UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-01737
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
(Exact name of registrant as specified in charter)
8515 E. Orchard Road, Greenwood Village, Colorado 80111
(Address of principal executive offices)
BEVERLY A. BYRNE
Vice-President and Counsel
Great-West Life & Annuity Insurance Company
8515 E. Orchard Road
Greenwood Village, Colorado 80111
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 737-3000
Date of fiscal year end: December 31
Date of reporting period: June 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS
Great-West Variable Annuity Account A
Financial Statements and Financial Highlights for
The Six Months Ended June 30, 2005 and Year Ended December 31, 2004
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
UNAUDITED
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- ---------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, market value (1) $ 6,416,321
Cash 96,377
Dividends receivable 9,896
Due from affiliate, net 516,960
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-----------------
Total assets 7,039,554
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-----------------
NET ASSETS $ 7,039,554
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=================
NET ASSETS REPRESENTED BY:
Accumulation units - 349,240 units at $18.66 $ 6,516,141
Reserves for annuities in course of payment 523,413
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-----------------
NET ASSETS $ 7,039,554
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=================
(1) Cost of investments in securities: $ 4,551,321
See notes to financial statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
UNAUDITED
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- ----------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 410
Dividends 66,329
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---------------
Total income 66,739
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EXPENSES:
Administration 9,092
Mortality risks 12,294
Investment management and advisory services 14,817
Expense risks 2,190
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---------------
Total expenses 38,393
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---------------
NET INVESTMENT INCOME 28,346
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (18,328)
Change in net unrealized appreciation on investments 130,945
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---------------
Net realized and unrealized gain on investments 112,617
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---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 140,963
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===============
See notes to financial statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 2005 AND YEAR ENDED DECEMBER 31, 2004
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- ----------------------------------------------------------------------------------------------------
2005 2004
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------------------------------
UNAUDITED
OPERATIONS:
Net investment income $ 28,346 $ 54,087
Net realized gain (loss) on investments (18,328) 256,262
Change in net unrealized appreciation on investments 130,945 613,600
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Net increase in net assets resulting from operations 140,963 923,949
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UNIT TRANSACTIONS:
Surrenders (58,249) (235,953)
Annuity payments (73,035)
Death payments (46,609) (82,359)
Adjustments to net assets allocated to reserves for annuities
in course of payment (51,257) 150,068
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Net decrease in net assets resulting from unit transactions (156,115) (241,279)
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Total increase (decrease) in net assets (15,152) 682,670
NET ASSETS:
Beginning of period 7,054,706 6,372,036
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End of period $ 7,039,554 $ 7,054,706
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OTHER INFORMATION:
UNITS:
Redeemed during the year:
Surrender (3,217) (14,144)
Death (2,504) (5,048)
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Net decrease (5,721) (19,192)
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See notes to financial statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
FINANCIAL HIGHLIGHTS
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- ----------------------------------------------------------------------------------------------------------------
Selected data for an accumulation unit for the periods indicated were as
follows:
Six Months End Year Ended December 31,
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June 30, 2005 2004 2003 2002 2001 2000
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------------------------ ----------- ---------- --------- ----------
UNAUDITED
Unit Value, Beginning of Period $ 18.2556 $ 15.7071 $ 12.4335 $ 13.9968 $ 14.3150 $ 12.4020
Income from Investment Operations
Net investment income 0.1003 0.2045 0.2517 0.1544 0.1532 0.1605
Net realized and unrealized gain (loss) 0.3022 2.3440 3.0219 (1.7177) (0.4714) 1.7525
---------- ----------- ----------- ---------- --------- ----------
---------- ----------- ----------- ---------- --------- ----------
Total Income (Loss) From
Investment Operations o 0.4025 2.5485 3.2736 (1.5633) (0.3182) 1.9130
---------- ----------- ----------- ---------- --------- ----------
---------- ----------- ----------- ---------- --------- ----------
Unit Value, End of Period $ 18.6581 $ 18.2556 $ 15.7071 $ 12.4335 $ 13.9968 $ 14.3150
========== =========== =========== ========== ========= ==========
========== =========== =========== ========== ========= ==========
Total Return 2.20% ^ 16.23% 26.33% (11.17%) (2.22%) 15.42%
Net Assets, End of Period $ 6,516,141 $ 6,480,036 $ 5,876,858 $ 5,250,832 $ 6,166,806 $ 6,744,185
Ratio of Expense to
Average Net Assets 1.21% * 1.21% 1.21% 1.21% 1.27% 1.20%
Ratio of Net Investment Income to
Average Net Assets 0.89% * 0.89% 1.07% 0.94% 0.86% 1.40%
Portfolio Turnover Rate 2.57% ^ 13.47% 13.49% 37.55% 14.13% 15.42%
o Net investment income and realized and unrealized gains (losses) are reflected
in the value of the accumulation units. Dividends are not declared from income
and capital gains are not distributed.
* Annualized
^ Based on operations for the period shown and, accordingly, are not
representative of a full year.
See notes to financial statements.
Great-West Variable Annuity Account A
Schedule of Investments
June 30, 2005
Unaudited
COMMON STOCK
Shares Value ($)
AEROSPACE & DEFENSE --- 3.7%
1,350 Lockheed Martin Corp 87,575
3,200 Rockwell Collins 152,576
$240,151
AUTO PARTS & EQUIPMENT --- 2.8%
3,200 Johnson Controls Inc 180,256
$180,256
BANKS --- 5.5%
5,123 Regions Financial Corp 173,567
3,625 Wachovia Corp 179,800
$353,367
BUILDING MATERIALS --- 3.5%
3,500 Vulcan Materials Co 227,465
$227,465
CHEMICALS --- 2.4%
2,500 PPG Industries Inc 156,900
$156,900
COMMUNICATIONS - EQUIPMENT --- 2.0%
110 Lucent Technologies Inc* 85
7,100 Motorola Inc 129,646
$129,731
COMPUTER HARDWARE & SYSTEMS --- 1.7%
2,800 Dell Inc* 110,628
$110,628
ELECTRIC COMPANIES --- 3.1%
4,300 Consolidated Edison Inc 201,412
$201,412
ELECTRONIC INSTRUMENT & EQUIP --- 2.4%
3,200 Rockwell Automation Inc 155,872
$155,872
ELECTRONICS - SEMICONDUCTOR --- 1.8%
4,400 Intel Corp 114,664
$114,664
FINANCIAL SERVICES --- 2.3%
4,224 JPMorgan Chase & Co 149,192
$149,192
FOOD & BEVERAGES --- 2.9%
3,000 Hershey Foods Corp 186,300
$186,300
HOUSEHOLD GOODS --- 8.3%
2,900 Kimberly-Clark Corp 181,511
4,500 Leggett & Platt Inc 119,610
5,900 Maytag Corp 92,394
5,900 Newell Rubbermaid Inc 140,656
$534,171
INSURANCE RELATED --- 11.0%
2,500 Allstate Corp 149,375
2,600 Hartford Financial Services Group Inc 194,428
3,800 Lincoln National Corp 178,296
3,475 Torchmark Corp 181,395
$703,494
LEISURE & ENTERTAINMENT --- 2.7%
10,220 Time Warner Inc* 170,776
$170,776
OFFICE EQUIPMENT & SUPPLIES --- 2.1%
10,000 Xerox Corp* 137,900
$137,900
OIL & GAS --- 11.0%
2,424 Exxon Mobil Corp 139,307
2,100 Schlumberger Ltd 159,474
2,530 Sunoco Inc 287,610
2,200 Transocean Inc* 118,734
$705,125
PHARMACEUTICALS --- 3.2%
3,200 Johnson & Johnson 208,000
$208,000
PRINTING & PUBLISHING --- 4.5%
2,100 Gannett Co Inc 149,373
4,000 Tribune Co 140,720
$290,093
RESTAURANTS --- 3.2%
5,100 Brinker International Inc* 204,255
$204,255
RETAIL --- 4.0%
4,400 Albertson's Inc 90,992
3,700 Costco Wholesale Corp 165,834
$256,826
SPECIALIZED SERVICES --- 1.4%
8,000 Adecco SA 90,880
$90,880
TELEPHONE & TELECOMMUNICATIONS --- 2.2%
6,000 SBC Communications Inc 142,500
$142,500
TEXTILES --- 2.4%
3,900 Liz Claiborne Inc 155,064
$155,064
UTILITIES --- 9.5%
3,500 Constellation Energy Group 201,915
7,400 Duke Energy Corp 220,002
4,600 NICOR Inc 189,382
$611,299
TOTAL COMMON STOCK --- 100.0% $6,416,321
(Cost $4,551,321)
TOTAL GREAT-WEST VARIABLE ANNUITY ACCOUNT A --- 100.0% $6,416,321
(Cost $4,551,321)
Legend
* Non-income Producing Security
See Notes to Financial Statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
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UNAUDITED
1. ORGANIZATION & SIGNIFICANT ACCOUNTING POLICIES
Great-West Variable Annuity Account A (Variable Annuity Account A) is a
separate and distinct investment fund established by The Great-West Life
Assurance Company (Great-West Life). On December 31, 1991, Variable
Annuity Account A was transferred to and the variable annuity contracts
were reinsured by Great-West Life & Annuity Insurance Company (GWL&A),
an affiliate of Great-West Life. Variable Annuity Account A is
registered as an open-end diversified management investment company
under the Investment Company Act of 1940, and the registration under the
Securities Act of 1933 of the group variable annuity contracts funded by
Variable Annuity Account A became effective on November 27, 1968.
Purchase payments were first placed in Variable Annuity Account A on
January 3, 1969.
Effective April 6, 1984, Great-West Life ceased issuing variable annuity
contracts. Effective May 1, 1987, Great-West Life has not allowed new
participants to be enrolled under existing variable annuity contracts
and effective May 1, 1989, no additional contributions under existing
variable annuity contracts are being accepted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
the significant accounting policies of Variable Annuity Account A.
Security Valuation
Short-term securities with a maturity of 60 days or less are valued on
the basis of amortized cost. Equity securities are valued at the last
sale price as of the close of business of the principal exchange. If the
closing price is not available, the current bid will be used. Variable
Annuity Account A utilizes the "NASDAQ Official Closing Price" for
securities principally traded on the NASDAQ National Market System.
Fixed income and other securities are valued by independent pricing
services approved by the Variable Annuity Account A Committee.
Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the
direction of the Variable Annuity Account A Committee.
Security Transactions
Security transactions are accounted for on the date the security is
purchased or sold (trade date). The cost of investments sold is
determined on the basis of specific identification.
Dividend income is accrued as of the ex-dividend date and interest
income, including amortization of discounts and premiums is recorded
daily.
Federal Income Taxes
The Variable Annuity Account A investment income is applied to increase
accumulation unit values. Under existing federal income tax rules,
Variable Annuity Account A investment income is not taxed to the extent
that it is applied to increase accumulation unit values. GWL&A reserves
the right to charge Variable Annuity Account A if such taxes are imposed
in the future.
Reserves For Annuities In Course of Payment
Net assets allocated to reserves for annuities in course of payment are
computed according to the 2000 Individual Annuitant Mortality Table. The
assumed investment return is 5 percent. The mortality risk is fully
borne by GWL&A and may result in additional amounts being transferred
into the variable annuity account by GWL&A to cover greater longevity of
annuitants than expected. Conversely, if amounts allocated exceed
amounts required, transfers may be made to GWL&A. At June 30, 2005,
Variable Annuity Account A recorded a receivable from GWL&A of $523,413
to cover greater longevity of annuitants than expected.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
GWL&A provides administrative services to Variable Annuity Account A and
has assumed mortality and expense risks of the contracts. Effective
November 1, 1996, GW Capital Management, LLC, doing business as Maxim
Capital Management, LLC, a wholly-owned subsidiary of GWL&A, serves as
investment adviser. A daily deduction of .0033052% (an effective annual
rate of 1.2064%) is made from the gross investment income of Variable
Annuity Account A. This deduction, expressed on an annual basis, is
broken down as follows: 0.2857% for administrative expenses, 0.3863% for
mortality risks, 0.0688% for expense risks, and 0.4656% for investment
management and advisory services.
Contract benefit payments are advanced by GWL&A to contract holders on
behalf of Variable Annuity Account A. Variable Annuity Account A
reimburses GWL&A for these payments periodically.
As of June 30, 2005, there were 35 funds for which the committee members
served as Directors, one of which is Variable Annuity Account A. The
total compensation paid to the independent directors with respect to all
funds for which they serve as Directors was $56,250 for the year ended
June 30, 2005. Certain officers of Variable Annuity Account A are also
directors and/or officers of GWL&A or its subsidiaries. No officer or
interested committee member of Variable Annuity Account A receives any
compensation directly from Variable Annuity Account A.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the year ended June 30, 2005, the aggregate cost of purchases and
proceeds from sales of investment securities (excluding all U.S.
Government securities and short-term securities) were $162,246 and
$233,161, respectively. For the year ended June 30, 2005, there were no
purchases or sales of long-term U.S. Government securities.
4. ACCUMULATION UNIT VALUES
VALUATION ACCUMULATION VALUATION ACCUMULATION
DATE UNIT VALUE DATE UNIT VALUE
---------------------- -------------------------- ----------------------- --------------------------
January 3, 1969 $ 1.00000000 March 31, 1972 $ 1.50937876
March 28, 1969 $ 1.07468400 June 30, 1972 $ 1.46441659
June 27, 1969 $ 1.07583259 September 29, 1972 $ 1.41141921
September 30, 1969 $ 1.04319336 December 31, 1972 $ 1.43641768
December 31, 1969 $ 1.05956294 March 30, 1973 $ 1.14518173
March 31, 1970 $ 1.05322327 June 29, 1973 $ .94975920
June 30, 1970 $ .86337212 September 28, 1973 $ 1.12752636
September 30, 1970 $ .98057690 December 31, 1973 $ .98798465
(Continued)
4. ACCUMULATION UNIT VALUES (Continued)
VALUATION ACCUMULATION VALUATION ACCUMULATION
DATE UNIT VALUE DATE UNIT VALUE
---------------------- -------------------------- ----------------------- --------------------------
December 31, 1970 $ 1.08416020 March 29, 1974 $ .92504974
March 31, 1971 $ 1.28783953 June 28, 1974 $ .84636772
June 30, 1971 $ 1.31417688 September 30, 1974 $ .69582357
September 30, 1971 $ 1.34600160 December 31, 1974 $ .76438983
December 31, 1971 $ 1.40624309 March 31, 1975 $ .85484991
June 30, 1975 $ .94523691 September 30, 1987 $ 3.58107036
September 30, 1975 $ .86720026 December 31, 1987 $ 2.90927633
December 31, 1975 $ .89703274 March 31, 1988 $ 3.03211290
March 31, 1976 $ 1.02654318 June 30, 1988 $ 3.14170371
June 30, 1976 $ 1.04254066 December 31, 1988 $ 3.24632490
September 30, 1976 $ 1.02175714 March 31, 1989 $ 3.40048089
December 31, 1976 $ 1.06312535 June 30, 1989 $ 3.66057985
March 31, 1977 $ .96668709 September 30, 1989 $ 4.03595925
June 30, 1977 $ .97779837 December 31, 1989 $ 4.16667314
September 30, 1977 $ .91543186 March 31, 1990 $ 4.10420565
December 31, 1977 $ .91330430 June 30, 1990 $ 4.40575331
March 31, 1978 $ .88025820 September 30, 1990 $ 3.95067300
June 30, 1978 $ .94981303 December 31, 1990 $ 4.09586804
September 30, 1978 $ 1.02175412 March 31, 1991 $ 4.67731834
December 31, 1978 $ .94566769 June 30, 1991 $ 4.46997251
March 31, 1979 $ 1.03700469 September 30, 1991 $ 4.70629835
June 30, 1979 $ 1.03384794 December 31, 1991 $ 5.17489662
September 30, 1979 $ 1.07966980 March 31, 1992 $ 5.00089395
December 31, 1979 $ 1.09861144 June 30, 1992 $ 4.90045709
March 31, 1980 $ 1.02778990 September 30, 1992 $ 4.94334533
June 30, 1980 $ 1.15888482 December 31, 1992 $ 5.39680799
September 30, 1980 $ 1.24125856 March 31, 1993 $ 5.70268053
December 31, 1980 $ 1.34937658 June 30, 1993 $ 5.91443136
March 31, 1981 $ 1.34420316 September 30, 1993 $ 6.20352631
June 30, 1981 $ 1.31151501 December 31, 1993 $ 6.24551098
September 30, 1981 $ 1.21957549 March 31, 1994 $ 6.07099873
December 31, 1981 $ 1.34034823 June 30, 1994 $ 5.98373289
March 31, 1982 $ 1.22060069 September 30, 1994 $ 6.21184797
June 30, 1982 $ 1.21747890 December 31, 1994 $ 6.07070336
September 30, 1982 $ 1.32107048 March 31, 1995 $ 6.43386353
December 31, 1982 $ 1.54829628 June 30, 1995 $ 6.93539739
March 31, 1983 $ 1.72492408 September 30, 1995 $ 7.34349110
June 30, 1983 $ 1.88999803 December 31, 1995 $ 7.50058268
September 30, 1983 $ 1.85391985 March 31, 1996 $ 7.97167430
December 31, 1983 $ 1.86959830 June 30, 1996 $ 8.16277408
March 31, 1984 $ 1.77987261 September 30, 1996 $ 8.36088935
June 30, 1984 $ 1.74123169 December 31, 1996 $ 8.76699327
September 30, 1984 $ 1.89436321 March 31, 1997 $ 9.10319430
December 31, 1984 $ 1.94021457 June 30, 1997 $ 9.87479147
March 31, 1985 $ 2.11639231 September 30, 1997 $ 10.11055595
June 30, 1985 $ 2.31593116 December 31, 1997 $ 10.66148379
September 30, 1985 $ 2.17502453 March 31, 1998 $ 10.99141808
December 31, 1985 $ 2.50415588 June 30, 1998 $ 11.46520474
March 31, 1986 $ 2.92575544 September 30, 1998 $ 9.63105524
June 30, 1986 $ 3.12894373 December 31, 1998 $ 11.95317612
(Continued)
4. ACCUMULATION UNIT VALUES (Continued)
VALUATION ACCUMULATION VALUATION ACCUMULATION
DATE UNIT VALUE DATE UNIT VALUE
---------------------- -------------------------- ----------------------- --------------------------
September 30, 1986 $ 2.79849885 March 31, 1999 $ 12.29221948
December 31, 1986 $ 2.92996949 June 30, 1999 $ 13.52815376
March 31, 1987 $ 3.45357315 September 30, 1999 $ 12.49689723
June 30, 1987 $ 3.47692861 December 31, 1999 $ 12.40218931
March 31, 2000 $ 12.53233074 December 31, 2002 $ 12.43353369
June 30, 2000 $ 12.24858685 March 31, 2003 $ 11.56298533
September 30, 2000 $ 13.38557109 June 30, 2003 $ 13.53742761
December 31, 2000 $ 14.31497677 September 30, 2003 $ 13.93933144
March 31, 2001 $ 13.73607754 December 31, 2003 $ 15.70708492
June 30, 2001 $ 14.31362550 March 31, 2004 $ 16.37585983
September 30, 2001 $ 12.85597815 June 30, 2004 $ 16.55182442
December 31, 2001 $ 13.99677835 September 30, 2004 $ 16.65007324
March 31, 2002 $ 15.05815490 December 31, 2004 $ 18.25560866
June 30, 2002 $ 14.19273347 March 31, 2005 $ 18.25491083
September 30, 2002 $ 11.81737430 June 30, 2005 $ 18.65808224
(Concluded)
5. SUBSEQUENT EVENT
An application has been filed with the SEC to terminate the registration
under the Investment Company Act of 1940. The termination was effective on
August 24, 2005. Upon approval of the termination of registration, the
assets will be invested in a registered open-end management investment
company, Vanguard Variable Insurance Fund Equity Income Portfolio.
Investment Advisory Contract Approval
The Great-West Variable Annuity Account A ("VAAA") Committee (the "Committee"),
including the Committee Members who are not interested persons of VAAA (the
"Independent Committee Members"), approved at a meeting held on April 27, 2005
(the "Meeting"), the continuation of the Investment Advisory Agreement between
VAAA and GW Capital Management, LLC ("GWCM").
Based on its review of the Advisory Agreement, the information described below,
and such considerations as the Committee deemed relevant, the Committee
concluded that the terms of the Agreement are fair and reasonable, and that the
advisory fee rates provided in the Agreement are fair and reasonable in relation
to the services rendered.
The Independent Committee Members met separately on March 30, 2005, with
independent legal counsel to review and evaluate in advance of the Meeting
information furnished by GWCM in connection with the proposed continuation of
the Agreement. In approving the Agreement, the Committee considered such
information as the Committee deemed reasonably necessary to evaluate the terms
of the Agreement. The Committee also noted that information regarding GWCM's
performance is provided to the Committee on an ongoing basis at regular meetings
of the Committee held throughout the year. Discussed below are the principal
factors considered by the Committee in approving the Agreement. This discussion
is not intended to be all-inclusive. In approving the Agreement, the Committee
did not identify any single factor as being determinative. Rather, the
Committee's approvals were based on each Committee Member's business judgment
after consideration of the information as a whole. Individual Committee Members
may have weighted certain factors differently and assigned varying degrees of
materiality to information considered by the Committee.
Under the terms of the Advisory Agreement, GWCM acts as investment adviser and,
subject to oversight by the Committee, directs the investments of VAAA in
accordance with its investment objective, policies and limitations. GWCM also
provides, subject to oversight by the Committee, the management and
administrative services necessary for the operation of VAAA.
Nature, Extent and Quality of Services. The Committee considered and concluded
that it was satisfied with the nature, extent, and quality of services provided
and to be provided by GWCM. In this regard, the Committee considered, among
other things, GWCM's personnel, experience, resources and track record, its
ability to provide or obtain such services as may be necessary in managing,
acquiring and disposing of investments on behalf of VAAA and performing research
and obtaining and evaluating the economic, statistical and financial data
relevant to the investment policies of VAAA. The Committee also considered
GWCM's reputation for management of the specific investment strategies for VAAA,
GWCM's overall financial condition, technical resources, compliance program and
operational capabilities. Consideration was given to the fact that at regular
meetings of the Committee held throughout the year, the Committee meets with
representatives of GWCM to discuss portfolio management strategies and
performance. The Committee also considered GWCM's practices regarding the
selection and compensation of brokers and dealers that execute portfolio
transactions for VAAA and procedures GWCM uses for obtaining best execution for
transactions in VAAA. Consideration was also given to the VAAA turnover rates in
relation to the quality of the services provided.
Investment Performance. The Committee considered and concluded that it was
generally satisfied with the investment performance of VAAA. The Committee
reviewed information regarding the investment performance, as compared against
various benchmarks and the performance of similar funds. The performance
information included the annualized returns for the one-, three-, five-, and
ten-year periods ended December 31, 2004, and risk-weighted performance
measures. The Committee noted VAAA performed relative to the short- and
long-term returns of its benchmarks and peer funds.
Costs and Profitability. The Committee considered the cost of services to be
provided and profits to be realized by GWCM and its affiliates from their
relationships with VAAA. The Committee concluded that the cost of services and
the profitability of GWCM were reasonable in relation to the nature, extent and
quality of the services rendered. With respect to the cost of services, the
Committee considered the structure and the level of the investment management
fee and other expenses payable by VAAA. In evaluating the management fee, the
Committee considered the fees payable by and the total expense ratios of similar
funds managed by other advisers. The Committee also considered the total expense
ratio of VAAA in comparison to the median expense ratio for all funds within the
same Morningstar fund category as VAAA. Based on the information provided, the
Committee concluded that the total expenses of VAAA (including the management
fee) were within the range of fees paid by similar funds, and that VAAA's
expense ratio was near or below the median expense ratio for the applicable
Morningstar fund category.
The Committee considered the overall financial soundness of GWCM and the profits
to be realized by GWCM and its affiliates. The Committee requested and reviewed
the financial statements of and profitability information from GWCM. In
evaluating the information provided by GWCM, the Committee noted that there are
limitations inherent in allocating costs and calculating profitability for an
organization such as GWCM, and that it is difficult to make comparisons of
profitability among advisers because comparative information is not generally
available to the public and, when available, is qualified by various assumptions
and other factors.
Economies of Scale. The Committee considered the extent to which economies of
scale may be realized by VAAA. In evaluating economies of scale, the Committee
considered, among other things, the current level of management, the
profitability and financial condition of GWCM, and the current level of VAAA
assets. The Committee concluded that as the assets in VAAA are dwindling, no
economies of scale could be identified and that no changes were currently
necessary to reflect economies of scale.
Other Factors. The Committee also considered ancillary benefits derived or to be
derived by GWCM from its relationship with VAAA as part of the total mix of
information evaluated by the Committee. The Committee also noted where services
were provided to VAAA by an affiliate of GWCM, and took into account the fact
that VAAA is used as a funding vehicle under a variable annuity contract offered
by an insurance company affiliated with GWCM.
Annual Meeting of VAAA Participants
The annual meeting of VAAA Participants was held April 18, 2005, at which the
following matters were submitted for consideration by the Participants:
1. To approve the filing of an application with the U.S. Securities and
Exchange Commission to terminate the registration of VAAA and cease to
be a registered investment company.
176,108.384 units voted FOR the proposal
3,212.444 units voted AGAINST the proposal
3,942.805 units ABSTAINED
2. To elect members of the VAAA Committee to serve until their successors
are elected and qualified. Committee members presented for Participant
consideration were:
Units Voted FOR Units voted to
WITHHOLD AUTHORITY
M.T.G. Graye 178,988,356 4,275.177
R.P. Koeppe 178,988,356 4,275.177
R. Jennings 178,988,356 4,275.177
W.T. McCallum 178,988,356 4,275.177
S. Zisman 178,988,356 4,275.177
3. To ratify or reject the selection of Deloitte & Touche LLP as
independent auditors for VAAA for the fiscal year ending December 31,
2005.
179,320.828 units voted FOR
-0- units voted AGAINST
3,942.805 units ABSTAINED
ITEM 2. CODE OF ETHICS
Not Required in Filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not Required in Filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not Required in Filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not Required in Filing.
ITEM 6. SCHEDULE OF INVESTMENTS
The schedule is included as part of the report to shareholders filed under Item
1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not Applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not Applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedure by which shareholders may
recommend nominees to the registrant's board of directors.
ITEM 11. CONTROLS AND PROCEDURES
(a) The registrant's principal executive officer and principal financial officer
have concluded, based upon their evaluation of the registrant's disclosure
controls and procedures as conducted within 90 days of the filing date of this
report, that these disclosure controls and procedures provide reasonable
assurance that material information required to be disclosed by the registrant
in the report it files or submits on Form N-CSR is recorded, processed,
summarized and reported, within the time periods specified in the commission's
rules and forms and that such material information is accumulated and
Communicated to the registrant's management, including its principal executive
officer and principal financial officer, as appropriate, in order to allow
timely decisions regarding required disclosure.
(b) The registrant's principal executive officer and principal financial officer
are aware of no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS
(a) (1) Not Required in Filing.
(2) A separate certification for each principal executive and principal
financial officer as required by Rule 30a-2(a) under the Investment Company Act
of 1940 is attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
By:
/s/ W.T. McCallum
W. T. McCallum
President
Date: August 24, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:
/s/ W.T. McCallum
W. T. McCallum
President
Date: August 24, 2005
By:
/s/ G.R. McDonald
G. R. McDonald
Treasurer
Date: August 24, 2005