-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CWhHF4XH1UeEjpQVpwOZIquAVnq3RAqHXMdp8QlWb3FhJG5zZ+uWZc0ojBpUoDH4 UgDuphUxgaErWRXpi1tbmg== 0000950159-98-000172.txt : 19980630 0000950159-98-000172.hdr.sgml : 19980630 ACCESSION NUMBER: 0000950159-98-000172 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 SROS: NYSE SROS: PHLX SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIGNA CORP CENTRAL INDEX KEY: 0000701221 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 061059331 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-08323 FILM NUMBER: 98655994 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLACE 1650 MARKET ST STREET 2: PO BOX 7716 CITY: PHILADELPHIA STATE: PA ZIP: 19192-1550 BUSINESS PHONE: 2157616211 MAIL ADDRESS: STREET 1: TWO LIBERTY PLACE 48TH FLOOR STREET 2: 1601 CHESTNUT STREET CITY: PHILADELPHIA STATE: PA ZIP: 19192 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------------------- FORM 11-K (Mark One) |X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR |_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 1-8323 ----------------------------------------------------- A. Full title of the plan and the address of the plan, if different from that of the issuer named below: CIGNA Corporation Savings and Investment Plus Plan Two Liberty Place, 17th Floor 1601 Chestnut Street P.O. Box 7716 Philadelphia, PA 19192 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: CIGNA Corporation One Liberty Place 1650 Market Street Philadelphia, PA 19192 Required Information Financial statements and schedules for CIGNA Corporation's Savings and Investment Plus Plan, prepared in accordance with the financial reporting requirements of Employee Retirement Income Security Act of 1974, appear on pages 11-K-3 through 11-K-19 of this Annual Report on Form 11-K. 11-K-2 SAVINGS AND INVESTMENT PLUS PLAN Financial Statements and Supplemental Schedules December 31, 1997 and 1996 11-K-3 SAVINGS AND INVESTMENT PLUS PLAN TABLE OF CONTENTS Page Report of Independent Accountants 1 Financial Statements Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4 Supplemental Schedules Schedule of Assets Held for Investment Purposes 13 Schedule of Reportable Transactions 14 Schedule of Loans in Default 15 11-K-4 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of CIGNA Corporation and the Participants and Administrator of the Savings and Investment Plus Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Savings and Investment Plus Plan (the Plan) at December 31, 1997 and 1996, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules are not required as part of the basic financial statements but represent additional information required by the Employee Retirement Income Security Act of 1974. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Price Waterhouse LLP Philadelphia, Pennsylvania June 12, 1998 11-K-5 SAVINGS AND INVESTMENT PLUS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1997 1996 ------ ------ (In thousands) Assets Investments, at fair value Fixed Income Fund $ 886,053 $ 891,281 CIGNA Stock Fund 162,070 113,215 Pooled separate accounts of Connecticut General Life Insurance Company: Fidelity Advisor Growth Opportunities Fund 300,218 227,302 Stock Market Index Fund 144,841 84,101 Founders Growth Fund 44,028 13,362 International Equity Fund 29,733 30,114 Warburg Pincus Advisor Emerging Growth Fund 28,040 9,235 INVESCO Total Return Fund 28,036 22,967 INVESCO Industrial Income Fund -- 8,666 Participant Loans 50,648 45,221 ----------- ----------- Net assets available for benefits $ 1,673,667 $ 1,445,464 =========== =========== The Notes to Financial Statements are an integral part of these statements. -2- 11-K-6
SAVINGS AND INVESTMENT PLUS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years Ended December 31, 1997 1996 ------ ------ (In thousands) Investment income Interest and dividends $ 64,915 $ 64,426 Net appreciation in fair value of CIGNA stock 29,912 27,248 Net investment gain from separate accounts 112,262 54,882 ----------- ----------- Total investment income 207,089 146,556 ----------- ----------- Contributions Employees' contributions 76,321 71,741 Employer's contributions 28,609 28,882 Rollover contributions 6,458 4,461 ----------- ----------- Total contributions 111,388 105,084 ----------- ----------- Benefits paid (90,274) (77,382) ----------- ----------- Transfers to other plans -- (40,972) ----------- ----------- Net increase 228,203 133,286 Net assets available for benefits Beginning of year 1,445,464 1,312,178 ----------- ----------- End of year $ 1,673,667 $ 1,445,464 =========== =========== The Notes to Financial Statements are an integral part of these statements. -3- 11-K-7
SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS Note 1 - Description of the Plan Generally, all domestic employees of CIGNA Corporation (CIGNA) and its participating subsidiaries who have completed at least one year of service are eligible to participate in the Savings and Investment Plus Plan (the Plan), a defined contribution plan. The following description of the Plan provides general information only. A more complete explanation of the features and benefits available under the Plan is contained in the Summary Plan Description and Prospectus. Contributions - ------------- The Plan permits tax-deferred contributions to a maximum of 16% of a participant's eligible earnings. Eligible earnings were limited to $160,000 and $150,000 in 1997 and 1996, respectively. Tax-deferred contributions are accomplished by means of an employee's election, pursuant to Section 401(k) of the Internal Revenue Code (IRC), to have an amount withheld by the employer from the employee's compensation, and for the employer to remit to the employee's plan account an amount equal to such withholding. Tax-deferred contributions are also referred to herein as "employee contributions." Under the IRC, tax-deferred contributions were limited to $9,500 in 1997 and 1996. To comply with anti-discrimination provisions, tax-deferred contributions for highly compensated employees were limited to 7% and 6% of eligible earnings in 1997 and 1996, respectively. CIGNA companies made matching contributions in an amount equal to 50% of the first 6% of eligible earnings contributed by participants. These matching contributions are referred to herein as "employer contributions." Beginning with the 1998 plan year, CIGNA may provide an additional matching contribution. This additional matching contribution would be made at CIGNA's discretion after the close of the plan year, based on an assessment of CIGNA's performance for the plan year. Each contribution would range from zero to two percent of a participant's eligible earnings and would be invested in the CIGNA Stock Fund. The Plan may accept rollover contributions. Rollover contributions represent distributions received from other employer-sponsored, tax qualified pension or profit sharing plans. Distributions from other plans are subject to certain conditions to be eligible for rollover into the Plan. Vesting - ------- Employee contributions, including related investment earnings, are fully vested at all times. Employer contributions and related investment earnings vest 20% for each year of vesting service. Participants earn a year of vesting service if they have 1,000 hours of service during the calendar year period. Early vesting rules may apply upon joining the Plan if the participant was previously employed by a CIGNA company or had an account in certain plans that have since merged into the Plan. Employer contributions and related investment earnings are fully vested upon an employee's attainment of age 65, death or total and permanent disability. -4- 11-K-8 SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS Full vesting would also occur if a participating CIGNA company is sold and does not maintain a successor plan, if CIGNA discontinues matching contributions or if the Plan is terminated. Upon termination of a participant's employment, that portion of employer contributions and related investment earnings which are not vested are forfeited. Forfeited amounts are used to reduce future employer contributions. Forfeitures of approximately $605,000 and $100,000 were used to reduce employer contributions in 1997 and 1996, respectively. Loans - ----- The Plan permits participants to borrow a portion of their account, subject to certain limitations, at an annual rate of interest with a specified repayment period. The minimum amount that can be borrowed is $1,000; the maximum total loan amount is the lesser of $50,000 or 50% of the participant's vested account balance. A participant may have no more than two outstanding loans. Loan terms range from 12 to 60 months, or up to 120 months if the loan is used to buy or build a participant's primary residence. Loan interest rates remain fixed during the term of the loan. The loan is secured by the participant's account balance. Generally, loan repayments are made by payroll deduction. Both the interest and principal portions of every repayment are allocated to the participant account according to the investment election in effect at the time of the repayment. The interest portion of every repayment is added to the participant's account balance as earnings. If a default occurs, the amount of the outstanding loan balance is treated as a distribution to the participant. The defaulting participant is subject to immediate taxation on the taxable portion of the defaulted amount, including a possible 10% penalty tax. As soon as permitted by law, the loan account balance is reduced to zero and the participant's account balance is reduced by the amount of the defaulted loan. Payment of Benefits - ------------------- Participants may withdraw funds subject to the requirements of the Plan, and such withdrawals may be subject to immediate taxation and a possible 10% penalty tax. On termination of employment due to death, disability, retirement or other reasons, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested account balance, monthly installments for up to 30 years, an annuity, or a combination of these forms. To the extent amounts are invested in the CIGNA Stock Fund, a participant may elect to receive such amounts in CIGNA common stock. Transfers to Other Plans - ------------------------ In accordance with agreements related to the disposition of certain operations of CIGNA, the account balances of certain participants were transferred during 1996 to plans maintained by the acquirers of these operations. -5- 11-K-9 SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS Investments - ----------- Plan participants may elect to invest in any combination of several funds, and are permitted to transfer assets, subject to certain restrictions, among the funds. Some of the funds are pooled with investments made by other benefit plans or investors in separate accounts. Fixed Income Fund - Contributions to this investment option are invested in a - ----------------- group fixed annuity contract issued by Connecticut General Life Insurance Company (CGLIC), a CIGNA subsidiary. CGLIC guarantees the principal and accumulated interest of all monies deposited. An annual rate of interest is declared in advance and subject to change. CIGNA Stock Fund - Contributions to this investment option are invested in - ---------------- shares of CIGNA common stock. Such shares presently are purchased on the open market but may be acquired directly from CIGNA. From time to time, a portion of CIGNA Stock Fund assets may be invested in short-term investments. Fidelity Advisor Growth Opportunities Fund - Contributions to this investment - ------------------------------------------ option are invested in Separate Account 55A (SA-55A) of CGLIC. All the assets of this pooled account are invested in Class T shares of the Fidelity Advisor Growth Opportunities Fund, a mutual fund. The fund's objective is long-term capital growth. The fund's portfolio consists primarily of common stocks or securities convertible into common stocks. Stock Market Index Fund - Contributions to this investment option are invested - ----------------------- in Separate Account B (SA-B) of CGLIC, a pooled common stock fund. The fund's objective is to match the performance of the Standard & Poor's 500 Composite Stock Price Index. Founders Growth Fund - Contributions to this investment option began November - -------------------- 15, 1996, and are invested in Separate Account 55JR (SA-55JR) of CGLIC. All the assets of this pooled account are invested in the Founders Growth Fund, a mutual fund. The fund's objective is long-term capital growth. The fund's portfolio consists primarily of common stocks of high-quality growth companies. International Equity Fund - Contributions to this investment option are invested - ------------------------- in Separate Account I (SA-I) of CGLIC, a pooled common stock fund. The fund's objective is to invest primarily in stocks of a diversified group of non-U.S. companies that have the potential to provide superior returns. Warburg Pincus Advisor Emerging Growth Fund - Contributions to this investment - ------------------------------------------- option began November 15, 1996, and are invested in Separate Account 55G (SA-55G) of CGLIC. All the assets of this pooled account are invested in the Warburg Pincus Advisor Emerging Growth Fund, a mutual fund. The fund's objective is maximum capital appreciation. The fund's portfolio consists primarily of common stocks or warrants of small to medium-sized domestic companies with emerging or renewed growth potential. -6- 11-K-10 SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS INVESCO Total Return Fund - Contributions to this investment option are invested - ------------------------- in Separate Account 55K (SA-55K) of CGLIC. All the assets of this pooled account are invested in the INVESCO Total Return Fund, a mutual fund. The fund's objective is to provide a high return on investment through both capital appreciation and current income. The fund's portfolio consists of equity securities (common stocks and, to a lesser extent, securities convertible into common stocks) and fixed income securities (primarily obligations of the U.S. government and government-backed agencies). This investment option was eliminated from the Plan on February 27, 1998. Any balances in the fund on this date were transferred into the Fixed Income Fund. INVESCO Industrial Income Fund - This investment option was eliminated from the - ------------------------------ Plan on January 31, 1997. Any balances in the fund on this date were transferred into the CIGNA Stock Market Index Fund. Contributions to this investment option had been invested in Separate Account 55J (SA-55J) of CGLIC. All the assets of this pooled account are invested in the INVESCO Industrial Income Fund, a mutual fund. New Investment Options - Effective January 1, 1998, the Plan added three new - ---------------------- investment options. o Templeton Foreign Fund - Contributions to this investment option will ---------------------- be invested in Separate Account 55HS of CGLIC. All the assets of this pooled account are invested in Class I shares of the Templeton Foreign Fund, a mutual fund, whose objective is long-term capital growth. o Barclays Equity Market Index Fund - Contributions to this investment --------------------------------- option will be invested in Separate Account BGI of CGLIC. All the assets of this pooled account are invested in the Barclays Daily Extended Equity Market Fund, a commingled trust fund, whose objective is to approximate the performance of the Barclays Extended Market Index. o State Street Global Advisors EAFE Index Fund - Contributions to this -------------------------------------------- investment option will be invested in Separate Account 55A1 of CGLIC. All the assets of this pooled account are invested in the State Street Global Advisors EAFE Index Fund, a commingled trust fund, whose objective is to match the total return of the Morgan Stanley Capital International Europe, Australia and Far East (EAFE) Index. Plan Termination - ---------------- CIGNA intends to continue the Plan indefinitely, but reserves the right to discontinue contributions or terminate the Plan in whole or in part at any time. If contributions are discontinued or the Plan is terminated, affected participants will become fully vested. Upon Plan termination, net assets of the Plan will be distributed in the manner CIGNA elects and in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and its related regulations. -7- 11-K-11 SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS Plan Trustee - ------------ Mellon Bank (East) N.A., Philadelphia, Pennsylvania is the Trustee for the Plan. Note 2 - Significant Accounting Policies Basis of Presentation - --------------------- The financial statements have been prepared on the accrual basis of accounting in conformity with generally accepted accounting principles. Valuation of Investments - ------------------------ Plan investments are reported at fair value. The fair value of the Fixed Income Fund is equivalent to its contract value. Contract value represents the aggregate amount on deposit, including accumulated interest. The fair value of CIGNA common stock is based upon quoted market price. Fair value of CGLIC's separate accounts is measured by the net unit value, which is based on the fair value of the underlying assets of the account. Net investment gain from separate accounts results from the increase in net unit value. Payment of Benefits - ------------------- Benefits are recorded when paid. Plan Expenses - ------------- The investment results of all funds except the CIGNA Stock Fund are net of management fees, investment expenses, risk charges and administrative costs charged by CGLIC. Brokers' commissions resulting from buying or selling stock in the CIGNA Stock Fund are paid from the participants' accounts and have been reflected as a reduction of the CIGNA Stock Fund's investment income in these financial statements. Other costs associated with the operation of the Plan, including trustee and legal fees, are paid by CIGNA. -8- 11-K-12 SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS Note 3 - Investments An analysis of the changes in net assets available for benefits by investment fund for the year ended December 31, 1997 is presented below.
Fidelity Advisor Growth Founders Fixed CIGNA Opportunities Stock Market Growth International Year Ended December 31, 1997 Income Fund Stock Fund Fund Index Fund Fund Equity Fund - ---------------------------------- ----------- ---------- ------------- ------------ -------- ------------- (In thousands) Investment income Interest and dividends $ 58,541 $ 2,926 $ -- $ -- $ -- $ -- Net appreciation in fair value of CIGNA stock -- 29,912 -- -- -- -- Net investment gain (loss) from separate accounts -- -- 65,617 32,244 5,585 (872) ----------- ----------- ----------- ----------- ----------- ----------- Total investment income 58,541 32,838 65,617 32,244 5,585 (872) ----------- ----------- ----------- ----------- ----------- ----------- Contributions Employees' contributions 30,285 9,214 17,699 8,345 3,306 2,977 Employer's contributions 11,418 3,489 6,660 3,083 1,176 1,134 Rollover contributions 1,715 754 1,077 894 839 190 ----------- ----------- ----------- ----------- ----------- ----------- Total contributions 43,418 13,457 25,436 12,322 5,321 4,301 ----------- ----------- ----------- ----------- ----------- ----------- Loan principal repayments 11,372 2,569 4,316 1,797 770 604 Loan interest received - allocated 1,755 398 667 270 105 104 Loans issued (18,026) (2,829) (4,637) (1,902) (613) (600) Benefits paid (59,311) (6,776) (12,732) (5,344) (809) (1,225) Interfund transfers (42,977) 9,198 (5,751) 21,353 20,307 (2,693) ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) (5,228) 48,855 72,916 60,740 30,666 (381) Net assets available for benefits Beginning of year 891,281 113,215 227,302 84,101 13,362 30,114 ----------- ----------- ----------- ----------- ----------- ----------- End of year $ 886,053 $ 162,070 $ 300,218 $ 144,841 $ 44,028 $ 29,733 =========== =========== =========== =========== =========== ===========
Warburg Pincus Advisor INVESCO INVESCO Emerging Total Industrial Participant Year Ended December 31, 1997 Growth Fund Return Fund Income Fund Loans Total - ---------------------------------- ----------- ----------- ----------- ----------- ----- (In thousands) Investment income Interest and dividends $ -- $ -- $ -- $ 3,448 $ 64,915 Net appreciation in fair value of CIGNA stock -- -- -- -- 29,912 Net investment gain (loss) from separate accounts 3,277 6,138 273 -- 112,262 ----------- ----------- ----------- ----------- ----------- Total investment income 3,277 6,138 273 3,448 207,089 ----------- ----------- ----------- ----------- ----------- Contributions Employees' contributions 2,250 2,180 65 -- 76,321 Employer's contributions 821 802 26 -- 28,609 Rollover contributions 584 401 4 -- 6,458 ----------- ----------- ----------- ----------- ----------- Total contributions 3,655 3,383 95 -- 111,388 ----------- ----------- ----------- ----------- ----------- Loan principal repayments 546 452 10 (22,436) -- Loan interest received - allocated 74 73 2 (3,448) -- Loans issued (372) (485) (12) 29,476 -- Benefits paid (1,003) (1,429) (32) (1,613) (90,274) Interfund transfers 12,628 (3,063) (9,002) -- -- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) 18,805 5,069 (8,666) 5,427 228,203 Net assets available for benefits Beginning of year 9,235 22,967 8,666 45,221 1,445,464 ----------- ----------- ----------- ----------- ----------- End of year $ 28,040 $ 28,036 $ -- $ 50,648 $ 1,673,667 =========== =========== =========== =========== =========== -9- 11-K-13
SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS An analysis of the changes in net assets available for benefits by investment fund for the year ended December 31, 1996 is presented below.
Fidelity Advisor Growth Founders Fixed CIGNA Opportunities Stock Market Growth International Year Ended December 31, 1996 Income Fund Stock Fund Fund Index Fund Fund Equity Fund - --------------------------------------------- ----------- ---------- ------------- ------------ -------- ------------- (In thousands) Investment income Interest and dividends $ 58,907 $ 2,610 $ -- $ -- $ -- $ -- Net appreciation in fair value of CIGNA stock -- 27,248 -- -- -- -- Net investment gain (loss) from separate accounts -- -- 34,381 13,433 (213) 1,785 ----------- ----------- ----------- ----------- ----------- ----------- Total investment income 58,907 29,858 34,381 13,433 (213) 1,785 ----------- ----------- ----------- ----------- ----------- ----------- Contributions Employees' contributions 34,990 6,814 17,605 5,265 117 2,908 Employer's contributions 14,415 2,712 6,966 2,040 43 1,148 Rollover contributions 1,358 710 1,189 564 35 197 ----------- ----------- ----------- ----------- ----------- ----------- Total contributions 50,763 10,236 25,760 7,869 195 4,253 ----------- ----------- ----------- ----------- ----------- ----------- Loan principal repayments 11,233 1,598 3,589 952 30 596 Loan interest received - allocated 1,717 264 563 151 5 97 Loans issued (19,073) (1,908) (3,670) (996) (7) (512) Benefits paid (55,883) (5,184) (9,158) (2,611) (6) (1,037) Transfers to other plans (27,419) (1,673) (6,684) (1,543) -- (581) Interfund transfers (31,132) (1,368) (5,872) 17,531 13,358 6,366 ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) (10,887) 31,823 38,909 34,786 13,362 10,967 Net assets available for benefits Beginning of year 902,168 81,392 188,393 49,315 -- 19,147 ----------- ----------- ----------- ----------- ----------- ----------- End of year $ 891,281 $ 113,215 $ 227,302 $ 84,101 $ 13,362 $ 30,114 =========== =========== =========== =========== =========== ===========
Warburg Pincus Advisor INVESCO INVESCO Emerging Total Industrial Participant Year Ended December 31, 1996 Growth Fund Return Fund Income Fund Loans Total - --------------------------------------------- ----------- ----------- ------------ ----------- ----- (In thousands) Investment income Interest and dividends $ -- $ -- $ -- $ 2,909 $ 64,426 Net appreciation in fair value of CIGNA stock -- -- -- -- 27,248 Net investment gain (loss) from separate accounts 147 2,510 2,839 -- 54,882 ----------- ----------- ----------- ----------- ----------- Total investment income 147 2,510 2,839 2,909 146,556 ----------- ----------- ----------- ----------- ----------- Contributions Employees' contributions 89 1,976 1,977 -- 71,741 Employer's contributions 33 764 761 -- 28,882 Rollover contributions 13 202 193 -- 4,461 ----------- ----------- ----------- ----------- ----------- Total contributions 135 2,942 2,931 -- 105,084 ----------- ----------- ----------- ----------- ----------- Loan principal repayments 28 367 335 (18,728) -- Loan interest received - allocated 3 60 49 (2,909) -- Loans issued (1) (334) (305) 26,806 -- Benefits paid (5) (926) (559) (2,013) (77,382) Transfers to other plans -- (455) (323) (2,294) (40,972) Interfund transfers 8,928 2,663 (10,474) -- -- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) 9,235 6,827 (5,507) 3,771 133,286 Net assets available for benefits Beginning of year -- 16,140 14,173 41,450 1,312,178 ----------- ----------- ----------- ----------- ----------- End of year $ 9,235 $ 22,967 $ 8,666 $ 45,221 $ 1,445,464 =========== =========== =========== =========== =========== -10- 11-K-14
SAVINGS AND INVESTMENT PLUS PLAN NOTES TO FINANCIAL STATEMENTS Note 4 - Tax Status A favorable determination letter was received from the Internal Revenue Service (IRS) for the Plan and all Plan amendments through December 31, 1994, indicating that the Plan was in compliance with the applicable requirements of the IRC. The Plan has been amended since receiving the determination letter. However, management believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. Note 5 - Related Party Transactions There are transactions between the Plan and CIGNA and its affiliates which, in the opinion of Plan management, are exempt from detailed reporting under Title I of ERISA. Investments in CGLIC's separate accounts represent investments for which CGLIC has fiduciary responsibility. Investment in the Fixed Income Fund represents participation in the general account assets of CGLIC. CGLIC is the Plan's recordkeeper. Note 6 - Subsequent Event CIGNA acquired Healthsource, Inc. in June 1997. In February 1998, assets of approximately $45 million were transferred into the Plan from the Healthsource Retirement Savings Plan. -11- 11-K-15 SUPPLEMENTAL SCHEDULES 11-K-16
SAVINGS AND INVESTMENT PLUS PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES As of December 31, 1997 (Dollars in thousands) Current Identity of Party Description Cost Value ------------------ ---------------------------------------------------------- -------------- -------------- CGLIC Fixed Income Fund $ 886,053 $ 886,053 CIGNA CIGNA Stock Fund CIGNA common stock- 935,310 shares 97,611 161,224 Short-term investments 76 76 CGLIC Fidelity Advisor Growth Opportunities Fund 191,440 300,218 CGLIC Stock Market Index Fund 101,783 144,841 CGLIC Founders Growth Fund 39,624 44,028 CGLIC International Equity Fund 29,483 29,733 CGLIC Warburg Pincus Advisor Emerging Growth Fund 25,230 28,040 CGLIC INVESCO Total Return Fund 21,131 28,036 CGLIC Participant Loans (5.14% to 12.95%; maturity 1998-2007) 50,648 ------------- Total assets held for investment purposes 1,672,897 Investment income receivable (CIGNA Stock Fund) 770 ------------- Net assets available for benefits $ 1,673,667 ============= -13- 11-K-17
SAVINGS AND INVESTMENT PLUS PLAN SCHEDULE OF REPORTABLE TRANSACTIONS For the Year Ended December 31, 1997 (In thousands) Sales ------------------------------------------------ Party Involved Description of Asset Purchases Proceeds Cost Net Gain - ------------------- ---------------------------- ------------ ------------- ------------ ------------ CGLIC Fixed Income Fund $ 136,857 $ 200,626 $ 200,626 $ - CIGNA CIGNA Stock Fund 46,352 27,521 15,533 11,988 CGLIC Fidelity Advisor Growth Opportunities Fund 67,567 60,268 42,192 18,076 CGLIC Stock Market Index Fund 61,411 32,915 23,220 9,695 -14- 11-K-18
SAVINGS AND INVESTMENT PLUS PLAN SCHEDULE OF LOANS IN DEFAULT As of December 31, 1997 (In thousands) Original Amounts Received Unpaid Amounts of During 1997 Balances at Amounts Obligor Loans Principal Interest End of Year Overdue - --------------------- ---------------- ----------------------------------- -------------- ------------- Various $ 720 $ 13 $ 2 $ 381 $ 381 -15- 11-K-19
Exhibits -------- Exhibits are listed in the Index to Exhibits appearing on page E-1. Signatures ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. SAVINGS AND INVESTMENT PLUS PLAN Date: June 29, 1998 By: /s/ Stewart M. Beltz -------------------- Stewart M. Beltz Plan Administrator 11-K-20 Index to Exhibits Method of Number Description Filing 23 Consent of Filed herewith Independent Accountants -E-1- EX-23 2 Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-51791) of CIGNA Corporation of our report dated June 12, 1998, appearing on page 11-K-5 of this Form 11-K. /s/ PRICE WATERHOUSE LLP Philadelphia, Pennsylvania June 26, 1998 -E-2- -----END PRIVACY-ENHANCED MESSAGE-----