 94ICB Data page 3(10/95) DATA PAGES (CONT'D) No. 94ICB Data page 4(10/95) BENEFIT PAYMENT SELECTED (SEE SECTION 7.02): Assured Payment Plan (Period Certain) pursuant to Section 7.02 (iii), with level annual payments of $1,076.00. The Assured Payment Plan consists of payment of Guaranteed Period Amounts on Expiration Dates as described in Data pages, Part C for a period certain of 15 years. Amounts may not be applied under any other Annuity Benefit. NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): 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. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): 6% per year MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): $2,000 WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a percentage of the initial Contribution made when a Lump Sum Withdrawal is taken, or if the Certificate is surrendered to receive the Cash Value. The withdrawal charge is determined in accordance with the table below. Current and Maximum Percentage of Contract Year Contribution ------------- ------------ 1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00% The applicable withdrawal charge percentage is determined by the Contract Year in which the Lump Sum Withdrawal is made or the Certificate is surrendered. Withdrawal charges will be deducted from the Annuity Account Value in the Guarantee Periods from which each Lump Sum Withdrawal is made in proportion to the amount being withdrawn from each Guarantee Period. FREE CORRIDOR AMOUNT (SEE SECTION 8.01): There is no Free Corridor Amount. DATA PAGES (CONT'D) CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): Premium Taxes: A charge for any applicable premium tax will be deducted no later than the Annuity Commencement Date. TRANSFER CHARGE (SEE SECTION 8.03): Not applicable DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Not applicable No. 94ICB Data page 5(10/95) DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): The entire amount of any Contribution after applicable charges, must be allocated to seven or more Guarantee Periods having Expiration Dates in annual sequence, so as to provide substantially equal annual payments for a period certain consisting of payments as described under Payments at Expiration Date below. WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals plus any withdrawal charges that apply will be taken pro rata from the Annuity Account Value in all unmatured Guarantee Periods so that the annual payments will continue in reduced level amounts over the remaining term of the period certain. PAYMENTS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): Upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you (or your beneficiary after your death). Such amounts may not be transferred into any other Guarantee Periods or applied under any other Annuity Benefit. There is no Designated Investment Option. These payments are not deemed to be withdrawals and are therefore not subject to withdrawal charges. MARKET VALUE ADJUSTMENT (MVA) ON WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal of a portion of the amount in a Guarantee Period prior to the Expiration Date will be a percentage of the MVA that would be applicable upon a withdrawal of all the Annuity Account Value from a Guarantee Period. This percentage is determined by (i) dividing the amount of the withdrawal from the Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period prior to the withdrawal. MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): 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%. The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): Prior to the Annuity Commencement Date, the death benefit amount is equal to larger of (a) the Annuity Account Value and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. No. 94ICBMVA Data page 6(10/95) DATA PAGES (CONT'D) If you die after the Annuity Commencement Date, payments will continue to be made to the designated beneficiary on the same basis that was in effect prior to the death. At the beneficiary's option, payments may be discontinued and paid in a single sum. If the single sum is elected within one year of death, the single sum will be equal to the largest of (a) the Annuity Account Value and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. After the one year period the beneficiary may surrender the Certificate and receive the Cash Value. No. 94ICBMVA Data page 7(10/95) EX-5.(B) 3 IRS LETTER INTERNAL REVENUE SERVICE Department of the Treasury Plan Name: IRA Annuity Contract 1050-94IC w/94 ENIRAI Washington, DC 20224 FFN: 50117870000-024 Case: 9570001 EIN: 13-5570651 Letter Serial No. D189713a Person to Contact: Ms. Arrington Equitable Life Assurance Society Of The United States Telephone Number: (202)622-8173 787 Seventh Avenue Refer Reply to: CP:E:EP: T3 New York, NY 10019 Date: 5/01/95 Dear Applicant: In our opinion, the form of the prototype trust, custodial account or annuity contract identified above is acceptable under section 408 of the Internal Revenue Code, as amended by the Tax Reform Act of 1986. Each individual who adopts this approved plan will be considered to have a retirement savings program that satisfies the requirements of Code section 408, provided they follow the terms of the program, do not engage in certain transactions specified in Code section 408(e), and, if the arrangement is a trust or custodial account, the trustee or custodian is a bank within the meaning of Code section 408(n) or has been approved by the Internal Revenue Service pursuant to Code section 408(a)(2). Please provide a copy of this letter to each person affected. The Internal Revenue Service has not evaluated the merits of this savings program and does not guarantee contributions or investments made under the savings program. Furthermore, this letter does not express any opinion as to the applicability of Code section 4975, regarding prohibited transactions. Code section 408(i) and related regulations require that the trustee, custodian or issuer of a contract provide a disclosure statement to each participant in this program as specified in the regulations. Publication 590, Tax Information on Individual Retirement Arrangements, gives information about the items to be disclosed. The trustee, custodian or issuer of a contract is also required to provide each adopting individual with annual reports of savings program transactions. Your program may have to be amended to include or revise provisions in order to comply with future changes in the law or regulations. If you have any questions concerning IRS processing of this case, call us at the above telephone number. Please refer to the File Folder Number (FFN) shown in the heading of this letter. Please provide those adopting this plan with your telephone number, and advise them to contact your office if they have any questions about the operation of this plan. You should keep this letter as a permanent record. Please notify us if you terminate the form of this Plan Sincerely yours, /s/ Frances V. Sloan Chief, Employee Plans Technical Branch 3 EX-23.(A) 4 CONSENT OF PRICE WATERHOUSE Consent of Independent Accountants We hereby consent to the incorporation by reference in each Prospectus constituting part of this Post-Effective Amendment No. 2 to the Registration Statement No. 33-88456 on Form S-3 (the "Registration Statement") of our report dated February 8, 1995, appearing on page F-1 of The Equitable Life Assurance Society of the United States' Annual Report on Form 10-K for the year ended December 31, 1994. We also consent to the incorporation by reference of our report on the Consolidated Financial Statement Schedules dated February 8, 1995, which appears on page F-35 of such Annual Report on Form 10-K. We also consent to the references to us under the heading "Independent Accountants" in such Registration Statement. Price Waterhouse LLP PRICE WATERHOUSE LLP New York, New York August 30, 1995 EX-23.(B) 5 CONSENT OF DELOITTE & TOUCHE INDEPENDENT AUDITORS' CONSENT The Equitable Life Assurance Society of the United States We consent to the incorporation by reference in Post-Effective Amendment No. 2 to the Registration Statement (No. 33-88456) of The Equitable Life Assurance Society of the United States ("Equitable Life") on Form S-3 of our reports dated February 16, 1993, appearing in the Form 10-K of Equitable Life incorporated by reference in each of the Prospectuses which are a part of such Registration Statement and to the reference to us under the heading "Independent Accountants" in such Prospectuses. Deloitte & Touche LLP Deloitte & Touche LLP New York, New York August 30, 1995