-----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, N4Sp+Ewl9cd7xQGW+lDSlFOnBlWUrkO2Nn/yC1r6qwlfFV1+T5cHwcynjl4S1Ofi 0DKUALnhEbZ/sRH45eYueQ== /in/edgar/work/0000881453-00-000304/0000881453-00-000304.txt : 20001025 0000881453-00-000304.hdr.sgml : 20001025 ACCESSION NUMBER: 0000881453-00-000304 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20001024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN SKANDIA LIFE ASSURANCE CORP/CT CENTRAL INDEX KEY: 0000881453 STANDARD INDUSTRIAL CLASSIFICATION: [6399 ] IRS NUMBER: 061241288 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-00995 FILM NUMBER: 744624 BUSINESS ADDRESS: STREET 1: ONE CORPORATE DRIVE CITY: SHELTON STATE: CT ZIP: 06484 BUSINESS PHONE: 2039261888 MAIL ADDRESS: STREET 1: ONE CORPORATE DRIVE CITY: SHELTON STATE: CT ZIP: 06484 424B3 1 0001.txt ASAP S2 DEFINITIVE Supplement to Prospectus Dated May 1, 2000 Supplement dated October 23, 2000 This Supplement should be retained with the current Prospectus for your variable annuity contract issued by American Skandia Life Assurance Corporation ("American Skandia"). If you do not have a current prospectus, please contact American Skandia at 1-800-SKANDIA. A. NOTICE OF SUBSTITUTION American Skandia has filed an exemptive application with the Securities and Exchange Commission ("SEC") to substitute the following "Replaced Portfolio/Sub-Account" with the "Substitute Portfolio/Sub-account". The Replaced Portfolios/Sub-accounts described below are only available until the effective date of the Substitution, at which time they will cease to be offered as investment options. The Substitute Portfolios/Sub-accounts are only available as of the date of the Fund Substitution and are only available to those Contract Owners affected by the Fund Substitution.
- --------------------------------------------------------- ---------- --------------------------------------------------------------- REPLACED PORTFOLIO/SUB-ACCOUNT SUBSTITUTE PORTFOLIO/SUB-ACCOUNT - --------------------------------------------------------- ---------- --------------------------------------------------------------- Alger American Growth portfolio of The Alger American Fund/AA AST Alger Growth portfolio of American Skandia Trust/AST Growth Sub-account Alger Growth Sub-account - --------------------------------------------------------------- -------- ----------------------------------------------------------- The Alger American Fund - Growth: seeks long-term capital AST Alger Growth: seeks long-term capital growth. The appreciation. The Portfolio focuses on growing companies Portfolio invests primarily in equity securities, such as that generally have broad product lines, markets, financial common or preferred stocks, that are listed on U.S. resources and depth of management. Under normal exchanges or in the over-the-counter market. The Portfolio circumstances, the Portfolio invests primarily in the equity focuses on growing companies that generally have broad securities of large companies. The Portfolio considers a product lines, markets, financial resources and depth of large company to have a market capitalization of $1 billion management. The Portfolio normally invests at least 65% or greater. of its total assets in equity securities of companies that, at the time of purchase of the securities, have total market capitalizations of $1 billion or greater. - --------------------------------------------------------------- --- ---- ----------------------------------------------------------- - --------------------------------------------------------------- -------- ----------------------------------------------------------- Alger American MidCap Growth portfolio of The Alger American AST Alger Mid-Cap Growth portfolio of American Skandia Fund/AA MidCap Growth Sub-account Trust/AST Alger Mid-Cap Growth Sub-account - --------------------------------------------------------------- -------- ----------------------------------------------------------- - --------------------------------------------------------------- --- ---- ----------------------------------------------------------- The Alger American Fund - MidCap Growth: seeks long-term AST Alger Mid-Cap Growth: seeks long-term capital growth. capital appreciation. The Portfolio focuses on midsize The Portfolio invests primarily in equity securities, such companies with promising growth potential. Under normal as common or preferred stocks, that are listed on U.S. circumstances, the Portfolio invests primarily in the equity exchanges or in the over-the-counter market. Under normal securities of companies having a market capitalization within circumstances, the Portfolio invests primarily in the the range of companies in the S&P MidCap 400 Index equity securities of companies having a market capitalization within the range of companies in the S&P MidCap 400 Index. - --------------------------------------------------------------- --- ---- -----------------------------------------------------------
We expect to receive the SEC Exemptive Order and complete the Substitution by the end of November 2000. Those Contract Owners effected by the Substitution will receive additional information from American Skandia notifying them of their rights under the SEC Exemptive Order. For a 30 day period following the Substitution, Contract Owners will be allowed to transfer Account Value out of the Replaced Portfolio/Sub-account to any other investment options available under the Annuity. Any such transfers during this period will not count in determining whether the maximum number of free transfers has been exceeded. Additionally, the transfer of Account Value from the Replaced Portfolio/Sub-account to the Substitute Portfolio/Sub-account would also not be subject to a transfer fee nor count in determining whether the maximum number of free transfers have been exceeded. The Substitution will not affect your rights or our obligations under the Annuity and American Skandia will bear any expenses in connection with the Substitution. B. ADDITIONAL VARIABLE INVESTMENT OPTIONS The underlying Portfolios shown below are being offered as Sub-accounts under your Annuity.
- ------------------------------------------------------------------------------------------------------------------------------------ Underlying Mutual Fund Portfolio Annual Expenses (as a percentage of the average net assets of the underlying Portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ - --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ---------- Management Other 12b-1 Fees Total Annual Fee Net Fees Expenses Portfolio Waivers and Annual UNDERLYING PORTFOLIO Operating Expense Fund Expenses Reimbursement(1) Operating Expenses - --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ---------- American Skandia Trust: (2) AST Scudder Japan 3 1.00% 0.36% 0.04% 1.40% 0.00% 1.40% AST Federated Aggressive Growth 3 0.95% 0.23% 0.04% 1.22% 0.00% 1.22% AST Alger Mid-Cap Growth 4 0.80% 0.23% 0.00% 1.03% 0.18% 0.85% AST Alger Growth 4 0.75% 0.23% 0.00% 0.98% 0.19% 0.79% AST Kinetics Internet 3 1.00% 0.23% 0.04% 1.27% 0.00% 1.27% AST Janus Strategic Value 3 1.00% 0.23% 0.04% 1.27% 0.00% 1.27% AST Lord Abbett Bond-Debenture 3 0.80% 0.23% 0.04% 1.07% 0.00% 1.07% AST Gabelli All-Cap Value 3 0.95% 0.23% 0.04% 1.22% 0.00% 1.22% Wells Fargo Variable Trust: WFVT Equity Income 0.55% 0.37% 0.25% 1.17% 0.17% 1.00% - --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ----------
1 The Investment Manager of American Skandia Trust has agreed to reimburse and/or waive fees for certain Portfolios until at least April 30, 20001. The caption "Total Annual Fund Operating Expenses" reflects the Portfolios' fees and expenses before such waivers and reimbursements, while the caption "Net Annual Fund Operating Expenses" reflects the effect of such waivers and reimbursements. 2 American Skandia Trust (the "Trust") adopted a Distribution Plan (the "Distribution Plan") under Rule 12b-1 of the Investment Company Act of 1940 to permit an affiliate of the Trust's Investment Manager to receive brokerage commissions in connection with purchases and sales of securities held by Portfolios of the Trust, and to use these commissions to promote the sale of shares of such Portfolios. The staff of the Securities and Exchange Commission takes the position that commission amounts received under the Distribution Plan should be reflected as distribution expenses of the Portfolios. The Portfolios would pay the same or comparable commission amounts irrespective of the Distribution Plan; accordingly, total returns for the Portfolios are not expected to be adversely affected. The Distribution Fee estimates are derived from data regarding each Portfolio's brokerage transactions, and the proportions of such transactions directed to selling dealers, for the period ended December 31, 1999. However, it is not possible to determine with accuracy actual amounts that will be received under the Distribution Plan. Such amounts will vary based upon the level of a Portfolio's brokerage activity, the proportion of such activity directed under the Distribution Plan, and other factors. 3 These Portfolios commenced operations in October 2000. "Other Expenses" and "12b-1 Fees" shown are based on estimated amounts for the fiscal year ending December 31, 2000. 4 These Portfolios commenced operations in October 2000, however, they are only available as of the date of the Fund Substitution and are only available to those Contract Owners affected by the Fund Substitution. "Other Expenses" and "12b-1 Fees" shown are based on estimated amounts for the fiscal year ending December 31, 2000. EXPENSE EXAMPLES The Expense Examples shown below are being added with respect to the new Portfolios that are being offered as Sub-accounts under your Annuity.
- ------------------------------------------------------------------------------------------------------------------------------------ Expense Examples (amounts shown are rounded to the nearest dollar) - ------------------------------------------------------------------------------------------------------------------------------------ -------------------------------------------- ----- ---------------------------------------- If you surrender your Annuity at the If you do not surrender your end of the applicable time period, you Annuity at the end of the would pay the following expenses on a applicable time period or begin $1,000 investment, assuming 5% annual taking annuity payments at such return on assets: time, you would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets: -------------------------------------------- ----- ------------------------------------------ After: After: - ------------------------------------------------------------------------------------------------------------------------------------ - -------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ------ Sub-Account: 1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ---------- - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ---------- AST Scudder Japan 104 144 187 320 29 89 152 320 AST Federated Aggressive Growth 102 139 178 303 27 84 143 303 AST Alger Mid-Cap Growth 99 128 159 265 24 73 124 265 AST Alger Growth 98 126 157 260 23 71 122 260 AST Kinetics Internet 103 141 181 308 28 86 146 308 AST Janus Strategic Value 103 141 181 308 28 86 146 308 AST Lord Abbett Bond-Debenture 101 134 170 287 26 79 135 287 AST Gabelli All-Cap Value 102 139 178 303 27 84 143 303 WFVT Equity Income 100 132 167 280 25 77 132 280 - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
The Expense Examples for the PSA prior contract are as follows:
-------------------------------------------- ----- ------------------------------------------ If you surrender your Annuity at the If you do not surrender your end of the applicable time period, you Annuity at the end of the would pay the following expenses on a applicable time period or begin $1,000 investment, assuming 5% annual taking annuity payments at such return on assets: time, you would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets: -------------------------------------------- ----- ------------------------------------------ After: After: - ------------------------------------------------------------------------------------------------------------------------------------ - -------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ------ Sub-Account: 1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ---------- - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ---------- AST Scudder Japan 99 139 182 320 29 89 152 320 AST Federated Aggressive Growth 97 134 173 303 27 84 143 303 AST Alger Mid-Cap Growth 94 123 154 265 24 73 124 265 AST Alger Growth 93 121 152 260 23 71 122 260 AST Kinetics Internet 98 136 176 308 28 86 146 308 AST Janus Strategic Value 98 136 176 308 28 86 146 308 AST Lord Abbett Bond-Debenture 96 129 165 287 26 79 135 287 AST Gabelli All-Cap Value 97 134 173 303 27 84 143 303 WFVT Equity Income 95 127 162 280 25 77 132 280 - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
The Expense Examples for contracts sold outside of the State of New York are as follows:
-------------------------------------------- ----- ------------------------------------------ If you surrender your Annuity at the If you do not surrender your end of the applicable time period, you Annuity at the end of the would pay the following expenses on a applicable time period or begin $1,000 investment, assuming 5% annual taking annuity payments at such return on assets: time, you would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets: -------------------------------------------- ----- ------------------------------------------ After: After: - ------------------------------------------------------------------------------------------------------------------------------------ - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ---------- Sub-Account: 1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ---------- - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ---------- AST Scudder Japan 104 149 192 320 29 89 152 320 AST Federated Aggressive Growth 102 144 183 303 27 84 143 303 AST Alger Mid-Cap Growth 99 133 164 265 24 73 124 265 AST Alger Growth 98 131 162 260 23 71 122 260 AST Kinetics Internet 103 146 186 308 28 86 146 308 AST Janus Strategic Value 103 146 186 308 28 86 146 308 AST Lord Abbett Bond-Debenture 101 139 175 287 26 79 135 287 AST Gabelli All-Cap Value 102 144 183 303 27 84 143 303 WFVT Equity Income 100 137 172 280 25 77 132 280 - ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
The following is being added to the section entitled "Investment Options?" INVESTMENT OPTIONS WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?
- ------------------- ---------------------------------------------------------------------------------------- ----------------------- PORTFOLIO STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/ TYPE SUB-ADVISOR - ------------------- ------------------------------------------------------------------------------------------------ --------------- - ------------------- ------------------------------------------------------------------------------------------------ --------------- AST Scudder Japan: seeks long-term capital growth. The Scudder Kemper Portfolio pursues its investment objective by investing at Investments, Inc. least 80% of net assets in Japanese securities (those issued by Japan-based companies or their affiliates, or by any INTER-NATIONAL company that derives more than half of its revenues from EQUITY Japan). The Portfolio may invest in stocks of any size, including up to 30% of its net assets in smaller companies that are traded over-the-counter. The Portfolio's focus on a single country could give rise to increased risk, as the Portfolio's investments will not be diversified among countries having varying characteristics and market performance. - ------------------------------------------------------------------------------------------------ ----------------------------------- - ------------------- ------------------------------------------------------------------------------------------------ --------------- AST Federated Aggressive Growth: seeks capital growth. The Federated Investment Portfolio pursues its investment objective by investing in Counseling equity securities of companies offering superior prospects for earnings growth. The Portfolio focuses its investments SMALL CAP on the equity securities of smaller companies, but it is not GROWTH subject to any specific market capitalization requirements. The Portfolio may invest in foreign issuers through American Depositary Receipts. The Portfolio's strategies with respect to security analysis, market capitalization and sector allocation are designed to produce a portfolio of stocks whose long-term growth prospects are significantly above those of the S&P 500 Index. - ------------------- ------------------------------------------------------------------------------------------------ --------------- - ------------------- ------------------------------------------------------------------------------------------------ --------------- PORTFOLIO STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/ TYPE SUB-ADVISOR - ------------------- ------------------------------------------------------------------------------------------------ --------------- - ------------------------------------------------------------------------------------------------------------------------------------ Sector funds generally diversify their investments across particular economic sectors or a single industry. However, because those investments are limited to a comparatively narrow segment of the economy, sector funds are generally not as diversified as most mutual funds. Sector funds tend to be more volatile than other types of funds. The value of fund shares may go up and down more rapidly than other funds. Each sector of the economy may also have different regulatory or other risk factors that can cause greater fluctuations in the share price. Please read the prospectus for the underlying sector fund for further details about the risks of the particular sector of the economy. - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------- ------------------------------------------------------------------------------------------------ --------------- AST Kinetics Internet: seeks long-term growth of capital. Kinetics Asset Under normal circumstances, the Portfolio invests at least Management,Inc. 65% of its total assets in common stocks, convertible securities, warrants and other equity securities having the characteristics of common stocks, such as American SECTOR Depositary Receipts and International Depositary Receipts, of domestic and foreign companies that are engaged in the Internet and Internet-related activities. Portfolio securities will be selected by the Sub-advisor from companies that are engaged in the development of hardware, software and telecommunications solutions that enable the transaction of business on the Internet by individuals and companies, as well as companies that offer products and services primarily via the Internet. The Portfolio seeks to invest in the equity securities of companies whose research and development efforts may result in higher stock values. - ------------------- ------------------------------------------------------------------------------------------------ --------------- - ------------------- ------------------------------------------------------------------------------------------------ --------------- AST Janus Strategic Value: seeks long-term growth of Janus Capital capital. The Portfolio pursues its objective by investing Corporation primarily in common stocks with the potential for long-term growth of capital using a "value" approach. This value approach emphasizes investments in companies the Sub-advisor LARGE CAP believes are undervalued relative to their intrinsic worth. VALUE Realization of income is not a significant consideration when choosing investments for the Portfolio. The Portfolio will generally focus on the securities of larger companies, however, it may invest in the securities of smaller companies, including start-up companies offering emerging products or services. - ------------------- ------------------------------------------------------------------------------------------------ --------------- - ------------------- ------------------------------------------------------------------------------------------------ --------------- AST Lord Abbett Bond-Debenture: seeks high current income Lord, Abbett & Co. and the opportunity for capital appreciation to produce a high total return. The Portfolio pursues its objective by normally investing in high yield and investment grade debt securities, securities convertible into common stock and preferred stocks. Under normal circumstances, the Portfolio BOND invests at least 65% of its total assets in fixed income securities of various types. The Portfolio may find good value in high yield securities, sometimes called "lower-rated bonds" or "junk bonds," and frequently may have more than half of its assets invested in those securities. At least 20% of the Portfolio's assets must be invested in any combination of investment grade debt securities, U.S. Government securities and cash equivalents. The Portfolio may also make significant investments in mortgage-backed securities. Although the Portfolio expects to maintain a weighted average maturity in the range of seven to nine years, there are no restrictions on the overall Portfolio or on individual securities. - ------------------- ------------------------------------------------------------------------------------------------ --------------- - ------------------- ------------------------------------------------------------------------------------------------ --------------- AST Gabelli All-Cap Value: seeks capital growth. The GAMCO Investors, Inc. Portfolio pursues its objective by investing primarily in readily marketable equity securities including common stocks, preferred stocks and securities that may be converted at a later time into common stock. The Portfolio ALL-CAP may invest in the securities of companies of all sizes, and EQUITY may emphasize either larger or smaller companies at a given time based on the Sub-advisor's assessment of particular companies and market conditions. The Portfolio focuses on companies that appear underpriced relative to their private market value ("PMV"). PMV is the value that the Portfolio's Sub-advisor believes informed investors would be willing to pay for a company. - ------------------- ------------------------------------------------------------------------------------------------ --------------- - ------------------- ------------------------------------------------------------------------------------------------ --------------- WFVT Equity Income: seeks long-term capital appreciation and Wells Fargo Bank, N.A. above-average dividend income. The Portfolio pursues its objective primarily by investing in the common stocks of large, high-quality domestic companies with above-average EQUITY INCOME return potential based on current market valuations and above-average dividend income. Under normal market conditions, the Portfolio invests at least 65% of its total assets in income producing equity securities and in issues of companies with market capitalizations greater than the median of the Russell 1000 Index. - ------------------- ------------------------------------------------------------------------------------------------ ---------------
C. PORTFOLIO/SUB-ACCOUNT NAME CHANGES 1. Effective October 23, 2000 GAMCO Investors, Inc. will be the new portfolio sub-advisor for the AST T. Rowe Price Small Company Value portfolio. In connection with this change the portfolio's name is changed to "AST Gabelli Small-Cap Growth." 2. Effective August 8, 2000 T. Rowe Price International, Inc. became the new portfolio sub-advisor for the AST T. Rowe Price Global Bond portfolio. D. MAXIMUM NUMBER OF FREE TRANSFERS The maximum number of transfers you can make between investment options each Annuity Year without being subject to a Transfer Fee is increased from twelve (12) to twenty (20). E. PARTIAL EXCHANGES TAX CONSIDERATIONS The following paragraph replaces the corresponding paragraph under the Tax Considerations section in your Annuity prospectus: Special rules in relation to tax-free exchanges under Section 1035: On November 22, 1999, the Internal Revenue Service issued an acquiescence in the decision of the United States Tax Court in Conway v. Commissioner (111 T.C. 350 (1998)) that a taxpayer's partial surrender of a non-qualified annuity contract and direct transfer of the resulting proceeds for the purchase of a new non-qualified annuity contract qualifies as a non-taxable exchange under Section 1035 of the Internal Revenue Code. "Acquiescence" means that the IRS accepts the holding of the Court in a case and that the IRS will follow it in disposing of cases with the same controlling facts. Prior to the Conway decision, industry practice has been to treat a partial surrender of account value as fully taxable to the extent of any gain in the contract for tax reporting purposes and to "step-up" the basis in the contract accordingly. However with the IRS' acquiescence in the Conway decision, partial surrenders may be treated in the same way as tax-free 1035 exchanges of entire contracts, therefore avoiding current taxation of any gains in the contract as well as the 10% IRS tax penalty on pre-age 59 1/2 withdrawals. The IRS reserved the right to treat transactions it considers abusive as ineligible for this favorable partial 1035 exchange treatment. We do not know what transactions may be considered abusive. For example, we do not know how the IRS may view early withdrawals or annuitizations after a partial exchange. As of the date of this prospectus supplement, we will treat a partial surrender of this type as a "tax-free" exchange for future tax reporting purposes, except to the extent that we, as a reporting and withholding agent, believe that we would be expected to deem the transaction to be abusive. However, some insurance companies may not recognize these partial surrenders as tax-free exchanges and may report them as taxable distributions to the extent of any gain distributed as well as subjecting the taxable portion of the distribution to the 10% IRS early distribution penalty. We strongly urge you to discuss any transaction of this type with your tax advisor before proceeding with the transaction. While the principles expressed in the Conway decision appear applicable to partial exchanges from life insurance, there is no guidance from the Internal Revenue Service as to whether it concurs with non-recognition treatment under Section 1035 of the Code for such transactions. We will continue to report a partial surrender of a life insurance policy as subject to current taxation to the extent of any gain. In addition, please be cautioned that no specific guidance has been provided as to the impact of such a transaction for the remaining life insurance policy, particularly as to the subsequent methods to be used to test for compliance under the Code for both the definition of life insurance and the definition of a modified endowment contract. ASAP-SUPP. (10/23/2000) VAASAP 10/23/2000 -----END PRIVACY-ENHANCED MESSAGE-----