Pruco Life Flexible Premium Variable Annuity Account
Filed: 4 Oct 06, 12:00am
October 4, 2006
Ms. Sally Samuel, Esq.
Office of Insurance Products
Division of Investment Management
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
RE: Post-effective amendment under Rule 485(b) under the Securities Act of
1933 to Form N-4 registration statement, file no. 333-75702
Dear Ms. Samuel:
In accordance with our discussions, we have created the following prospectus supplements to disclose the addition of the Highest
Daily Lifetime Five Benefit and certain fund-related changes:
o A supplement of Pruco Life Insurance Company ("Pruco Life") for Strategic Partners Annuity One 3, Strategic Partners Plus 3,
and the subsequent version of Strategic Partners FlexElite discussing the addition of Highest Daily Lifetime Five and the fund
changes; and
o A Pruco Life supplement for Strategic Partners Annuity One, Strategic Partners Plus, Strategic Partners Advisor, Strategic
Partners Select and the former version of Strategic Partners FlexElite discussing the fund changes; and
o A Pruco Life supplement for Prudential Premier, discussing the addition of Highest Daily Lifetime Five and the fund
changes; and
o A Pruco Life of New Jersey supplement for Prudential Premier, discussing the fund changes; and
o A supplement of Pruco Life Insurance Company of New Jersey for Strategic Partners Annuity One 3, Strategic Partners Plus 3,
Strategic Partners Advisor, and Strategic Partners Select discussing the fund changes.
We are filing these draft supplements as correspondence along with this letter. We appreciate your attention to this filing.
Sincerely,
/s/Christopher Sprague
C. Christopher Sprague
Pruco Life Insurance Company
Strategic Partners Annuity One 3
Strategic Partners Plus 3
Strategic Partners FlexElite
Supplement, dated November 20, 2006
To
Prospectuses, dated May 1, 2006
This supplement makes the following changes:
o adds the Highest Daily Lifetime Five Benefit to Strategic Partners Annuity One 3, Strategic Partners Plus 3 and Strategic
Partners FlexElite of Pruco Life Insurance Company ("Pruco Life"); and
o for each of the above-referenced prospectuses, reflects certain changes to the underlying mutual funds
TABLE OF CONTENTS
As a new entry within the line item entitled "Section 5: What Is The Lifetime Five Income Benefit?", we add a line item for
Highest Daily Lifetime Five.
As a new entry at the end of the Table of Contents, we add a reference to Appendix C, entitled "Asset Transfer Formula Under
Highest Daily Lifetime Five Benefit."
GLOSSARY
o We add a definition for "Benefit Fixed Rate Account", that reads as follows: "An investment option offered as part of
this contract that is used only if you have elected the optional Highest Daily Lifetime Five Benefit. Amounts allocated
to the Benefit Fixed Rate Account earn a fixed rate of interest, and are held within our general account. You may not
allocate purchase payments to the Benefit Fixed Rate Account. Rather, contract value is transferred to the Benefit Fixed
Rate Account only under the asset transfer feature of the Highest Daily Lifetime Five Benefit."
o We revise the first sentence of the definition of "Annual Income Amount" to state: "Under the terms of the Lifetime Five
Income Benefit and the Highest Daily Lifetime Five Benefit, an amount that you can withdraw each year as long as the
annuitant lives."
o We revise the first sentence of the definition of "Excess Income/Excess Withdrawal" to state: "Under the Lifetime Five
Income Benefit, Spousal Lifetime Five Income Benefit, and Highest Daily Lifetime Five Benefit, Excess Income refers to
cumulative withdrawals that exceed the Annual Income Amount."
o We add a definition for "Highest Daily Lifetime Five Benefit" that reads as follows: "An optional feature available for
an additional charge that guarantees your ability to withdraw amounts equal to a percentage of a principal value called
the Protected Withdrawal Value. Subject to our rules regarding the timing and amount of withdrawals, we guarantee these
withdrawal amounts, regardless of the impact of market performance on your contract value."
o We revise the definition of "Protected Withdrawal Value" to read as follows: "Under the Lifetime Five Income Benefit,
Spousal Lifetime Five Income Benefit, and Highest Daily Lifetime Five Benefit, an amount that we guarantee regardless of
the investment performance of your contract value. As discussed in Section 5, Protected Withdrawal Value is determined
one way with respect to the Lifetime Five Income Benefit and the Spousal Lifetime Five Income Benefit, and another way
for the Highest Daily Lifetime Five Benefit."
SUMMARY
o We revise the last paragraph of the Section 3 portion of the Summary to read as follows: "The Lifetime Five Income
Benefit, Spousal Lifetime Five Income Benefit, and Highest Daily Lifetime Five Benefit (discussed in Section 5) and the
Income Appreciator Benefit (discussed in Section 6) each may provide an additional amount upon which your annuity
payments are based."
o We add the following as the last paragraph of the Section 5 portion of the Summary, to read as follows: "Finally, we
offer a benefit called the Highest Daily Lifetime Five Benefit. Highest Daily Lifetime Five is similar to our Lifetime
Five and Spousal Lifetime Five benefits, in that under each such benefit, there is a "protected withdrawal value" that
serves as the basis for withdrawals you can make. As we discuss in more detail later, we guarantee this protected
withdrawal value, even if your contract value declines. Thus, as a participant in one of these benefits, you are assured
of a certain amount that you can withdraw, even if there is a significant decline in the securities markets. Highest
Daily Lifetime Five Benefit differs from Lifetime Five and Spousal Lifetime Five in that (a) the Protected Withdrawal
Value is determined based on the highest daily contract value and (b) we require you to participate in an asset transfer
program, under which your contract value may be transferred periodically between the variable investment options and the
Benefit Fixed Rate Account (which is part of our general account). We operate the asset transfer program under a
formula, which is described in the portion of Section 5 concerning the Highest Daily Lifetime Five Benefit. In addition,
in Appendix C, we set out the formula itself. As discussed in Section 5, when you elect Highest Daily Lifetime Five, the
asset transfer formula is made a part of your annuity contract, and thus may not be altered thereafter. However, we do
reserve the right to amend the formula for newly-issued annuity contracts that elect Highest Daily Lifetime Five in the
future. As we discuss in more detail later in this prospectus, this required asset transfer program helps us manage our
financial exposure under Highest Daily Lifetime Five, by moving assets out of the variable investment options in the
event of securities market declines. In essence, we seek to preserve the value of these assets, by transferring them to
a more stable account. Of course, the formula also contemplates the transfer of assets from the Benefit Fixed Rate
Account to the variable investment options in certain other scenarios. "
o We add the following as the last line item in the bullet within the Section 8 portion of the Summary concerning insurance
and administrative costs:
"- 0.60% if you choose the Highest Daily Lifetime Five Benefit. This charge is in addition to the charge for the applicable
death benefit."
SUMMARY OF CONTRACT EXPENSES
o With respect to the Strategic Partners Annuity One 3 and Strategic Partners Plus 3 prospectuses of Pruco Life, in the
table entitled Periodic Account Expenses, Insurance and Administrative Expenses with the Indicated Benefits, we revise
the line items pertaining to the death benefit options, Lifetime Five, and Spousal Lifetime Five to read as follows, and
add a line item for Highest Daily Lifetime Five. In addition, we add a footnote (which appears immediately after
"Insurance And Administrative Expenses With The Indicated Benefits"):
Contract Contract
With Without
Credit Credit
Lifetime Five Income Benefit 0.60% 0.60%
Spousal Lifetime Five Income Benefit 0.75% 0.75%
Highest Daily Lifetime Five Income Benefit 0.60% 0.60%
Base Death Benefit 1.50% 1.40%
Guaranteed Minimum Death Benefit Option - Roll-Up or Step-Up
1.75% 1.65%
Guaranteed Minimum Death Benefit Option - Greater of Roll-Up
or Step-Up 1.85% 1.75%
Highest Daily Value Death Benefit 2.00% 1.90%
Maximum charge for each of Lifetime Five,
Spousal Lifetime Five, and Highest Daily Lifetime Five 2.00% 2.00%
*The charge for the Lifetime Five Income Benefit (and, if available under your contract, Spousal Lifetime Five and Highest Daily
Lifetime Five) is imposed based on the value of assets in the variable investment options only. As discussed later in this
prospectus, we reserve the right to increase these charges upon any step-up of the benefit. In certain state filings, we have
stated that we reserve the right to increase the charge for Lifetime Five, Spousal Lifetime Five, and Highest Daily Lifetime Five
to a maximum of 2 percent. However, we have no present intention of increasing the charges for those benefits to that maximum
level.
o With respect to the Strategic Partners FlexElite prospectus of Pruco Life (version of contract sold on or after May 1,
2003 or upon subsequent state approval), in the table entitled Periodic Account Expenses, Insurance and Administrative
Expenses with the Indicated Benefits, we revise the line items pertaining to the death benefit options, Lifetime Five,
and Spousal Lifetime Five to read as follows, and add a line item for Highest Daily Lifetime Five. In addition, we add a
footnote (which appears immediately after "Insurance And Administrative Expenses With The Indicated Benefits"):
Lifetime Five Income Benefit 0.60%
Spousal Lifetime Five Income Benefit 0.75%
Highest Daily Lifetime Five Income Benefit 0.60%
Base Death Benefit 1.65% (1.70% for contracts sold prior to May 1,
2003, or upon subsequent state approval, and if you are aged 76 or older)
Guaranteed Minimum Death Benefit Option - Roll-Up or
Step-Up 1.90%
Guaranteed Minimum Death Benefit Option - Greater of Roll-Up or
Step-Up 2.00%
Highest Daily Value Death Benefit 2.15%
Maximum charge for each of Lifetime Five,
Spousal Lifetime Five, and Highest Daily Lifetime Five 2.00%
*The charge for the Lifetime Five Income Benefit (and, if available under your contract, Spousal Lifetime Five and Highest Daily
Lifetime Five) is imposed based on the value of assets in the variable investment options only. As discussed later in this
prospectus, we reserve the right to increase these charges upon any step-up of the benefit. In certain state filings, we have
stated that we reserve the right to increase the charge for Lifetime Five, Spousal Lifetime Five, and Highest Daily Lifetime Five
to a maximum of 2 percent. However, we have no present intention of increasing the charges for those benefits to that maximum
level.
In Section 2 of each prospectus, we make the following change to the chart setting forth a brief description of each variable
investment option, to reflect a subadviser name change:
o SP Small Cap Value Portfolio, AST Small Cap Value Portfolio, and Prudential Series Fund Equity Portfolio. Salomon
Brothers Asset Management will change its name to ClearBridge Advisers LLC, effective in December 2006.
In section 2 of each prospectus, we revise the investment objectives/policies section, and portfolio adviser/sub-adviser section
for two Portfolios to read as follows. These new descriptions reflect the addition of sub-advisers as well as revisions to
non-fundamental investment policies:
o SP LSV International Value Portfolio:
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PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISER/
TYPE SUB-ADVISER
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International SP International Value Portfolio (formerly SP LSV International Value Portfolio): seeks LSV Asset Management,
capital growth. The Portfolio normally invests at least 80% of the Portfolio's investable Thornburg Investment
assets (net assets plus borrowings made for investment purposes) in the equity securities of Management, Inc.
Equity companies in developed countries outside the United States that are represented in the MSCI
EAFE Index.
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o SP William Blair International Growth Portfolio
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PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISER/
TYPE SUB-ADVISER
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International SP International Growth Portfolio (formerly, SP William Blair International Growth Marsico Capital
Portfolio): seeks long-term capital appreciation. The Portfolio invests primarily in Management LLC,
equity-related securities of foreign issuers. The Portfolio invests primarily in the common William Blair &
stock of large and medium-sized foreign companies, although it may also invest in companies of Company, LLC
all sizes. Under normal circumstances, the Portfolio invests at least 65% of its total assets
Equity in common stock of foreign companies operating or based in at least five different countries,
which may include countries with emerging markets. The Portfolio looks primarily for stocks of
companies whose earnings are growing at a faster rate than other companies or which offer
attractive growth potential.
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SECTION 5: WHAT IS THE LIFETIME FIVE INCOME BENEFIT?
We add the following new section to the end of the above-referenced section of each prospectus for Pruco Life's Strategic
Partners Annuity One 3, Strategic Partners Plus 3, and Strategic Partners FlexElite:
HIGHEST DAILY LIFETIME FIVE BENEFIT (HIGHEST DAILY LIFETIME FIVE)
The Highest Daily Lifetime Five Benefit described below is only being offered in those jurisdictions where we have received
regulatory approval, and will be offered subsequently in other jurisdictions when we receive regulatory approval in those
jurisdictions. Certain terms and conditions may differ among jurisdictions once approved. Highest Daily Lifetime Five is offered
as an alternative to Lifetime Five and Spousal Lifetime Five. Currently, if you elect Highest Daily Lifetime Five and subsequently
terminate the benefit, you will not be able to re-elect Highest Daily Lifetime Five, and will have a waiting period until you can
elect Spousal Lifetime Five or Lifetime Five. Specifically, you will be permitted to elect Lifetime Five or Spousal Lifetime Five
only on an anniversary of the contract date that is at least 90 calendar days from the date that Highest Daily Lifetime Five was
terminated. We reserve the right to further limit the election frequency in the future. The income benefit under Highest Daily
Lifetime Five currently is based on a single "designated life" who is at least 55 years old on the date that the benefit is
acquired. The Highest Daily Lifetime Five Benefit is not available if you elect any other optional living benefit, although you
may elect any optional death benefit (other than the Highest Daily Value Death Benefit). As long as your Highest Daily Lifetime
Five Benefit is in effect, you must allocate your contract value in accordance with the then-permitted and available investment
option(s) with this program.
We offer a benefit that guarantees until the death of the single designated life the ability to withdraw an annual amount (the
"Highest Daily Life Income Benefit") equal to a percentage of an initial principal value (the "Protected Withdrawal Value")
regardless of the impact of market performance on the contract value, subject to our program rules regarding the timing and amount
of withdrawals. The benefit may be appropriate if you intend to make periodic withdrawals from your contract, and wish to ensure
that market performance will not affect your ability to receive annual payments. You are not required to make withdrawals as part
of the program -- the guarantees are not lost if you withdraw less than the maximum allowable amount each year under the rules of
the benefit. We discuss Highest Daily Lifetime Five in greater detail immediately below. In addition, please see the Glossary
section of this prospectus for definitions of some of the key terms used with this benefit. As discussed below, we require that
you participate in our asset transfer program in order to participate in Highest Daily Lifetime Five, and in the Appendices to
this prospectus, we set forth the formula under which we make those asset transfers.
As discussed below, a key component of Highest Daily Lifetime Five is the Protected Withdrawal Value, which is an amount that is
distinct from contract value. Protected Withdrawal Value is used to determine the Highest Daily Annual Income Amount - - which is
amount that you can take out annually as a withdrawal for your entire life. Because each of the Protected Withdrawal Value and
Highest Daily Annual Income Amount is determined in a way that is not solely related to contract value, it is possible for the
contract value to fall to zero, even though the Highest Daily Annual Income Amount remains. You are guaranteed to be able to
withdraw the Highest Daily Annual Income Amount for the rest of your life, provided that you have not made "excess withdrawals."
Excess withdrawals, as discussed below, will reduce your Highest Daily Annual Income Amount. Thus, you could experience a
scenario in which your contract value was zero, and, due to your excess withdrawals, your Highest Daily Annual Income Amount also
was reduced to zero. In that scenario, no further amount would be payable under Highest Daily Lifetime Five.
KEY FEATURE -- PROTECTED WITHDRAWAL VALUE
The Protected Withdrawal Value is used to determine the amount of the annual payments under the Highest Daily Life Income Benefit.
The Protected Withdrawal Value initially is equal to the contract value on the date that you elect Highest Daily Lifetime Five.
On each business day thereafter, until the earlier of the first withdrawal or ten years after the date of your election of the
benefit, we recalculate the Protected Withdrawal Value. Specifically, on each such business day (the "Current Business Day"), the
Protected Withdrawal Value is equal to the greater of:
o The Protected Withdrawal Value for the immediately preceding business day (the "Prior Business Day"), appreciated at the
daily equivalent of 5% annually during the calendar day(s) between the Prior Business Day and the Current Business Day
(i.e., one day for successive business days, but more than one calendar day for business days that are separated by
weekends and/or holidays), plus the amount of any purchase payment (including any associated credit) made on the Current
Business Day; and
o The contract value.
We cease these daily calculations of the Protected Withdrawal Value when you make your first withdrawal. However, as discussed
below, subsequent purchase payments (and any associated credits for Strategic Partners Annuity One 3 and Strategic Partners Plus 3
only) will increase the amount we guarantee to pay annually under the Highest Daily Life Income Benefit (the "Highest Daily Annual
Income Amount"), while "excess" withdrawals (as described below) may decrease the Highest Daily Annual Income Amount.
KEY FEATURE - HIGHEST DAILY ANNUAL INCOME AMOUNT UNDER HIGHEST DAILY LIFETIME FIVE BENEFIT
The initial Highest Daily Annual Income Amount is equal to 5% of the Protected Withdrawal Value. Under the Highest Daily Lifetime
Five benefit, if your cumulative withdrawals in a contract year are less than or equal to the Highest Daily Annual Income Amount,
they will not reduce your Highest Daily Annual Income Amount in subsequent contract years, but any such withdrawals will reduce
the Highest Daily Annual Income Amount on a dollar-for-dollar basis in that contract year. If your cumulative withdrawals are in
excess of the Highest Daily Annual Income Amount ("Excess Income"), your Highest Daily Annual Income Amount in subsequent years
will be reduced (except with regard to required minimum distributions) by the result of the ratio of the Excess Income to the
contract value immediately prior to such withdrawal (see examples of this calculation below). Reductions include the actual amount
of the withdrawal, including any CDSC that may apply. A purchase payment that you make will increase the then-existing Highest
Daily Annual Income Amount by an amount equal to 5% of the purchase payment (including, with respect to Strategic Partners Annuity
One 3 and Strategic Partners Plus 3 only, the amount of any associated credits).
An automatic step-up feature ("Highest Quarterly Auto Step-Up") is included as part of this benefit. As detailed in this
paragraph, the Highest Quarterly Auto Step-Up feature can result in a larger Highest Daily Annual Income Amount if your contract
value increases subsequent to your first withdrawal. We begin examining contract values for purposes of this feature starting
with the contract anniversary immediately after your first withdrawal under the benefit. Specifically, upon the first such
contract anniversary after your first withdrawal, we identify the contract value on the business days corresponding to the end of
each quarter that (i) is based on your contract year, rather than a calendar year (ii) is subsequent to the first withdrawal and
(iii) falls within the immediately preceding contract year. If the end of any such quarter falls on a holiday or a weekend, we
use the next business day. We multiply each of those quarterly contract values by 5%, adjust each such quarterly value for
subsequent withdrawals and purchase payments, and then select the highest of those values. If the highest of those values exceeds
the existing Highest Daily Annual Income Amount, we replace the existing amount with the new, higher amount. Otherwise, we leave
the existing Highest Daily Annual Income Amount intact. In later years (i.e., after the first contract anniversary after the
first withdrawal), we determine whether an automatic step-up should occur on each contract anniversary, by performing a similar
examination of the contract values on the end of the four immediately preceding quarters. If, on the date that we implement a
Highest Quarterly Auto Step-Up to your Highest Daily Annual Income Amount, the charge for Highest Daily Lifetime Five has changed
for new purchasers, you may be subject to the new charge at the time of such step-up. Prior to increasing your charge for Highest
Daily Lifetime Five upon a step-up, we would notify you, and give you the opportunity to cancel the automatic step-up feature.
The Highest Daily Lifetime Five program does not affect your ability to make withdrawals under your contract, or limit your
ability to request withdrawals that exceed the Highest Daily Annual Income Amount. Under Highest Daily Lifetime Five, if your
cumulative withdrawals in a contract year are less than or equal to the Highest Daily Annual Income Amount, they will not reduce
your Highest Daily Annual Income Amount in subsequent contract years, but any such withdrawals will reduce the Highest Daily
Annual Income Amount on a dollar-for-dollar basis in that contract year.
If, cumulatively, you withdraw an amount less than the Highest Daily Annual Income Amount in any contract year, you cannot
carry-over the unused portion of the Highest Daily Annual Income Amount to subsequent contract years.
Examples of dollar-for-dollar and proportional reductions, and the Highest Quarterly Step-Up are set forth below. The values
depicted here are purely hypothetical, and do not reflect the charges for the Highest Daily Lifetime Five Benefit or any other
fees and charges. Please assume the following for all three examples:
o The contract is purchased on December 1, 2006
o On May 2, 2007, the client elects Highest Daily Lifetime Five and takes the first withdrawal under the benefit on the
same day.
Dollar-for-dollar reductions
On May 2, 2007, the Protected Withdrawal Value is $120,000, resulting in a Highest Daily Annual Income Amount of $6,000 (5% of
$120,000). Assuming $2,500 is withdrawn from the contract on this date, the remaining Highest Daily Annual Income Amount for that
contract year (up to and including December 1, 2007) is $3,500. This is the result of a dollar-for-dollar reduction of the
Highest Daily Annual Income Amount -- $6,000 less $2,500 = $3,500.
Proportional reductions
Continuing the previous example, assume an additional withdrawal of $5,000 occurs on August 6, 2007 and the contract value at the
time of this withdrawal is $110,000. The first $3,500 of this withdrawal reduces the Highest Daily Annual Income Amount for that
contract year to $0. The remaining withdrawal amount ($1,500) reduces the Highest Daily Annual Income Amount in future contract
years on a proportional basis based on the ratio of the excess withdrawal to the contract value immediately prior to the excess
withdrawal. (Note that if there were other withdrawals in that contract year, each withdrawal would result in another
proportional reduction to the Highest Daily Annual Income Amount).
Here is the calculation:
Contract value before withdrawal $110,000.00
Less amount of "non" excess withdrawal -$3,500.00
Contract value immediately before excess withdrawal of $1,500 $106,500.00
Excess withdrawal amount, $1,500.00
divided by contract value immediately before excess withdrawal $106,500.00
Ratio 1.41%
Highest Daily Annual Income Amount $6,000.00
Less ratio of 1.41% -$84.51
Highest Daily Annual Income Amount for future contract years $5,915.49
Highest Quarterly Step
On each contract anniversary date, the Highest Daily Annual Income Amount is stepped-up if 5% of the highest quarterly value since
your first withdrawal (or last contract anniversary in subsequent years), adjusted for excess withdrawals and additional purchase
payments, is greater than the Highest Daily Annual Income Amount, also adjusted for excess withdrawals and additional purchase
payments.
Continuing the same example as above, the Highest Daily Annual Income Amount for this contract year is $6,000. However, the
excess withdrawal on August 6th reduces this amount to $5,915.49 for future years (see above). For the next contract year, the
Highest Daily Annual Income Amount will be stepped-up if 5% of the highest quarterly contract value, adjusted for withdrawals, is
greater than $5,915.49. Here are the calculations for determining the quarterly values. Only the June 1 value is being adjusted
for excess withdrawals, as the September 1 and December 1 valuation dates occur after the excess withdrawal on August 6.
Highest Quarterly
Value (adjusted with Adjusted Annual Income
withdrawal and Amount (5% of the Highest
Date* Account value premium)** Quarterly Value)
June 1, 2007 $118,000.00 $118,000.00 $5,900.00
August 6, 2007 $120,000.00 $112,885.55 $5,644.28
September 1, 2007 $112,000.00 $112,885.55 $5,644.28
December 1, 2007 $119,000.00 $119,000.00 $5,950.00
*In this example, the contract anniversary date is December 1. The quarterly valuation dates are every three months thereafter -
March 1, June 1, September 1, and December 1. In this example, we do not use the March 1 date as the first withdrawal took place
after March 1. The contract anniversary date of December 1 is considered the fourth and final quarterly valuation date for the
year.
**In this example, the first quarterly value after the first withdrawal is $118,000 on June 1, yielding an adjusted Highest Daily
Annual Income Amount of $5,900.00. This amount is adjusted on August 6 to reflect the $5,000 withdrawal. The calculations for
the adjustments are:
|X| The contract value of $118,000 on June 1 is first reduced dollar-for-dollar by $3,500 ($3,500 is the remaining Highest
Daily Annual Income Amount for the contract year), resulting in an adjusted contract value of $114,500 before the excess
withdrawal.
|X| This amount ($114,500) is further reduced by 1.41% (this is the ratio in the above example which is the excess
withdrawal divided by the contract value immediately preceding the excess withdrawal) resulting in a Highest Quarterly
Value of $112,885.55.
The adjusted Highest Daily Annual Income Amount is carried forward to the next quarterly anniversary date of September 1. At this
time, we compare this amount to 5% of the contract value on September 1. Since the June 1 adjusted Highest Daily Annual Income
Amount of $5,644.28 is higher than $5,600.00 (5% of $112,000), we continue to carry $5,644.28 forward to the next and final
quarterly anniversary date of December 1. The contract value on December 1 is $119,000 and 5% of this amount is $5,950. Since
this is higher than $5,644.28, the adjusted Highest Daily Annual Income Amount is reset to $5,950.00
In this example, 5% of the December 1 value yields the highest amount of $ 5,950.00. Since this amount is higher than the current
year's Highest Daily Annual Income Amount of $5,915.49 adjusted for excess withdrawals, the Highest Daily Annual Income Amount for
the next contract year, starting on December 2, 2007 and continuing through December 1, 2008, will be stepped-up to $5,950.00.
BENEFITS UNDER HIGHEST DAILY LIFETIME FIVE
o To the extent that your contract value was reduced to zero as a result of cumulative withdrawals that are equal to or
less than the Highest Daily Annual Income Amount and amounts are still payable under the Highest Daily Life Income
Benefit, we will make an additional payment, if any, for that contract year equal to the remaining Highest Daily Annual
Income Amount for the contract year. Thus, in that scenario, the remaining Highest Daily Annual Income Amount would be
payable even though your contract value was reduced to zero. In subsequent contract years we make payments that equal
the Highest Daily Annual Income Amount as described in this section. We will make payments until the death of the single
designated life. To the extent that cumulative withdrawals in the current contract year that reduced your contract value
to zero are more than the Highest Daily Annual Income Amount, the Highest Daily Lifetime Five Benefit terminates, and no
additional payments will be made.
o If annuity payments are to begin under the terms of your contract, or if you decide to begin receiving annuity payments
and there is a Highest Daily Annual Income Amount due in subsequent contract years, you can elect one of the following
two options:
(1) Apply your contract value to any annuity option available; or
(2) Request that, as of the date annuity payments are to begin, we make annuity payments each year equal to the Highest
Daily Annual Income Amount. We will make payments until the death of the single designated life.
We must receive your request in a form acceptable to us at our office.
In the absence of an election when mandatory annuity payments are to begin, we will make annual annuity payments in the form of a
single life fixed annuity with ten payments certain, by applying the greater of the annuity rates then currently available or the
annuity rates guaranteed in your contract. The amount that will be applied to provide such annuity payments will be the greater of:
(1) The present value of the future Highest Daily Annual Income Amount payments. Such present value will be calculated using
the greater of the single life fixed annuity rates then currently available or the single life fixed annuity rates guaranteed
in your contract; and
(2) The contract value.
o If no withdrawal was ever taken, we will determine the Protected Withdrawal Value and calculate the Highest Daily Annual
Income Amount as if you made your first withdrawal on the date the annuity payments are to begin.
OTHER IMPORTANT CONSIDERATIONS
o Withdrawals under the Highest Daily Lifetime Five benefit are subject to all of the terms and conditions of the contract,
including any CDSC. We take withdrawals pro rata from your variable investment options and fixed investment options.
o Withdrawals made while the Highest Daily Lifetime Five program is in effect will be treated, for tax purposes, in the
same way as any other withdrawals under the contract. The Highest Daily Lifetime Five program does not directly affect
the contract value or surrender value, but any withdrawal will decrease the contract value by the amount of the
withdrawal (plus any applicable CDSC). If you surrender your contract, you will receive the current surrender value.
o You can make withdrawals from your contract while your contract value is greater than zero without purchasing the Highest
Daily Lifetime Five Benefit. The Highest Daily Lifetime Five Benefit provides a guarantee that if your contract value
declines due to market performance, you will be able to receive your Highest Daily Annual Income Amount in the form of
periodic benefit payments.
o You must allocate your contract value in accordance with the then available investment option(s) that we may permit in
order to elect and maintain the Highest Daily Lifetime Five Benefit.
ELECTION OF AND DESIGNATIONS UNDER THE BENEFIT
For Highest Daily Lifetime Five, there must be either a single owner who is the same as the annuitant, or if the contract is
entity-owned, there must be a single natural person annuitant. In either case, the annuitant must be at least 55 years old.
Any change of the annuitant under the contract will result in cancellation of Highest Daily Lifetime Five. Similarly, any change
of owner will result in cancellation of Highest Daily Lifetime Five, except if (a) the new owner has the same taxpayer
identification number as the previous owner, (b) both the new owner and previous owner are entities, or (c) the previous owner is
a natural person and the new owner is an entity.
Highest Daily Lifetime Five can be elected at the time that you purchase your contract. We also offer existing owners (i.e.,
those who have already acquired their contract) the option to elect Highest Daily Lifetime Five, subject to our eligibility rules
and restrictions.
Currently, if you terminate the Highest Daily Lifetime Five Benefit, you will (a) not be permitted to re-elect the benefit and (b)
will be allowed to elect the Spousal Lifetime Five Benefit or the Lifetime Five Income Benefit on any anniversary of the contract
date that is at least 90 calendar days from the date the Highest Daily Lifetime Five Benefit was terminated. We reserve the right
to further limit the election frequency in the future. Before making any such change to the election frequency, we will provide
prior notice to owners who have an effective Highest Daily Lifetime Five Benefit.
TERMINATION OF THE BENEFIT
You may terminate the benefit at any time by notifying us. If you terminate the benefit, any guarantee provided by the benefit
will terminate as of the date the termination is effective, and certain restrictions on re-election will apply as described above.
We reserve the right to further limit the frequency election in the future. The benefit terminates: (i) upon your termination of
the benefit, (ii) upon your surrender of the contract, (iii) upon your election to begin receiving annuity payments; (iv) upon the
death of the designated life, (v) if both the contract value and Highest Daily Annual Income Amount equal zero, or (vi) if you
fail to meet our requirements for issuing the benefit.
Upon termination of Highest Daily Lifetime Five, we cease deducting the charge for the benefit. With regard to your investment
allocations, upon termination we will: (i) leave intact amounts that are held in the variable investment options, and (ii)
transfer all amounts held in the Benefit Fixed Rate Account (as described below) to your variable investment options, based on
your existing allocation instructions or (in the absence of such existing instructions) pro rata (i.e. in the same proportion as
the current balances in your variable investment options).
ASSET TRANSFER COMPONENT OF HIGHEST DAILY LIFETIME FIVE
As indicated above, we limit the sub-accounts to which you may allocate contract value if you elect Highest Daily Value Lifetime
Five. For purposes of this benefit, we refer to those permitted sub-accounts as the "Permitted Sub-accounts". A list of the
Permitted Sub-accounts appears in the application form that you must submit to us in order to elect this benefit. As a requirement
of participating in Highest Daily Lifetime Five, we require that you participate in our specialized asset transfer program, under
which we may transfer contract value between the Permitted Sub-accounts and a fixed interest rate account that is part of our
general account (the "Benefit Fixed Rate Account"). The Benefit Fixed Rate Account is available only with this benefit, and thus
you may not allocate purchase payments to that Account.
Under the asset transfer component of Highest Daily Lifetime Five, we monitor your contract value daily and, if necessary,
systematically transfer amounts between the Permitted Sub-accounts you have chosen and the Benefit Fixed Rate Account. Any
transfer would be made in accordance with a formula, which is set forth in the schedule supplement to the endorsement for this
benefit (and also appears in the Appendices to this prospectus). Speaking generally, the formula, which we apply each business
day, operates as follows. The formula starts by identifying your Protected Withdrawal Value for that day and then multiplies
that figure by 5%, to produce a projected (i.e., hypothetical) Highest Daily Annual Income Amount. Then, using our actuarial
tables, we produce an estimate of the total amount of our obligation, based on the projected Highest Daily Annual Income Amount
each year for the rest of your life. In the formula, we refer to that value as the "Target Value" or "L". If you have already
made a withdrawal, your projected Highest Daily Annual Income Amount (and thus your Target Value) would take into account any
automatic step-up implemented according to the step-up formula described above. Next, the formula subtracts from the Target
Value the amount held within the Benefit Fixed Rate Account on that day, and divides that difference by the amount held within
the Permitted Sub-accounts. That ratio, which essentially isolates the amount of your Target Value that is not offset by amounts
held within the Benefit Fixed Rate Account, is called the "Target Ratio" or "r". If the Target Ratio exceeds a certain
percentage, it means essentially that too much Target Value is not offset by assets within the Benefit Fixed Rate Account, and
therefore we will transfer an amount from your Permitted Sub-accounts to the Benefit Fixed Rate Account. Conversely, if the
Target Ratio falls below a certain percentage, then a transfer from the Benefit Fixed Rate Account to the Permitted Sub-accounts
would occur.
As you can glean from the formula, a downturn in the securities markets (i.e., a reduction in the amount held within the
Permitted Sub-accounts) may cause us to transfer some of your variable contract value to the Benefit Fixed Rate Account, because
such a reduction will tend to increase the Target Ratio. Moreover, certain market return scenarios involving "flat" returns over
a period of time also could result in the transfer of money to the Benefit Fixed Rate Account. In deciding how much to transfer,
we use another formula, which essentially seeks to re-balance amounts held in the Permitted Sub-accounts and the Benefit Fixed
Rate Account so that the Target Ratio meets a target ratio, which currently is equal to 80%. Once you elect Highest Daily
Lifetime Five, the ratios we use will be fixed. For contracts issued in the future that elect Highest Daily Lifetime Five,
however, we reserve the right to change the ratios.
While you are not notified when your contract reaches a reallocation trigger, you will receive a confirmation statement indicating
the transfer of a portion of your contract value either to or from the Benefit Fixed Rate Account. The formula by which the
reallocation triggers operate is designed primarily to mitigate the financial risks that we incur in providing the guarantee under
Highest Daily Lifetime Five.
Depending on the results of the calculation relative to the reallocation triggers, we may:
o Not make any transfer; or
o If a portion of your contract value was previously allocated to the Benefit Fixed Rate Account, transfer all or a portion
of those amounts to the Permitted Sub-accounts, based on your existing allocation instructions (e.g., asset allocation)
or (in the absence of such existing instructions) pro rata. Amounts taken out of the Benefit Fixed Rate Account will be
withdrawn for this purpose on a last-in, first-out basis (an amount renewed into a new guarantee period under the Benefit
Fixed Rate Account will be deemed a new investment for purposes of this last-in, first-out rule); or
o Transfer all or a portion of your contract value in the Permitted Sub-accounts pro-rata to the Benefit Fixed Rate
Account. The interest that you earn on such transferred amount will be equal to the annual rate that we have set for
that day, and we will credit the daily equivalent of that annual interest until the earlier of one year from the date of
the transfer or the date that such amount in the Benefit Fixed Rate Account is transferred back to the Permitted
Sub-accounts.
If a significant amount of your contract value is systematically transferred to the Benefit Fixed Rate Account during periods of
market declines or low interest rates, less of your contract value may be available to participate in the investment experience of
the Permitted Sub-accounts if there is a subsequent market recovery. Under the reallocation formula that we employ, it is
possible that a significant portion of your contract value may be allocated to the Benefit Fixed Rate Account.
ADDITIONAL TAX CONSIDERATIONS FOR QUALIFIED CONTRACTS/ARRANGEMENTS
If you purchase a contract as an investment vehicle for "qualified" investments, including an IRA, SEP-IRA, Tax Sheltered Annuity
(or 403(b)) or employer plan under Code Section 401(a), the minimum distribution rules under the Code require that you begin
receiving periodic amounts from your contract beginning after age 70 1/2. For a Tax Sheltered Annuity or a 401(a) plan for which
the participant is not a greater than 5 percent owner of the employer, this required beginning date can generally be deferred to
retirement, if later. Roth IRAs are not subject to these rules during the owner's lifetime. The amount required under the Code
may exceed the Highest Daily Annual Income Amount, which will cause us to increase the Highest Daily Annual Income Amount in any
contract year that required minimum distributions due from your contract are greater than such amounts. In addition, the amount
and duration of payments under the annuity payment and death benefit provisions may be adjusted so that the payments do not
trigger any penalty or excise taxes due to tax considerations such as minimum distribution requirements.
SECTION 8 (subsection entitled "Insurance and Administrative Charges")
We replace the first two sentences of the first paragraph concerning the charges for Lifetime Five and Spousal Lifetime Five with
the following: "We impose an additional charge of 0.60% annually if you choose the Lifetime Five Income Benefit or the Highest
Daily Lifetime Five Benefit, and an additional charge of 0.75% annually if you choose the Spousal Lifetime Five Income Benefit."
APPENDIX B: Selecting The Variable Annuity That's Right For You
In the product comparison chart, we revise the line item (and accompanying footnote) concerning Living Benefits to reflect that
Highest Daily Lifetime Five is available under Strategic Partners FlexElite 2, Strategic Partners Annuity One 3 and Strategic
Partners Plus 3.
We add the following as Appendix C:
Appendix C
Asset Transfer Formula Under Highest Daily Lifetime Five Benefit
We set out below the current formula under which we may transfer amounts between the variable investment options and the Benefit
Fixed Rate Account. As discussed in Section 5, we reserve the right to modify this formula with respect to those who elect
Highest Daily Lifetime Five in the future. However, upon your election of Highest Daily Lifetime Five, we will not alter the
asset transfer formula that applies to your contract.
Terms and Definitions referenced in the calculation formula:
o Cu - the upper target is established on the effective date of the Highest Daily Lifetime Five benefit (the "Effective
Date") and is not changed for the life of the guarantee. Currently, it is 83%.
o Ct - the target is established on the Effective Date and is not changed for the life of the guarantee. Currently, it is
80%.
o Cl - the lower target is established on the Effective Date and is not changed for the life of the guarantee. Currently,
it is 77%.
o L - the target value as of the current business day.
o r - the target ratio.
o a - the factors used in calculating the target value. These factors are established on the Effective Date and are not
changed for the life of the guarantee. The factors that we use currently are derived from the a2000 Individual Annuity
Mortality Table with an assumed interest rate of 3%. Each number in the table "a" factors (which appears below) represents
a factor, which when multiplied by the Highest Daily Annual Income Amount, projects our total liability for the purpose of
asset transfers under the guarantee.
o Q - age based factors used in calculating the target value. These factors are established on the Effective Date and are
not changed for the life of the guarantee The factor is currently set equal to 1.
o V - the total value of all Permitted Sub-accounts in the annuity.
o F - the total value of all Benefit Fixed Rate Account allocations.
o I - the Income Value prior to the first withdrawal. The Income Value is equal to what the Highest Daily Annual Income
Amount would be if the first withdrawal were taken on the date of calculation. After the first withdrawal the Income Value
equals the greater of the Highest Daily Annual Income Amount, the quarterly step-up amount times the Annual Income
Percentage, and the contract value times the Annual Income Percentage.
o T - the amount of a transfer into or out of the Benefit Fixed Rate Account.
o I% - Annual Income Amount percentage. This factor is established on the Effective Date and is not changed for the life
of the guarantee. Currently, this percentage is equal to 5%.
Target Value Calculation:
On each business day, a target value (L) is calculated, according to the following formula. If the variable contract value (V)
is equal to zero, no calculation is necessary.
L = I * Q * a
Transfer Calculation:
The following formula, which is set on the Effective Date and is not changed for the life of the guarantee, determines when a
transfer is required:
Target Ratio r = (L - F) / V.
o If r > Cu, assets in the Permitted Sub-accounts are transferred to Benefit Fixed Rate Account.
o If r < Cl, and there are currently assets in the Benefit Fixed Rate Account (F > 0), assets in the Benefit Fixed Rate
Account are transferred to the Permitted Sub-accounts.
The following formula, which is set on the Effective Date and is not changed for the life of the guarantee, determines the
transfer amount:
T ={Min(V, [L - F - V * Ct] / (1-Ct))} T>0, Money moving from the Permitted Sub-accounts to the Benefit
Fixed Rate Account
T ={Min(F, [L - F - V * Ct] / (1-Ct))} T<0, Money moving from the Benefit Fixed Rate Account to the
Permitted Sub-accounts]
Example:
Male age 65 contributes $100,000 into the Permitted Sub accounts and the value drops to $92,300 during year one, end of day one.
A table of values for "a" appears below.
Target Value Calculation:
L = I * Q * a
= 5000.67 * 1 * 15.34
= 76,710.28
Target Ratio:
r = (L - F) / V
= (76,710.28 - 0) / 92,300.00
= 83.11%
Since r > Cu ( because 83.11% > 83%) a transfer into the Benefit Fixed rate Account occurs.
T = { Min ( V, [ L - F - V * Ct] / ( 1 - Ct))}
= { Min ( 92,300.00, [ 76,710.28 - 0 - 92,300.00 * 0.80] / ( 1 - 0.80))}
= { Min ( 92,300.00, 14,351.40 )}
= 14,351.40
Age 65 "a" Factors for Liability Calculations
(in Years and Months since Benefit Effective Date)*
Months
Years 1 2 3 4 5 6 7 8 9 10 11 12
1 15.34 15.31 15.27 15.23 15.20 15.16 15.13 15.09 15.05 15.02 14.98 14.95
2 14.91 14.87 14.84 14.80 14.76 14.73 14.69 14.66 14.62 14.58 14.55 14.51
3 14.47 14.44 14.40 14.36 14.33 14.29 14.26 14.22 14.18 14.15 14.11 14.07
4 14.04 14.00 13.96 13.93 13.89 13.85 13.82 13.78 13.74 13.71 13.67 13.63
5 13.60 13.56 13.52 13.48 13.45 13.41 13.37 13.34 13.30 13.26 13.23 13.19
6 13.15 13.12 13.08 13.04 13.00 12.97 12.93 12.89 12.86 12.82 12.78 12.75
7 12.71 12.67 12.63 12.60 12.56 12.52 12.49 12.45 12.41 12.38 12.34 12.30
8 12.26 12.23 12.19 12.15 12.12 12.08 12.04 12.01 11.97 11.93 11.90 11.86
9 11.82 11.78 11.75 11.71 11.67 11.64 11.60 11.56 11.53 11.49 11.45 11.42
10 11.38 11.34 11.31 11.27 11.23 11.20 11.16 11.12 11.09 11.05 11.01 10.98
11 10.94 10.90 10.87 10.83 10.79 10.76 10.72 10.69 10.65 10.61 10.58 10.54
12 10.50 10.47 10.43 10.40 10.36 10.32 10.29 10.25 10.21 10.18 10.14 10.11
13 10.07 10.04 10.00 9.96 9.93 9.89 9.86 9.82 9.79 9.75 9.71 9.68
14 9.64 9.61 9.57 9.54 9.50 9.47 9.43 9.40 9.36 9.33 9.29 9.26
15 9.22 9.19 9.15 9.12 9.08 9.05 9.02 8.98 8.95 8.91 8.88 8.84
16 8.81 8.77 8.74 8.71 8.67 8.64 8.60 8.57 8.54 8.50 8.47 8.44
17 8.40 8.37 8.34 8.30 8.27 8.24 8.20 8.17 8.14 8.10 8.07 8.04
18 8.00 7.97 7.94 7.91 7.88 7.84 7.81 7.78 7.75 7.71 7.68 7.65
19 7.62 7.59 7.55 7.52 7.49 7.46 7.43 7.40 7.37 7.33 7.30 7.27
20 7.24 7.21 7.18 7.15 7.12 7.09 7.06 7.03 7.00 6.97 6.94 6.91
21 6.88 6.85 6.82 6.79 6.76 6.73 6.70 6.67 6.64 6.61 6.58 6.55
22 6.52 6.50 6.47 6.44 6.41 6.38 6.36 6.33 6.30 6.27 6.24 6.22
23 6.19 6.16 6.13 6.11 6.08 6.05 6.03 6.00 5.97 5.94 5.92 5.89
24 5.86 5.84 5.81 5.79 5.76 5.74 5.71 5.69 5.66 5.63 5.61 5.58
25 5.56 5.53 5.51 5.48 5.46 5.44 5.41 5.39 5.36 5.34 5.32 5.29
26 5.27 5.24 5.22 5.20 5.18 5.15 5.13 5.11 5.08 5.06 5.04 5.01
27 4.99 4.97 4.95 4.93 4.91 4.88 4.86 4.84 4.82 4.80 4.78 4.75
28 4.73 4.71 4.69 4.67 4.65 4.63 4.61 4.59 4.57 4.55 4.53 4.51
29 4.49 4.47 4.45 4.43 4.41 4.39 4.37 4.35 4.33 4.32 4.30 4.28
30 4.26 4.24 4.22 4.20 4.18 4.17 4.15 4.13 4.11 4.09 4.07 4.06
31 4.04 4.02 4.00 3.98 3.97 3.95 3.93 3.91 3.90 3.88 3.86 3.84
32 3.83 3.81 3.79 3.78 3.76 3.74 3.72 3.71 3.69 3.67 3.66 3.64
33 3.62 3.61 3.59 3.57 3.55 3.54 3.52 3.50 3.49 3.47 3.45 3.44
34 3.42 3.40 3.39 3.37 3.35 3.34 3.32 3.30 3.29 3.27 3.25 3.24
35 3.22 3.20 3.18 3.17 3.15 3.13 3.12 3.10 3.08 3.07 3.05 3.03
36 3.02 3.00 2.98 2.96 2.95 2.93 2.91 2.90 2.88 2.86 2.85 2.83
37 2.81 2.79 2.78 2.76 2.74 2.73 2.71 2.69 2.68 2.66 2.64 2.62
38 2.61 2.59 2.57 2.56 2.54 2.52 2.51 2.49 2.47 2.45 2.44 2.42
39 2.40 2.39 2.37 2.35 2.34 2.32 2.30 2.29 2.27 2.25 2.24 2.22
40 2.20 2.19 2.17 2.15 2.14 2.12 2.11 2.09 2.07 2.06 2.04 2.02
41 2.01 1.84 1.67 1.51 1.34 1.17 1.00 0.84 0.67 0.50 0.33 0.17
* The values set forth in this table are applied to all ages.
This prospectus supplement is intended to amend the prospectus for the annuity you own, and is not intended to be a
prospectus or offer for any annuity listed here that you do not own.
Pruco Life Insurance Company
Strategic Partners Annuity One
Strategic Partners Plus
Strategic Partners Advisor
Strategic Partners FlexElite
Strategic Partners Select
Supplement, dated November 20, 2006
To
Prospectuses, dated May 1, 2006
For each of the above-referenced prospectuses, this supplement reflects certain changes to the underlying mutual funds.
In Section 2 of each prospectus, we make the following change to the chart setting forth a brief description of each variable
investment option, to reflect a subadviser name change:
o SP Small Cap Value Portfolio, AST Small Cap Value Portfolio, and Prudential Series Fund Equity Portfolio. Salomon
Brothers Asset Management will change its name to ClearBridge Advisers LLC, effective in December 2006.
In section 2 of each prospectus, we revise the investment objectives/policies section, and portfolio adviser/sub-adviser section
for two Portfolios to read as follows. These new descriptions reflect the addition of sub-advisers as well as revisions to
non-fundamental investment policies:
o SP LSV International Value Portfolio:
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISER/
TYPE SUB-ADVISER
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International SP International Value Portfolio (formerly SP LSV International Value Portfolio): seeks LSV Asset Management,
capital growth. The Portfolio normally invests at least 80% of the Portfolio's investable Thornburg Investment
assets (net assets plus borrowings made for investment purposes) in the equity securities of Management, Inc.
Equity companies in developed countries outside the United States that are represented in the MSCI
EAFE Index.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
o
SP William Blair International Growth Portfolio
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISER/
TYPE SUB-ADVISER
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International SP International Growth Portfolio (formerly, SP William Blair International Growth Marsico Capital
Portfolio): seeks long-term capital appreciation. The Portfolio invests primarily in Management LLC,
equity-related securities of foreign issuers. The Portfolio invests primarily in the common William Blair &
stock of large and medium-sized foreign companies, although it may also invest in companies of Company, LLC
all sizes. Under normal circumstances, the Portfolio invests at least 65% of its total assets
Equity in common stock of foreign companies operating or based in at least five different countries,
which may include countries with emerging markets. The Portfolio looks primarily for stocks of
companies whose earnings are growing at a faster rate than other companies or which offer
attractive growth potential.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
This prospectus supplement is intended to amend the prospectus for the annuity you own, and is not intended to be a
prospectus or offer for any annuity listed here that you do not own.
Supplement to Prospectus Dated May 1, 2006
Supplement dated November 20, 2006
Supplement dated November 20, 2006 to the May 1, 2006 Prospectus for Pruco Life Insurance Company's Prudential Premier Series
Annuity
This Supplement should be read and retained with the current Prospectus for your annuity. If you would like another copy of the
current Prospectus, please contact us at 1-888-PRU-2888.
We are issuing this supplement to describe in the prospectus for the Prudential Premier Series Annuity of Pruco Life Insurance
Company ("Pruco Life") a new living benefit called Highest Daily Lifetime Five. We also reflect certain changes with respect to
the underlying mutual funds. These changes will be effective on or about November 20, 2006, unless specifically stated otherwise.
1. CHANGE WITH RESPECT TO CERTAIN PORTFOLIOS OF AMERICAN SKANDIA TRUST
In the Investment Options section of the prospectus, we make the following changes to the chart setting forth a brief description
of each variable investment option, to reflect the following subadviser name change with respect to one of the variable investment
options:
o AST Small Cap Value Portfolio. Salomon Brothers Asset Management will change its name to ClearBridge Advisers LLC,
effective in December 2006.
In the Investment Options section of the prospectus, we revise the investment objectives/policies section, and portfolio
advisor/sub-advisor section for two Portfolios to read as follows. These new descriptions reflect the addition of sub-advisors as
well as revisions to non-fundamental investment policies:
AST LSV International Value Portfolio.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International AST International Value Portfolio (formerly AST LSV International Value Portfolio): seeks LSV Asset Management,
capital growth. The Portfolio normally invests at least 80% of the Portfolio's investable Thornburg Investment
assets (net assets plus borrowings made for investment purposes) in the equity securities of Management, Inc.
Equity companies in developed countries outside the United States that are represented in the MSCI
EAFE Index.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
AST William Blair International Growth Portfolio.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International AST International Growth Portfolio (formerly,AST William Blair International Growth Marsico Capital
Portfolio): seeks long-term capital appreciation. The Portfolio invests primarily in Management LLC,
equity-related securities of foreign issuers. The Portfolio invests primarily in the common William Blair &
stock of large and medium-sized foreign companies, although it may also invest in companies of Company, LLC
all sizes. Under normal circumstances, the Portfolio invests at least 65% of its total assets
Equity in common stock of foreign companies operating or based in at least five different countries,
which may include countries with emerging markets. The Portfolio looks primarily for stocks of
companies whose earnings are growing at a faster rate than other companies or which offer
attractive growth potential.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
2. NEW INSURANCE FEATURE
We are adding the Highest Daily Lifetime FiveSM Income Benefit ("Highest Daily Lifetime Five"), that guarantees until the
death of a single designated life the ability to withdraw an annual amount equal to a percentage of an initial principal value
regardless of the impact of market performance on the Account Value. As a result, the following revisions are made to the
Prospectus:
A. We revise the Table of Contents as follows:
o As a new entry within the line item entitled "Living Benefit Programs", immediately after the line item for Spousal
Lifetime Five, we add a line item entitled "Highest Daily Lifetime Five Income Benefit (Highest Daily Lifetime
Five)".
o As a new entry at the end of the Table of Contents, we add a reference to Appendix C, entitled "Asset Transfer Formula
Under Highest Daily Lifetime Five Benefit."
B. We revise the Glossary of Terms section as follows:
o We add a definition for "Benefit Fixed Rate Account", that reads as follows: "An investment option offered as part of
this Annuity that is used only if you have elected the optional Highest Daily Lifetime Five Benefit. Amounts allocated
to the Benefit Fixed Rate Account earn a fixed rate of interest, and are held within our general account. You may not
allocate purchase payments to the Benefit Fixed Rate Account. Rather, Account Value is transferred to the Benefit Fixed
Rate Account only under the asset transfer feature of the Highest Daily Lifetime Five Benefit."
o We add a definition for "Highest Daily Lifetime Five Benefit" that reads as follows: "An optional feature available for
an additional charge that guarantees your ability to withdraw amounts equal to a percentage of a principal value called
the Protected Withdrawal Value. Subject to our rules regarding the timing and amount of withdrawals, we guarantee these
withdrawal amounts, regardless of the impact of market performance on your Account Value."
C. The following information has been added to "YOUR OPTIONAL BENEFIT FEES AND CHARGES" table in the "Summary of Contract
Fees and Charges" section of the Prospectus:
--------------------------------------------------- -------------- -------------- -------------- -------------- --------------
OPTIONAL TOTAL ANNUAL TOTAL ANNUAL TOTAL ANNUAL Maximum
BENEFIT FEE/ CHARGE CHARGE CHARGE charge for
CHARGE for for for each of
B Series* L Series* X Series* Lifetime
Five,
Spousal
Lifetime
Five, and
Highest
Daily
Lifetime Five
--------------------------------------------------- -------------- -------------- -------------- -------------- --------------
------------------------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME FIVE INCOME BENEFIT
------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------- -------------- -------------- -------------- -------------- --------------
0.60% of 1.75% 2.10% 2.15% 2.00%
average
daily net
assets of
the
Sub-accounts
--------------------------------------------------- -------------- -------------- -------------- -------------- --------------
* The Total Annual Charge includes the Insurance Charge assessed against the average daily net assets allocated to the
Sub-accounts. If you elect more than one optional benefit, the Total Annual Charge would be increased to include the charge
for each optional benefit. In certain state filings, we have stated that we reserve the right to increase the charge for
Lifetime Five, Spousal Lifetime Five, and Highest Daily Lifetime Five to a maximum of 2 percent. However, we have no present
intention of increasing the charges for those benefits to that maximum level.
D. The Highest Daily Lifetime Five program is not available if you elect any other optional living benefit, therefore all
references in the Prospectus that reflect the availability of the optional living benefits are revised accordingly.
E. The following description of the new optional living benefit is added as the last section under "Living Benefit Programs"
in the Prospectus:
HIGHEST DAILY LIFETIME FIVE INCOME BENEFIT
(HIGHEST DAILY LIFETIME FIVE)
- ------------------------------------------------------------------------------------------------------------------------------------
The Highest Daily Lifetime Five program described below is only being offered in those jurisdictions where we have received
regulatory approval and will be offered subsequently in other jurisdictions when we receive regulatory approval in those
jurisdictions. Certain terms and conditions may differ between jurisdictions once approved. Highest Daily Lifetime Five is
offered as an alternative to Lifetime Five and Spousal Lifetime Five. Currently, if you elect Highest Daily Lifetime Five and
subsequently terminate the benefit, you will not be able to re-elect Highest Daily Lifetime Five, and will have a waiting period
until you can elect Spousal Lifetime Five or Lifetime Five. Specifically, you will be permitted to elect Lifetime Five or Spousal
Lifetime Five only on an anniversary of the Issue Date that is at least 90 calendar days from the date that Highest Daily Lifetime
Five was terminated. We reserve the right to further limit the election frequency in the future. The income benefit under
Highest Daily Lifetime Five currently is based on a single "designated life" who is at least 55 years old on the date that the
benefit is acquired. The Highest Daily Lifetime Five Benefit is not available if you elect any other optional living benefit,
although you may elect an optional death benefit (other than the Highest Daily Value Death Benefit). As long as your Highest
Daily Lifetime Five Benefit is in effect, you must allocate your Account Value in accordance with the then-permitted and available
investment option(s) with this program. If you elect Highest Daily Lifetime Five, you must participate in our asset transfer
program, which is governed by a formula that is set forth in Appendix C.
- ------------------------------------------------------------------------------------------------------------------------------------
We offer a benefit that guarantees until the death of the single designated life the ability to withdraw an annual amount (the
"Highest Daily Life Income Benefit") equal to a percentage of an initial principal value (the "Protected Withdrawal Value")
regardless of the impact of market performance on the Account Value, subject to our program rules regarding the timing and amount
of withdrawals. The benefit may be appropriate if you intend to make periodic withdrawals from your Annuity, and wish to ensure
that market performance will not affect your ability to receive annual payments. You are not required to make withdrawals as part
of the program -- the guarantees are not lost if you withdraw less than the maximum allowable amount each year under the rules of
the benefit. We discuss Highest Daily Lifetime Five in greater detail immediately below. In addition, please see the Glossary
section of this prospectus for definitions of some of the key terms used with this benefit. As discussed below, we require that
you participate in our asset transfer program in order to participate in Highest Daily Lifetime Five, and in the Appendices to
this prospectus, we set forth the formula under which we make those asset transfers.
As discussed below, a key component of Highest Daily Lifetime Five is the Protected Withdrawal Value, which is an amount that is
distinct from Account Value. Protected Withdrawal Value is used to determine the Highest Daily Annual Income Amount - - which is
amount that you can take out annually as a withdrawal for your entire life. Because each of the Protected Withdrawal Value and
Highest Daily Annual Income Amount is determined in a way that is not solely related to Account Value, it is possible for the
Account Value to fall to zero, even though the Highest Daily Annual Income Amount remains. You are guaranteed to be able to
withdraw the Highest Daily Annual Income Amount for the rest of your life, provided that you have not made "excess withdrawals."
Excess withdrawals, as discussed below, will reduce your Highest Daily Annual Income Amount. Thus, you could experience a
scenario in which your Account Value was zero, and, due to your excess withdrawals, your Highest Daily Annual Income Amount also
was reduced to zero. In that scenario, no further amount would be payable under Highest Daily Lifetime Five.
KEY FEATURE-- Protected Withdrawal Value
The Protected Withdrawal Value is used to determine the amount of the annual payments under the Highest Daily Life Income Benefit.
The Protected Withdrawal Value initially is equal to the Account Value on the date that you elect Highest Daily Lifetime Five. On
each business day thereafter, until the earlier of the first withdrawal or ten years after the date of your election of the
benefit, we recalculate the Protected Withdrawal Value. Specifically, on each such business day (the "Current Valuation Day"),
the Protected Withdrawal Value is equal to the greater of:
o the Protected Withdrawal Value for the immediately preceding business day (the "Prior Valuation Day"), appreciated at
the daily equivalent of 5% annually during the calendar day(s) between the Prior Valuation Day and the Current
Valuation Day (i.e., one day for successive business days, but more than one calendar day for business days that
are separated by weekends and/or holidays), plus the amount of any Purchase Payment (including any associated
credit with respect to the X Series) made on the Current Valuation Day; and
o the Account Value.
We cease these daily calculations of the Protected Withdrawal Value when you make your first withdrawal. However, as discussed
below, subsequent Purchase Payments (and any associated credits for the X Series only) will increase the amount we guarantee to
pay annually under the Highest Daily Life Income Benefit (the "Highest Daily Annual Income Amount"), while "excess" withdrawals
(as described below) may decrease the Highest Daily Annual Income Amount.
KEY FEATURE-- Highest Daily Annual Income Amount under the Highest Daily Lifetime Five Benefit
The initial Highest Daily Annual Income Amount is equal to 5% of the Protected Withdrawal Value. Under the Highest Daily Lifetime
Five benefit, if your cumulative withdrawals in an Annuity Year are less than or equal to the Highest Daily Annual Income Amount,
they will not reduce your Highest Daily Annual Income Amount in subsequent Annuity Years, but any such withdrawals will reduce the
Highest Daily Annual Income Amount on a dollar-for-dollar basis in that Annuity Year. If your cumulative withdrawals are in
excess of the Highest Daily Annual Income Amount ("Excess Income"), your Highest Daily Annual Income Amount in subsequent years
will be reduced (except with regard to required minimum distributions) by the result of the ratio of the Excess Income to the
Account Value immediately prior to such withdrawal (see examples of this calculation below). Reductions include the actual amount
of the withdrawal, including any CDSC that may apply. A Purchase Payment that you make will increase the then-existing Highest
Daily Annual Income Amount by an amount equal to 5% of the Purchase Payment (including, with respect to the X Series, the amount
of any associated Credits).
An automatic step-up feature ("Highest Quarterly Auto Step-Up") is included as part of this benefit. As detailed in this
paragraph, the Highest Quarterly Auto Step-Up feature can result in a larger Highest Daily Annual Income Amount if your Account
Value increases subsequent to your first withdrawal. We begin examining the Account Value for purposes of this feature starting
with the anniversary of the Issue Date of the Annuity (the "Annuity Anniversary") immediately after your first withdrawal under
the benefit. Specifically, upon the first such Annuity Anniversary after your first withdrawal, we identify the Account Value on
the business days corresponding to the end of each quarter that (i) is based on your Annuity Year, rather than a calendar year;
(ii) is subsequent to the first withdrawal; and (iii) falls within the immediately preceding Annuity Year. If the end of any
such quarter falls on a holiday or a weekend, we use the next business day. We multiply each of those quarterly Account Values by
5%, adjust each such quarterly value for subsequent withdrawals and purchase payments, and then select the highest of those
values. If the highest of those values exceeds the existing Highest Daily Annual Income Amount, we replace the existing amount
with the new, higher amount. Otherwise, we leave the existing Highest Daily Annual Income Amount intact. In later years (i.e.,
after the first Annuity anniversary after the first withdrawal), we determine whether an automatic step-up should occur on each
Annuity Anniversary, by performing a similar examination of the Account Values on the end of the four immediately preceding
quarters. If, on the date that we implement a Highest Quarterly Auto Step-Up to your Highest Daily Annual Income Amount, the
charge for Highest Daily Lifetime Five has changed for new purchasers, you may be subject to the new charge at the time of such
step-up. Prior to increasing your charge for Highest Daily Lifetime Five upon a step-up, we would notify you, and give you the
opportunity to cancel the automatic step-up feature.
The Highest Daily Lifetime Five program does not affect your ability to make withdrawals under your annuity, or limit your ability
to request withdrawals that exceed the Highest Daily Annual Income Amount. Under Highest Daily Lifetime Five, if your cumulative
withdrawals in an Annuity Year are less than or equal to the Highest Daily Annual Income Amount, they will not reduce your Highest
Daily Annual Income Amount in subsequent Annuity Years, but any such withdrawals will reduce the Highest Daily Annual Income
Amount on a dollar-for-dollar basis in that Annuity Year.
If, cumulatively, you withdraw an amount less than the Highest Daily Annual Income Amount in any Annuity Year, you cannot
carry-over the unused portion of the Highest Daily Annual Income Amount to subsequent Annuity Years.
Examples of dollar-for-dollar and proportional reductions, and the Highest Quarterly Step-Up are set forth below. The values
depicted here are purely hypothetical, and do not reflect the charges for the Highest Daily Lifetime Five benefit or any other
fees and charges. Assume the following for all three examples:
|X| The Issue Date is December 1, 2006
|X| On May 2, 2007, the client elects Highest Daily Lifetime Five and takes the first withdrawal under the benefit on the
same day.
Dollar-for-dollar reductions
On May 2, 2007, the Protected Withdrawal Value is $120,000, resulting in a Highest Daily Annual Income Amount of $6,000 (5% of
$120,000). Assuming $2,500 is withdrawn from the Annuity on this date, the remaining Highest Daily Annual Income Amount for that
Annuity Year (up to and including December 1, 2007) is $3,500. This is the result of a dollar-for-dollar reduction of the Highest
Daily Annual Income Amount -- $6,000 less $2,500 = $3,500.
Proportional reductions
Continuing the previous example, assume an additional withdrawal of $5,000 occurs on August 6, 2007 and the Account Value at the
time of this withdrawal is $110,000. The first $3,500 of this withdrawal reduces the Highest Daily Annual Income Amount for that
Annuity Year to $0. The remaining withdrawal amount -- $1,500 - reduces the Highest Daily Annual Income Amount in future Annuity
Years on a proportional basis based on the ratio of the excess withdrawal to the Account Value immediately prior to the excess
withdrawal. (Note that if there were other withdrawals in that Annuity Year, each withdrawal would result in another proportional
reduction to the Highest Daily Annual income Amount).
Here is the calculation:
Account Value before withdrawal $110,000.00
Less amount of "non" excess withdrawal -$3,500.00
Account Value immediately before excess withdrawal of $1,500 $106,500.00
Excess withdrawal amount $1,500.00
Divided by Account Value immediately before excess withdrawal $106,500.00
Ratio 1.41%
Annual Income Amount $6,000.00
Less ratio of 1.41% -$84.51
Annual Income Amount for future Annuity Years $5,915.49
Highest Quarterly Step-Up
On each Annuity Anniversary date, the Highest Daily Annual Income Amount is stepped-up if 5% of the highest quarterly value since
your first withdrawal (or last Annuity Anniversary in subsequent years), adjusted for excess withdrawals and additional Purchase
Payments, is higher than the Highest Daily Annual Income Amount, also adjusted for excess withdrawals and additional Purchase
Payments.
Continuing the same example as above, the Highest Daily Annual Income Amount for this Annuity Year is $6,000. However, the excess
withdrawal on August 6 reduces this amount to $5,915.49 for future years (see above). For the next Annuity Year, the Highest
Daily Annual Income Amount will be stepped-up if 5% of the highest quarterly Account Value, adjusted for withdrawals, is higher
than $5,915.49. Here are the calculations for determining the quarterly values. Only the June 1 value is being adjusted for
excess withdrawals as the September 1 and December 1 Valuation Days occur after the excess withdrawal on August 6.
Highest Quarterly
Value (adjusted with Adjusted Highest Daily
withdrawal and Annual Income Amount (5% of
Date* Account value Purchase Payments)** the Highest Quarterly Value)
June 1, 2007 $118,000.00 $118,000.00 $5,900.00
August 6, 2007 $120,000.00 $112,885.55 $5,644.28
September 1, 2007 $112,000.00 $112,885.55 $5,644.28
December 1, 2007 $119,000.00 $119,000.00 $5,950.00
*In this example, the Annuity Anniversary date is December 1. The quarterly valuation dates are every three months thereafter -
March 1, June 1, September 1, and December 1. In this example, we do not use the March 1 date as the first withdrawal took place
after March 1. The Annuity Anniversary Date of December 1 is considered the fourth and final quarterly valuation date for the
year.
**In this example, the first quarterly value after the first withdrawal is $118,000 on June 1, yielding an adjusted Highest Daily
Annual Income Amount of $5,900.00. This amount is adjusted on August 6 to reflect the $5,000 withdrawal. The calculations for
the adjustments are:
|X| The Account Value of $118,000 on June 1 is first reduced dollar-for-dollar by $3,500 ($3,500 is the remaining Highest
Daily Annual Income Amount for the Annuity Year), resulting in an adjusted Account Value of $114,500 before the excess
withdrawal.
|X| This amount ($114,500) is further reduced by 1.41% (this is the ratio in the above example which is the excess
withdrawal divided by the Account Value immediately preceding the excess withdrawal) resulting in a Highest Quarterly
Value of $112,885.55.
The adjusted Highest Daily Annual Income Amount is carried forward to the next quarterly anniversary date of September 1. At this
time, we compare this amount to 5% of the Account Value on September 1. Since the June 1 adjusted Highest Daily Annual Income
Amount of $5,644.28 is higher than $5,600.00 (5% of $112,000), we continue to carry $5,644.28 forward to the next and final
quarterly anniversary date of December 1. The Account Value on December 1 is $119,000 and 5% of this amount is $5,950. Since
this is higher than $5,644.28, the adjusted Highest Daily Annual Income Amount is reset to $5,950.00
In this example, 5% of the December 1 value yields the highest amount of $ 5,950.00. Since this amount is higher than the current
year's Highest Daily Annual Income Amount of $5,915.49 adjusted for excess withdrawals, the Highest Daily Annual Income Amount for
the next Annuity Year, starting on December 2, 2007 and continuing through December 1, 2008, will be stepped-up to $5,950.00.
BENEFITS UNDER THE HIGHEST DAILY LIFETIME FIVE PROGRAM
o To the extent that your Account Value was reduced to zero as a result of cumulative withdrawals that are equal to or less
than the Highest Daily Annual Income Amount and amounts are still payable under the Highest Daily Life Income Benefit, we
will make an additional payment, if any, for that Annuity Year equal to the remaining Highest Daily Annual Income Amount
for the Annuity Year. Thus, in that scenario, the remaining Highest Daily Annual Income Amount would be payable even
though your Account Value was reduced to zero. In subsequent Annuity Years we make payments that equal the Highest Daily
Annual Income Amount as described in this section. We will make payments until the death of the single designated life.
To the extent that cumulative withdrawals in the current Annuity Year that reduced your Account Value to zero are more
than the Highest Daily Annual Income Amount, the Highest Daily Lifetime Five benefit terminates, and no additional
payments will be made.
o If Annuity payments are to begin under the terms of your Annuity, or if you decide to begin receiving Annuity payments
and there is a Highest Daily Annual Income Amount due in subsequent Annuity Years, you can elect one of the following two
options:
(1) apply your Account Value to any Annuity option available; or
(2) request that, as of the date Annuity payments are to begin, we make Annuity payments each year equal to the Highest
Daily Annual Income Amount. We will make payments until the death of the single designated life.
We must receive your request in a form acceptable to us at our office.
In the absence of an election when mandatory annuity payments are to begin, we will make annual annuity payments in the form of a
single life fixed annuity with ten payments certain, by applying the greater of the annuity rates then currently available or the
annuity rates guaranteed in your Annuity. The amount that will be applied to provide such Annuity payments will be the greater of:
(1) the present value of the future Highest Daily Annual Income Amount payments. Such present value will be calculated
using the greater of the single life fixed annuity rates then currently available or the single life fixed annuity rates
guaranteed in your Annuity; and
(2) the Account Value.
o If no withdrawal was ever taken, we will determine the Protected Withdrawal Value and calculate the Highest Daily Annual
Income Amount as if you made your first withdrawal on the date the annuity payments are to begin.
Other Important Considerations
o Withdrawals under the Highest Daily Lifetime Five benefit are subject to all of the terms and conditions of the Annuity,
including any CDSC.
o Withdrawals made while the Highest Daily Lifetime Five program is in effect will be treated, for tax purposes, in the
same way as any other withdrawals under the Annuity. The Highest Daily Lifetime Five program does not directly affect the
Account Value or surrender value, but any withdrawal will decrease the Account Value by the amount of the withdrawal
(plus any applicable CDSC). If you surrender your Annuity you will receive the current surrender value.
o You can make withdrawals from your Annuity while your Account Value is greater than zero without purchasing the Highest
Daily Lifetime Five benefit. The Highest Daily Lifetime Five benefit provides a guarantee that if your Account Value
declines due to market performance, you will be able to receive your Highest Daily Annual Income Amount in the form of
periodic benefit payments.
o You must allocate your Account Value in accordance with the then available investment option(s) that we may permit in
order to elect and maintain the Highest Daily Lifetime Five benefit.
Election of and Designations under the Program
For Highest Daily Lifetime Five, there must be either a single Owner who is the same as the Annuitant, or if the Annuity is
entity-owned, there must be a single natural person Annuitant. In either case, the Annuitant must be at least 55 years old.
Any change of the Annuitant under the Annuity will result in cancellation of Highest Daily Lifetime Five. Similarly, any change
of Owner will result in cancellation of Highest Daily Lifetime Five, except if (a) the new Owner has the same taxpayer
identification number as the previous owner (b) both the new Owner and previous Owner are entities or (c) the previous Owner is a
natural person and the new Owner is an entity.
Highest Daily Lifetime Five can be elected at the time that you purchase your Annuity. We also offer existing owners (i.e., those
who have already acquired their Annuity) the option to elect Highest Daily Lifetime Five after the Issue Date, subject to our
eligibility rules and restrictions.
Currently, if you terminate the Highest Daily Lifetime Five benefit, you will (a) not be permitted to re-elect the benefit and (b)
will be allowed to elect the Spousal Lifetime Five Benefit or the Lifetime Five Income Benefit on any anniversary of the Issue
Date that is at least 90 calendar days from the date the Highest Daily Lifetime Five Benefit was terminated. We reserve the right
to further limit the election frequency in the future. Before making any such change to the election frequency, we will provide
prior notice to Owners who have an effective Highest Daily Lifetime Five benefit.
Termination of the Program
You may terminate the benefit at any time by notifying us. If you terminate the benefit, any guarantee provided by the benefit
will terminate as of the date the termination is effective, and certain restrictions on re-election will apply as described above.
We reserve the right to further limit the frequency election in the future. The benefit terminates: (i) upon your termination of
the benefit (ii) upon your surrender of the Annuity (iii) upon your election to begin receiving annuity payments (iv) upon the
death of the designated life (v) if both the Account Value and Highest Daily Annual Income Amount equal zero or (vi) if you fail
to meet our requirements for issuing the benefit.
Upon termination of Highest Daily Lifetime Five, we cease deducting the charge for the benefit. With regard to your investment
allocations, upon termination we will: (i) leave intact amounts that are held in the variable investment options, and (ii)
transfer all amounts held in the Benefit Fixed Rate Account (as described below) to your variable investment options, based on
your existing allocation instructions or (in the absence of such existing instructions) pro rata (i.e. in the same proportion as
the current balances in your variable investment options).
Asset Transfer Component of Highest Daily Lifetime Five
As indicated above, we limit the sub-accounts to which you may allocate Account Value if you elect Highest Daily Value Lifetime
Five. For purposes of this benefit, we refer to those permitted sub-accounts as the "Permitted Sub-accounts". A list of the
Permitted Sub-accounts appears in the application form that you must submit to us in order to elect this benefit. As a requirement
of participating in Highest Daily Lifetime Five, we require that you participate in our specialized asset transfer program, under
which we may transfer Account Value between the Permitted Sub-accounts and a fixed interest rate account that is part of our
general account (the "Benefit Fixed Rate Account"). We determine whether to make a transfer, and the amount of any transfer,
under a non-discretionary formula, discussed below. The Benefit Fixed Rate Account is available only with this benefit, and thus
you may not allocate purchase payments to that Account.
Under the asset transfer component of Highest Daily Lifetime Five, we monitor your Account Value daily and, if necessary,
systematically transfer amounts between the Permitted Sub-accounts you have chosen and the Benefit Fixed Rate Account. Any
transfer would be made in accordance with a formula, which is set forth in the schedule supplement to the endorsement for this
benefit (and also appears in the Appendices to this prospectus). Speaking generally, the formula, which we apply each business
day, operates as follows. The formula starts by identifying your Protected Withdrawal Value for that day and then multiplies
that figure by 5%, to produce a projected (i.e., hypothetical) Highest Daily Annual Income Amount. Then, using our actuarial
tables, we produce an estimate of the total amount of our obligation, based on the projected Highest Daily Annual Income Amount
each year for the rest of your life. In the formula, we refer to that value as the "Target Value" or "L". If you have already
made a withdrawal, your projected Highest Daily Annual Income Amount (and thus your Target Value) would take into account any
automatic step-up implemented according to the step-up formula described above. Next, the formula subtracts from the Target
Value the amount held within the Benefit Fixed Rate Account on that day, and divides that difference by the amount held within
the Permitted Sub-accounts. That ratio, which essentially isolates the amount of your Liability Value that is not offset by
amounts held within the Benefit Fixed Rate Account, is called the "Target Ratio". If the Target Ratio exceeds a certain
percentage, it means essentially that too much Target Value is not offset by assets within the Benefit Fixed Rate Account, and
therefore we will transfer an amount from your Permitted Sub-accounts to the Benefit Fixed Rate Account. Conversely, if the
Target Ratio falls below a certain percentage, then a transfer from the Benefit Fixed Rate Account to the Permitted Sub-accounts
would occur.
As you can glean from the formula, a downturn in the securities markets (i.e., a reduction in the amount held within the Permitted
Sub-accounts) may cause us to transfer some of your variable Account Value to the Benefit Fixed Rate Account, because such a
reduction will tend to increase the Target Ratio. Moreover, certain market return scenarios involving "flat" returns over a
period of time also could result in the transfer of money to the Benefit Fixed Rate Account. In deciding how much to transfer, we
use another formula, which essentially seeks to re-balance amounts held in the Permitted Sub-accounts and the Benefit Fixed Rate
Account so that the Target Ratio meets a target ratio, which currently is equal to 80%. Once you elect Highest Daily Lifetime
Five, the ratios we use will be fixed. For contracts issued in the future that elect Highest Daily Lifetime Five, however, we
reserve the right to change the ratios.
Depending on the results of the calculation relative to the reallocation triggers, we may, on any day:
o Not make any transfer; or
o If a portion of your Account Value was previously allocated to the Benefit Fixed Rate Account, transfer all or a portion
of those amounts to the Permitted Sub-accounts, based on your existing allocation instructions or (in the absence of such
existing instructions) pro rata (i.e., in the same proportion as the current balances in your variable investment
options). Amounts taken out of the Benefit Fixed Rate Account will be withdrawn for this purpose on a last-in, first-out
basis (an amount renewed into a new guarantee period under the Benefit Fixed Rate Account will be deemed a new investment
for purposes of this last-in, first-out rule); or
o Transfer all or a portion of your Account Value in the Permitted Sub-accounts pro-rata to the Benefit Fixed Rate Account.
The interest that you earn on such transferred amount will be equal to the annual rate that we have set for that day, and
we will credit the daily equivalent of that annual interest until the earlier of one year from the date of the transfer
or the date that such amount in the Benefit Fixed Rate Account is transferred back to the Permitted Sub-accounts.
If a significant amount of your Account Value is systematically transferred to the Benefit Fixed Rate Account during periods of
market declines or low interest rates, less of your Account Value may be available to participate in the investment experience of
the Permitted Sub-accounts if there is a subsequent market recovery. Under the reallocation formula that we employ, it is possible
that a significant portion of your Account Value may be allocated to the Benefit Fixed Rate Account.
Additional Tax Considerations for Qualified Contracts
If you purchase an annuity as an investment vehicle for "qualified" investments, including an IRA, SEP-IRA, Tax Sheltered Annuity
(or 403(b)) or employer plan under Code Section 401(a), the minimum distribution rules under the Code require that you begin
receiving periodic amounts from your annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a 401(a) plan for which
the participant is not a greater than 5 percent owner of the employer, this required beginning date can generally be deferred to
retirement, if later. Roth IRAs are not subject to these rules during the owner's lifetime. The amount required under the Code may
exceed the Highest Daily Annual Income Amount, which will cause us to increase the Highest Daily Annual Income Amount in any
Annuity Year that required minimum distributions due from your Annuity that are greater than such amounts. In addition, the
amount and duration of payments under the annuity payment and death benefit provisions may be adjusted so that the payments do not
trigger any penalty or excise taxes due to tax considerations such as minimum distribution requirements.
E. APPENDIX A: Selecting The Variable Annuity That's Right For You. In the product comparison chart, we revise the line item
(and accompanying footnote) concerning Living Benefits to reflect that Highest Daily Lifetime Five is available under Pruco Life's
Prudential Premier Series Annuity.
F. We add the following as Appendix C:
Appendix C
Asset Transfer Formula Under Highest Daily Lifetime Five Benefit
We set out below the current formula under which we may transfer amounts between the variable investment options and the Benefit
Fixed Rate Account. We reserve the right to modify this formula with respect to those who elect Highest Daily Lifetime Five in
the future. However, upon your election of Highest Daily Lifetime Five, we will not alter the asset transfer formula that applies
to your contract.
Terms and Definitions referenced in the calculation formula:
o Cu - the upper target is established on the effective date of the Highest Daily Lifetime Five benefit (the "Effective
Date") and is not changed for the life of the guarantee. Currently, it is 83%.
o Ct - the target is established on the Effective Date and is not changed for the life of the guarantee. Currently, it is
80%.
o Cl - the lower target is established on the Effective Date and is not changed for the life of the guarantee. Currently,
it is 77%.
o L - the target value as of the current business day.
o r - the target ratio.
o a - the factors used in calculating the target value. These factors are established on the Effective Date and are not
changed for the life of the guarantee. The factors that we use currently are derived from the a2000 Individual Annuity
Mortality Table with an assumed interest rate of 3%. Each number in the table "a" factors (which appears below) represents
a factor, which when multiplied by the Highest Daily Annual Income Amount, projects our total liability for the purpose of
asset transfers under the guarantee.
o Q - age based factors used in calculating the target value. These factors are established on the Effective Date and are
not changed for the life of the guarantee The factor is currently set equal to 1.
o V - the total value of all Permitted Sub-accounts in the annuity.
o F - the total value of all Benefit Fixed Rate Account allocations.
o I - the Income Value prior to the first withdrawal. The Income Value is equal to what the Highest Daily Annual Income
Amount would be if the first withdrawal were taken on the date of calculation. After the first withdrawal the Income Value
equals the greater of the Highest Daily Annual Income Amount, the quarterly step-up amount times the Annual Income
Percentage, and the Account Value times the Annual Income Percentage.
o T - the amount of a transfer into or out of the Benefit Fixed Rate Account.
o I% - Annual Income Amount percentage. This factor is established on the Effective Date and is not changed for the life
of the guarantee. Currently, this percentage is equal to 5%.
Target Value Calculation:
On each Valuation Day, a target value (L) is calculated, according to the following formula. If the variable Account Value (V) is
equal to zero, no calculation is necessary.
L = I * Q * a
Transfer Calculation:
The following formula, which is set on the Effective Date and is not changed for the life of the guarantee, determines when a
transfer is required:
Target Ratio r = (L - F) / V.
o If r > Cu, assets in the Permitted Sub-accounts are transferred to Benefit Fixed Rate Account.
o If r < Cl, and there are currently assets in the Benefit Fixed Rate Account (F > 0), assets in the Benefit Fixed Rate
Account are transferred to the Permitted Sub-accounts.
The following formula, which is set on the Effective Date and is not changed for the life of the guarantee, determines the
transfer amount:
T ={Min(V, [L - F - V * Ct] / (1-Ct))} T>0, Money moving from the Permitted Sub-accounts to the Benefit
Fixed Rate Account
T ={Min(F, [L - F - V * Ct] / (1-Ct))} T<0, Money moving from the Benefit Fixed Rate Account to the
Permitted Sub-accounts]
Example:
Male age 65 contributes $100,000 into the Permitted Sub accounts and the value drops to $92,300 during year one, end of day one.
A table of values for "a" appears below.
Target Value Calculation:
L = I * Q * a
= 5000.67 * 1 * 15.34
= 76,710.28
Target Ratio:
r = (L - F) / V
= (76,710.28 - 0) / 92,300.00
= 83.11%
Since r > Cu ( because 83.11% > 83%) a transfer into the Benefit Fixed rate Account occurs.
T = { Min ( V, [ L - F - V * Ct] / ( 1 - Ct))}
= { Min ( 92,300.00, [ 76,710.28 - 0 - 92,300.00 * 0.80] / ( 1 - 0.80))}
= { Min ( 92,300.00, 14,351.40 )}
= 14,351.40
Age 65 "a" Factors for Liability Calculations
(in Years and Months since Benefit Effective Date)*
Months
Years 1 2 3 4 5 6 7 8 9 10 11 12
1 15.34 15.31 15.27 15.23 15.20 15.16 15.13 15.09 15.05 15.02 14.98 14.95
2 14.91 14.87 14.84 14.80 14.76 14.73 14.69 14.66 14.62 14.58 14.55 14.51
3 14.47 14.44 14.40 14.36 14.33 14.29 14.26 14.22 14.18 14.15 14.11 14.07
4 14.04 14.00 13.96 13.93 13.89 13.85 13.82 13.78 13.74 13.71 13.67 13.63
5 13.60 13.56 13.52 13.48 13.45 13.41 13.37 13.34 13.30 13.26 13.23 13.19
6 13.15 13.12 13.08 13.04 13.00 12.97 12.93 12.89 12.86 12.82 12.78 12.75
7 12.71 12.67 12.63 12.60 12.56 12.52 12.49 12.45 12.41 12.38 12.34 12.30
8 12.26 12.23 12.19 12.15 12.12 12.08 12.04 12.01 11.97 11.93 11.90 11.86
9 11.82 11.78 11.75 11.71 11.67 11.64 11.60 11.56 11.53 11.49 11.45 11.42
10 11.38 11.34 11.31 11.27 11.23 11.20 11.16 11.12 11.09 11.05 11.01 10.98
11 10.94 10.90 10.87 10.83 10.79 10.76 10.72 10.69 10.65 10.61 10.58 10.54
12 10.50 10.47 10.43 10.40 10.36 10.32 10.29 10.25 10.21 10.18 10.14 10.11
13 10.07 10.04 10.00 9.96 9.93 9.89 9.86 9.82 9.79 9.75 9.71 9.68
14 9.64 9.61 9.57 9.54 9.50 9.47 9.43 9.40 9.36 9.33 9.29 9.26
15 9.22 9.19 9.15 9.12 9.08 9.05 9.02 8.98 8.95 8.91 8.88 8.84
16 8.81 8.77 8.74 8.71 8.67 8.64 8.60 8.57 8.54 8.50 8.47 8.44
17 8.40 8.37 8.34 8.30 8.27 8.24 8.20 8.17 8.14 8.10 8.07 8.04
18 8.00 7.97 7.94 7.91 7.88 7.84 7.81 7.78 7.75 7.71 7.68 7.65
19 7.62 7.59 7.55 7.52 7.49 7.46 7.43 7.40 7.37 7.33 7.30 7.27
20 7.24 7.21 7.18 7.15 7.12 7.09 7.06 7.03 7.00 6.97 6.94 6.91
21 6.88 6.85 6.82 6.79 6.76 6.73 6.70 6.67 6.64 6.61 6.58 6.55
22 6.52 6.50 6.47 6.44 6.41 6.38 6.36 6.33 6.30 6.27 6.24 6.22
23 6.19 6.16 6.13 6.11 6.08 6.05 6.03 6.00 5.97 5.94 5.92 5.89
24 5.86 5.84 5.81 5.79 5.76 5.74 5.71 5.69 5.66 5.63 5.61 5.58
25 5.56 5.53 5.51 5.48 5.46 5.44 5.41 5.39 5.36 5.34 5.32 5.29
26 5.27 5.24 5.22 5.20 5.18 5.15 5.13 5.11 5.08 5.06 5.04 5.01
27 4.99 4.97 4.95 4.93 4.91 4.88 4.86 4.84 4.82 4.80 4.78 4.75
28 4.73 4.71 4.69 4.67 4.65 4.63 4.61 4.59 4.57 4.55 4.53 4.51
29 4.49 4.47 4.45 4.43 4.41 4.39 4.37 4.35 4.33 4.32 4.30 4.28
30 4.26 4.24 4.22 4.20 4.18 4.17 4.15 4.13 4.11 4.09 4.07 4.06
31 4.04 4.02 4.00 3.98 3.97 3.95 3.93 3.91 3.90 3.88 3.86 3.84
32 3.83 3.81 3.79 3.78 3.76 3.74 3.72 3.71 3.69 3.67 3.66 3.64
33 3.62 3.61 3.59 3.57 3.55 3.54 3.52 3.50 3.49 3.47 3.45 3.44
34 3.42 3.40 3.39 3.37 3.35 3.34 3.32 3.30 3.29 3.27 3.25 3.24
35 3.22 3.20 3.18 3.17 3.15 3.13 3.12 3.10 3.08 3.07 3.05 3.03
36 3.02 3.00 2.98 2.96 2.95 2.93 2.91 2.90 2.88 2.86 2.85 2.83
37 2.81 2.79 2.78 2.76 2.74 2.73 2.71 2.69 2.68 2.66 2.64 2.62
38 2.61 2.59 2.57 2.56 2.54 2.52 2.51 2.49 2.47 2.45 2.44 2.42
39 2.40 2.39 2.37 2.35 2.34 2.32 2.30 2.29 2.27 2.25 2.24 2.22
40 2.20 2.19 2.17 2.15 2.14 2.12 2.11 2.09 2.07 2.06 2.04 2.02
41 2.01 1.84 1.67 1.51 1.34 1.17 1.00 0.84 0.67 0.50 0.33 0.17
* The values set forth in this table are applied to all ages.
Supplement to Prospectuses Dated May 1, 2006
Supplement dated November 20, 2006
Supplement dated November 20, 2006 to the May 1, 2006 Prospectus for Pruco Life Insurance Company of New Jersey's Prudential
Premier Series Annuity
This Supplement should be read and retained with the current Prospectus for your annuity. This Supplement is intended to update
certain information in the Prospectus for the variable annuity you own, and is not intended to be a prospectus or offer for any
other variable annuity listed here that you do not own. If you would like another copy of the current Prospectus, please contact
us at 1-888-PRU-2888.
We are issuing this supplement to describe in the prospectus for the Pruco Life Insurance Company of New Jersey ("PLNJ")
Prudential Premier Series Annuity, certain changes with respect to the underlying mutual funds. These changes will be effective
on or about November 20, 2006, unless specifically stated otherwise.
1. CHANGE WITH RESPECT TO CERTAIN PORTFOLIOS OF AMERICAN SKANDIA TRUST
In the Investment Options section of the prospectus, we make the following changes to the chart setting forth a brief description
of each variable investment option, to reflect the following subadviser name change with respect to one of the variable investment
options:
o AST Small Cap Value Portfolio. Salomon Brothers Asset Management will change its name to ClearBridge Advisers LLC,
effective in December 2006.
In the Investment Options section of the prospectus, we revise the investment objectives/policies section, and portfolio
advisor/sub-advisor section for two Portfolios to read as follows. These new descriptions reflect the addition of sub-advisors as
well as revisions to non-fundamental investment policies:
AST LSV International Value Portfolio.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International AST International Value Portfolio (formerly AST LSV International Value Portfolio): seeks LSV Asset Management,
capital growth. The Portfolio normally invests at least 80% of the Portfolio's investable Thornburg Investment
assets (net assets plus borrowings made for investment purposes) in the equity securities of Management, Inc.
Equity companies in developed countries outside the United States that are represented in the MSCI
EAFE Index.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
AST William Blair International Growth Portfolio.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International AST International Growth Portfolio (formerly,AST William Blair International Growth Marsico Capital
Portfolio): seeks long-term capital appreciation. The Portfolio invests primarily in Management LLC,
equity-related securities of foreign issuers. The Portfolio invests primarily in the common William Blair &
stock of large and medium-sized foreign companies, although it may also invest in companies of Company, LLC
all sizes. Under normal circumstances, the Portfolio invests at least 65% of its total assets
Equity in common stock of foreign companies operating or based in at least five different countries,
which may include countries with emerging markets. The Portfolio looks primarily for stocks of
companies whose earnings are growing at a faster rate than other companies or which offer
attractive growth potential.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
Pruco Life Insurance Company of New Jersey
Strategic Partners Annuity One 3
Strategic Partners Plus 3
Strategic Partners Select
Strategic Partner Advisor
Supplement, dated November 20, 2006
To
Prospectuses, dated May 1, 2006
For each of the above-referenced prospectuses, this supplement reflects certain changes to the underlying mutual funds.
In Section 2 of each prospectus, we make the following change to the chart setting forth a brief description of each variable
investment option, to reflect a subadviser name change:
o SP Small Cap Value Portfolio, AST Small Cap Value Portfolio, and Prudential Series Fund Equity Portfolio. Salomon
Brothers Asset Management will change its name to ClearBridge Advisers LLC, effective in December 2006.
In section 2 of each prospectus, we revise the investment objectives/policies section, and portfolio adviser/sub-adviser section
for two Portfolios to read as follows. These new descriptions reflect the addition of sub-advisers as well as revisions to
non-fundamental investment policies:
o SP LSV International Value Portfolio:
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISER/
TYPE SUB-ADVISER
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International SP International Value Portfolio (formerly SP LSV International Value Portfolio): seeks LSV Asset Management,
capital growth. The Portfolio normally invests at least 80% of the Portfolio's investable Thornburg Investment
assets (net assets plus borrowings made for investment purposes) in the equity securities of Management, Inc.
Equity companies in developed countries outside the United States that are represented in the MSCI
EAFE Index.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
o SP William Blair International Growth Portfolio
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISER/
TYPE SUB-ADVISER
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
International SP International Growth Portfolio (formerly, SP William Blair International Growth Marsico Capital
Portfolio): seeks long-term capital appreciation. The Portfolio invests primarily in Management LLC,
equity-related securities of foreign issuers. The Portfolio invests primarily in the common William Blair &
stock of large and medium-sized foreign companies, although it may also invest in companies of Company, LLC
all sizes. Under normal circumstances, the Portfolio invests at least 65% of its total assets
Equity in common stock of foreign companies operating or based in at least five different countries,
which may include countries with emerging markets. The Portfolio looks primarily for stocks of
companies whose earnings are growing at a faster rate than other companies or which offer
attractive growth potential.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
This prospectus supplement is intended to amend the prospectus for the annuity you own, and is not intended to be a
prospectus or offer for any annuity listed here that you do not own.