Registration No. 333-67876
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Post-Effective Amendment No. 2 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
13-5570651
(I.R.S. Employer Identification No.)
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(212) 554-1234
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
ROBIN WAGNER
VICE PRESIDENT AND COUNSEL
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(212) 554-1234
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Please send copies of all communications to:
PETER E. PANARITES
FOLEY & LARDNER
WASHINGTON HARBOUR
3000 K STREET, N.W.
WASHINGTON, D.C. 20007
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Equitable Accumulator(R)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectuses for each Trust, which contain important information about their
portfolios.
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WHAT IS THE EQUITABLE ACCUMULATOR(R)?
Equitable Accumulator(R) is a deferred annuity contract issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the accumulation of
retirement savings and for income. The contract offers income and death benefit
protection. It also offers a number of payout options. You invest to accumulate
value on a tax-deferred basis in one or more of our variable investment options,
the guaranteed interest option, fixed maturity options, or the account for
special dollar cost averaging ("investment options"). This contract may not
currently be available in all states. Certain features and benefits described in
this prospectus may vary in your state; all features and benefits may not be
available in all states.
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Variable investment options
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o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core Equity* o EQ/Capital Guardian International*
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Value* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Small/Mid Cap Growth* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap Value* o EQ/Equity 500 Index
o AXA Premier VIP Technology* o EQ/Evergreen Omega
o EQ/Aggressive Stock o EQ/FI Mid Cap
o EQ/Alliance Common Stock o EQ/FI Small/Mid Cap Value
o EQ/Alliance Global o EQ/High Yield(1)
o EQ/Alliance Growth and Income o EQ/International Equity Index
o EQ/Alliance Growth Investors o EQ/J.P. Morgan Core Bond
o EQ/Alliance Intermediate Government o EQ/Janus Large Cap Growth
Securities* o EQ/Lazard Small Cap Value
o EQ/Alliance International o EQ/Marsico Focus*
o EQ/Alliance Money Market o EQ/Mercury Basic Value Equity
o EQ/Alliance Premier Growth o EQ/MFS Emerging Growth Companies
o EQ/Alliance Quality Bond o EQ/MFS Investors Trust
o EQ/Alliance Small Cap Growth o EQ/MFS Research
o EQ/Alliance Technology o EQ/Putnam Growth & Income Value
o EQ/AXP New Dimensions** o EQ/Putnam International Equity
o EQ/AXP Strategy Aggressive** o EQ/Putnam Voyager(2)
o EQ/Small Company Index
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"). Your
investment results in a variable investment option will depend on the investment
performance of the related portfolio.
GUARANTEED INTEREST OPTION. You may allocate amounts to the guaranteed interest
option. This option is part of our general account and pays interest at
guaranteed rates.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account pays fixed interest at
guaranteed rates.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA or Roth
IRA.
We offer two versions of the traditional IRA: "Rollover IRA" and "Flexible
Premium IRA." We also offer two versions of the Roth IRA: "Roth Conversion IRA"
and "Flexible Premium Roth IRA."
o An annuity that is an investment vehicle for a qualified defined
contribution plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $5,000 is required to purchase an NQ, Rollover IRA,
Roth Conversion IRA, QP, or Rollover TSA contract. For Flexible Premium IRA or
Flexible Premium Roth IRA contracts, we require a contribution of $2,000 to
purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
processing office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be obtained
from the SEC's Web site at http://www.sec.gov. The table of contents for the SAI
appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
X00281/Core New Series
2002 Portfolio
Contents of this prospectus
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EQUITABLE ACCUMULATOR(R)
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Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) at a glance -- key features 8
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FEE TABLE 11
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Examples 14
Condensed financial information 15
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1. CONTRACT FEATURES AND BENEFITS 16
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How you can purchase and contribute to your contract 16
Owner and annuitant requirements 20
How you can make your contributions 20
What are your investment options under the contract? 20
Allocating your contributions 25
Your benefit base 26
Annuity purchase factors 27
Our Living Benefit option 27
Guaranteed minimum death benefit 28
Your right to cancel within a certain number of days 29
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2. DETERMINING YOUR CONTRACT'S VALUE 30
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Your account value and cash value 30
Your contract's value in the variable investment options 30
Your contract's value in the guaranteed interest option 30
Your contract's value in the fixed maturity options 30
Your contract's value in the account for special dollar
cost averaging 30
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"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
WHEN WE USE THE WORD "CONTRACT" IT ALSO INCLUDES CERTIFICATES THAT ARE ISSUED
UNDER GROUP CONTRACTS IN SOME STATES.
2 Contents of this prospectus
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3. TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 31
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Transferring your account value 31
Disruptive transfer activity 31
Rebalancing your account value 31
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4. ACCESSING YOUR MONEY 33
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Withdrawing your account value 33
How withdrawals are taken from your account value 34
How withdrawals affect your guaranteed minimum income benefit
and guaranteed minimum death benefit 34
Loans under Rollover TSA contracts 34
Surrendering your contract to receive its cash value 35
When to expect payments 35
Your annuity payout options 35
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5. CHARGES AND EXPENSES 38
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Charges that Equitable Life deducts 38
Charges that the Trusts deduct 40
Group or sponsored arrangements 41
Other distribution arrangements 41
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6. PAYMENT OF DEATH BENEFIT 42
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Your beneficiary and payment of benefit 42
How death benefit payment is made 42
Beneficiary continuation option 43
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7. TAX INFORMATION 44
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Overview 44
Buying a contract to fund a retirement arrangement 44
Transfers among investment options 44
Taxation of nonqualified annuities 44
Special rules for contracts funding qualified plans 44
Individual retirement arrangements (IRAs) 46
Tax-Sheltered Annuity contracts (TSAs) 47
Federal and state income tax withholding and
information reporting 49
Impact of taxes to Equitable Life 50
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8. MORE INFORMATION 51
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About Separate Account No. 49 51
About the Trusts 51
About our fixed maturity options 51
About the general account 52
About other methods of payment 53
Dates and prices at which contract events occur 53
About your voting rights 54
About legal proceedings 54
About our independent accountants 54
Financial statements 54
Transfers of ownership, collateral assignments, loans
and borrowing 54
Distribution of the contracts 54
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9. INVESTMENT PERFORMANCE 56
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Communicating performance data 58
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10. INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE 59
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APPENDICES
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I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Enhanced death benefit example D-1
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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Contents of this prospectus 3
Index of key words and phrases
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This index should help you locate more information on the terms used in this
prospectus.
Page
account for special dollar cost averaging 25
account value 30
annuitant 16
annuity payout options 35
beneficiary 42
benefit base 26
business day 53
cash value 30
contract date 9
contract date anniversary 9
contract year 9
contributions to traditional IRAs 46
regular contributions 46
rollovers and transfers 47
disruptive transfer activity 31
EQAccess 6
ERISA 34
fixed maturity options 24
Flexible Premium IRA cover
Flexible Premium Roth IRA cover
guaranteed interest option 24
guaranteed minimum death benefit 28
guaranteed minimum income benefit 27
IRA cover
IRS 44
Page
investment options 20
Living Benefit 27
loan reserve account 35
market adjusted amount 24
market value adjustment 24
market timing 31
maturity value 24
NQ cover
participant 20
portfolio cover
processing office 6
QP cover
rate to maturity 24
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 46
SAI cover
SEC cover
TOPS 6
TSA 47
traditional IRA 46
Trusts cover
unit 30
variable investment options 20
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract.
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Prospectus Contract or Supplemental Materials
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fixed maturity options Guarantee Periods (Guaranteed Fixed
Interest Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
Living Benefit Guaranteed Minimum Income Benefit
Guaranteed Interest Option Guaranteed Interest Account
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4 Index of key words and phrases
Who is Equitable Life?
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). AXA, a French holding company for an
international group of insurance and related financial services companies, is
the sole shareholder of AXA Financial, Inc. As the sole shareholder, and under
its other arrangements with Equitable Life and Equitable Life's parent, AXA
exercises significant influence over the operations and capital structure of
Equitable Life and its parent. No company other than Equitable Life, however,
has any legal responsibility to pay amounts that Equitable Life owes under the
contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile service
may not be available at all times and/or we may be unavailable due to emergency
closing). In addition, the level and type of service available may be restricted
based on criteria established by us.
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FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
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Equitable Accumulator(R)
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
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Equitable Accumulator(R)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
REGULAR MAIL:
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Equitable Accumulator(R)
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
EXPRESS DELIVERY:
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Equitable Accumulator(R)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
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TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
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TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http:// www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
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CUSTOMER SERVICE REPRESENTATIVE:
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You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA or Flexible
Premium Roth IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners, all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) at a glance -- key features
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Professional investment Equitable Accumulator's(R) variable investment options invest in different portfolios managed by
management professional investment advisers.
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Fixed maturity options o Fixed maturity options ("FMOs") with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
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If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any value
that you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
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Guaranteed interest o Principal and interest guarantees.
option
o Interest rates set periodically.
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Account for special dollar Available for dollar cost averaging all or a portion of any eligible contribution to your contract.
cost averaging
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Tax advantages o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
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If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA) or Tax Sheltered
Annuity (TSA), or to fund an employer retirement plan (QP or Qualified Plan), you should be aware that
such annuities do not provide tax deferral benefits beyond those already provided by the Internal
Revenue Code. Before purchasing one of these annuities, you should consider whether its features and
benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative
features, benefits and costs of these annuities compared with any other investment that you may use in
connection with your retirement plan or arrangement. (For more information, see "Tax information,"
later in this Prospectus and in the SAI.)
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Living Benefit protection Living Benefit provides a guaranteed minimum income benefit. The guaranteed minimum income benefit
provides income protection for you while the annuitant lives.
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Contribution amounts o NQ, Rollover IRA, Roth Conversion IRA, QP and Rollover TSA contracts
o Initial minimum: $5,000
o Additional minimum: $500
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
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o Flexible Premium IRA and Flexible Premium Roth IRA contracts
o Initial minimum: $2,000
o Additional minimum: $50
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Maximum contribution limitations may apply.
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Access to your money o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract. You may
also incur income tax and a tax penalty.
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Payout options o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
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8 Equitable Accumulator(R) at a glance -- key features
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Additional features o Guaranteed minimum death benefit options
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing home
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
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Fees and charges o Daily charges on amounts invested in variable investment options for mortality and expense risks,
administrative charges and distribution charges at an annual rate of 1.20%.
o The charges for the guaranteed minimum death benefits range from 0.0% to 0.45%, annually, of the applicable
benefit base. The benefit base is described under "Your benefit base" in "Contract features and benefits"
later in this Prospectus.
o Annual 0.45% of the applicable benefit base charge for the optional Living Benefit until you exercise your
guaranteed minimum income benefit, elect another annuity payout or the contract date anniversary after the
annuitant reaches age 85, whichever occurs first.
o If your account value at the end of the contract year is less than $50,000, we deduct an annual
administrative charge equal to $30 or during the first two contract years 2% of your account value, if
less. If your account value, on the contract date anniversary, is $50,000 or more, we will not deduct the
charge.
o Annual 0.35% Protection Plus charge for this optional death benefit.
o No sales charge deducted at the time you make contributions. During the first seven contract years
following a contribution, a charge of up to 7% will be deducted from amounts that you withdraw that exceed
15% of your account value. We use the account value on the most recent contract date anniversary to
calculate the 15% amount available. There is no withdrawal charge in the eighth and later contract years
following a contribution. In addition, there is no withdrawal charge if the annuitant is age 86 or older
when the contract is issued. Certain other exemptions apply.
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The "contract date" is the effective date of a contract. This usually is the business day we receive the
properly completed and signed application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The end of each 12-month period
is your "contract date anniversary."
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o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium taxes
in your state. This charge is generally deducted from the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to purchase the Variable Immediate Annuity
payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net assets
invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses.
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Annuitant issue ages NQ: 0-90
Rollover IRA, Roth Conversion IRA, Flexible Premium Roth IRA and Rollover TSA: 20-90
Flexible Premium IRA: 20-70
QP: 20-75
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The above is not a complete description of all material provisions of the
contract. In some cases, restrictions or exceptions apply. Also, all features of
the contract are not necessarily available in your state or at certain ages.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
Equitable Accumulator(R) at a glance -- key features 9
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
10 Equitable Accumulator(R) at a glance -- key features
Fee table
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The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this prospectus.
The fixed maturity options, guaranteed interest option and the account for
special dollar cost averaging are not covered by the fee table and examples.
However, the annual administrative charge and the withdrawal charge do apply to
the fixed maturity options, guaranteed interest option and the account for
special dollar cost averaging. A market value adjustment (up or down) may apply
as a result of a withdrawal, transfer, or surrender of amounts from a fixed
maturity option.
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Charges we deduct from your variable investment options expressed as an
annual percentage of daily net assets
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Mortality and expense risks 0.75%
Administrative 0.25%
Distribution 0.20%
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Total annual expenses 1.20%
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Charges we deduct from your account value on each contract date anniversary
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Maximum annual administrative charge
If your account value on a contract date anniversary is less than
$50,000(1) $ 30
If your account value on a contract date anniversary is $50,000
or more $ 0
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Charges we deduct from your account value at the time you request certain transactions
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Withdrawal charge as a percentage of contributions withdrawn Contract
(deducted if you surrender your contract or make year
certain withdrawals. The withdrawal charge percentage we use 1......................... 7.00%
is determined by the contract year in which you make the 2......................... 7.00%
withdrawal or surrender your contract. For each contribution, 3......................... 6.00%
we consider the contract year in which we receive that 4......................... 6.00%
contribution to be "contract year 1.")(2) 5......................... 5.00%
6......................... 3.00%
7......................... 1.00%
8+........................ 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
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Charges we deduct from your account value each year if you elect the optional benefit
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GUARANTEED MINIMUM DEATH BENEFIT CHARGE (calculated as a percentage of the applicable benefit base. Deducted annually on each
contract date anniversary).
Standard death benefit 0.00%
Annual Ratchet to age 85 0.20% of the Annual Ratchet to age 85 benefit base
6% Roll-up to age 85 0.35% of the 6% roll-up to age 85 benefit base
Greater of 6% Roll-up to age 85 or Annual Ratchet to age 85 0.45% of the greater of the 6% roll-up to age 85
benefit base or the Annual Rachet to age 85
benefit base as applicable
- ------------------------------------------------------------------------------------------------------------------------------------
LIVING BENEFIT CHARGE (calculated as a percentage of the applicable
benefit base. Deducted annually on each contract date anniversary) 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
PROTECTION PLUS BENEFIT CHARGE (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary) 0.35%
- ------------------------------------------------------------------------------------------------------------------------------------
Fee table 11
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- ------------------------------------------------------------------------------------------------------------------------------------
Net
total annual
Management Fees Other expenses expenses (After
(After expense (After expense expense
Portfolio Name limitation)(3) 12b-1 Fees(4) limitation)(5) limitation)(6)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- ------------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is $30
for each contract year.
(2) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount and upon surrender of a contract.
(3) The management fees for each Portfolio cannot be increased without a vote of
that Portfolio's shareholders. See footnote (6) for any expense limitation
agreement information.
12 Fee table
(4) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Also, initial seed capital was invested for the
Portfolios of the AXA Premier VIP Trust on December 31, 2001, thus, "Other
Expenses" shown are estimated. See footnote (6) for any expense limitation
agreement information.
(6) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive or
limit its fees and assume other expenses of each of these Portfolios, if
necessary, in an amount that limits each Portfolio's total Annual Expenses
(exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each Portfolio may at a
later date make a reimbursement to Equitable Life for any of the management
fees waived or limited and other expenses assumed and paid by Equitable Life
pursuant to the expense limitation agreement provided that the Portfolio's
current annual operating expenses do not exceed the operating expense limit
determined for such Portfolio. For more information see the prospectus for
each Trust. The following chart indicates management fees and other expenses
before any fee waivers and/or expense reimbursements that would have applied
to each Portfolio. Portfolios that are not listed below do not have an
expense limitation arrangement in effect or the expense limitation
arrangement did not result in a fee waiver or reimbursement.
- --------------------------------------------------------------------------------
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- --------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- --------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- --------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- --------------------------------------------------------------------------------
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- --------------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- --------------------------------------------------------------------------------
Fee table 13
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who has
elected Living Benefit with the enhanced death benefit that provides for the
largest death benefit computed using the 6% Roll-up to age 85 or the Annual
Ratchet to age 85 and Protection Plus) would pay in the situations illustrated.
We assume that a $1,000 contribution is invested in one of the variable
investment options listed and a 5% annual return is earned on the assets in that
option.(1) The annual administrative charge is based on the charges that apply
to a mix of estimated contract sizes, resulting in an estimated administrative
charge for the purpose of these examples of $0.21 per $1,000.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods (as applicable) included in the
examples.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the example is not an
estimate or guarantee of future investment performance.
- ------------------------------------------------------------------------------------------------------------------------------------
If you surrender your contract at the end |If you surrender your contract at the end
of each period shown, the expenses | of each period shown, the expenses
would be: | would be:
------------------------------------------|------------------------------------------
1 year 3 years 5 years 10 years | 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
AXA Premier VIP Health Care $ 105.91 $ 187.86 $ 272.73 $ 473.56 | $ 35.91 $ 127.86 $ 222.73 $ 473.56
AXA Premier VIP International Equity $ 105.39 $ 186.33 $ 270.28 $ 469.12 | $ 35.39 $ 126.33 $ 220.28 $ 469.12
AXA Premier VIP Large Cap Core Equity $ 100.66 $ 172.53 $ 247.93 $ 428.07 | $ 30.66 $ 112.53 $ 197.93 $ 428.07
AXA Premier VIP Large Cap Growth $ 100.66 $ 172.53 $ 247.93 $ 428.07 | $ 30.66 $ 112.53 $ 197.93 $ 428.07
AXA Premier VIP Large Cap Value $ 100.66 $ 172.53 $ 247.93 $ 428.07 | $ 30.66 $ 112.53 $ 197.93 $ 428.07
AXA Premier VIP Small/Mid Cap Growth $ 103.29 $ 180.21 $ 260.40 $ 451.12 | $ 33.29 $ 120.21 $ 210.40 $ 451.12
AXA Premier VIP Small/Mid Cap Value $ 103.29 $ 180.21 $ 260.40 $ 451.12 | $ 33.29 $ 120.21 $ 210.40 $ 451.12
AXA Premier VIP Technology $ 105.91 $ 187.86 $ 272.73 $ 473.56 | $ 35.91 $ 127.86 $ 222.73 $ 473.56
EQ/Aggressive Stock $ 96.36 $ 159.84 $ 227.17 $ 388.94 | $ 26.36 $ 99.84 $ 177.17 $ 388.94
EQ/Alliance Common Stock $ 94.68 $ 154.85 $ 218.97 $ 373.21 | $ 24.68 $ 94.85 $ 168.97 $ 373.21
EQ/Alliance Global $ 98.04 $ 164.80 $ 235.32 $ 404.41 | $ 28.04 $ 104.80 $ 185.32 $ 404.41
EQ/Alliance Growth and Income $ 95.73 $ 157.97 $ 224.11 $ 383.07 | $ 25.73 $ 97.97 $ 174.11 $ 383.07
EQ/Alliance Growth Investors $ 95.73 $ 157.97 $ 224.11 $ 383.07 | $ 25.73 $ 97.97 $ 174.11 $ 383.07
EQ/Alliance Intermediate Government Securities $ 95.62 $ 157.66 $ 223.59 $ 382.09 | $ 25.62 $ 97.66 $ 173.59 $ 382.09
EQ/Alliance International $ 100.66 $ 172.53 $ 247.93 $ 428.07 | $ 30.66 $ 112.53 $ 197.93 $ 428.07
EQ/Alliance Money Market $ 93.31 $ 150.79 $ 212.27 $ 360.23 | $ 23.31 $ 90.79 $ 162.27 $ 360.23
EQ/Alliance Premier Growth $ 98.56 $ 166.35 $ 237.85 $ 409.19 | $ 28.56 $ 106.35 $ 187.85 $ 409.19
EQ/Alliance Quality Bond $ 95.41 $ 157.03 $ 222.57 $ 380.12 | $ 25.41 $ 97.03 $ 172.57 $ 380.12
EQ/Alliance Small Cap Growth $ 97.62 $ 163.56 $ 233.29 $ 400.57 | $ 27.62 $ 103.56 $ 183.29 $ 400.57
EQ/Alliance Technology $ 98.56 $ 166.35 $ 237.85 $ 409.19 | $ 28.56 $ 106.35 $ 187.85 $ 409.19
EQ/AXP New Dimensions $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/AXP Strategy Aggressive $ 96.99 $ 161.70 $ 230.23 $ 394.77 | $ 26.99 $ 101.70 $ 180.23 $ 394.77
EQ/Balanced $ 95.94 $ 158.59 $ 225.13 $ 385.03 | $ 25.94 $ 98.59 $ 175.13 $ 385.03
EQ/Bernstein Diversified Value $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/Calvert Socially Responsible $ 97.51 $ 163.25 $ 232.78 $ 399.60 | $ 27.51 $ 103.25 $ 182.78 $ 399.60
EQ/Capital Guardian International $ 99.09 $ 167.90 $ 240.38 $ 413.95 | $ 29.09 $ 107.90 $ 190.38 $ 413.95
EQ/Capital Guardian Research $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/Capital Guardian U.S. Equity $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/Emerging Markets Equity $ 105.39 $ 186.33 $ 270.28 $ 469.12 | $ 35.39 $ 126.33 $ 220.28 $ 469.12
EQ/Equity 500 Index $ 92.37 $ 147.97 $ 207.61 $ 351.15 | $ 22.37 $ 87.97 $ 157.61 $ 351.15
EQ/Evergreen Omega $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/FI Mid Cap $ 96.99 $ 161.70 $ 230.23 $ 394.77 | $ 26.99 $ 101.70 $ 180.23 $ 394.77
EQ/FI Small/Mid Cap Value $ 98.04 $ 164.80 $ 235.32 $ 404.41 | $ 28.04 $ 104.80 $ 185.32 $ 404.41
EQ/High Yield $ 96.15 $ 159.21 $ 226.15 $ 386.99 | $ 26.15 $ 99.21 $ 176.15 $ 386.99
EQ/International Equity Index $ 98.04 $ 164.80 $ 235.32 $ 404.41 | $ 28.04 $ 104.80 $ 185.32 $ 404.41
EQ/J.P. Morgan Core Bond $ 94.89 $ 155.48 $ 220.00 $ 375.19 | $ 24.89 $ 95.48 $ 170.00 $ 375.19
EQ/Janus Large Cap Growth $ 98.56 $ 166.35 $ 237.85 $ 409.19 | $ 28.56 $ 106.35 $ 187.85 $ 409.19
EQ/Lazard Small Cap Value $ 98.04 $ 164.80 $ 235.32 $ 404.41 | $ 28.04 $ 104.80 $ 185.32 $ 404.41
EQ/Marsico Focus $ 98.56 $ 166.35 $ 237.85 $ 409.19 | $ 28.56 $ 106.35 $ 187.85 $ 409.19
EQ/Mercury Basic Value Equity $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/MFS Emerging Growth Companies $ 96.67 $ 160.77 $ 228.70 $ 391.86 | $ 26.67 $ 100.77 $ 178.70 $ 391.86
EQ/MFS Investors Trust $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/MFS Research $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/Putnam Growth & Income Value $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
EQ/Putnam International Equity $ 99.61 $ 169.44 $ 242.90 $ 418.68 | $ 29.61 $ 109.44 $ 192.90 $ 418.68
EQ/Putnam Voyager $ 96.46 $ 160.15 $ 227.68 $ 389.91 | $ 26.46 $ 100.15 $ 177.68 $ 389.91
- ------------------------------------------------------------------------------------------------------------------------------------
14 Fee table
- ------------------------------------------------------------------------------------------------------------------------------------
If you surrender your contract at the end | If you do not surrender your contract at
of each period shown, the expenses |the end of each period shown, the expenses
would be: | would be:
------------------------------------------|------------------------------------------
1 year 3 years 5 years 10 years | 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index $ 95.41 $ 157.03 $ 222.57 $ 380.12 | $ 25.41 $ 97.03 $ 172.57 $ 380.12
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The amount accumulated from the $1,000 contribution could not be paid in the
form of an annuity payout option at the end of any of the periods shown in
the examples. This is because if the amount applied to purchase an annuity
payout option is less than $2,000, or the initial payment is less than $20,
we may pay the amount to you in a single sum instead of payments under an
annuity payout option. See "Accessing your money" later in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $5.44 based on the average amount applied to annuity payout options
in 2001. See "Annuity administrative fee" in "Charges and expenses" later in
this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
Fee table 15
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount for each type of
contract purchased. The following table summarizes our rules regarding
contributions to your contract. All ages in the table refer to the age of the
annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions
- ------------------------------------------------------------------------------------------------------------------------------------
NQ
0 through 90 o $5,000 (initial) o After-tax money. o For annuitants up to age 83
at contract issue,
0 through 85 in New York o $500 (additional) o Paid to us by check or additional contributions may
and Pennsylvania transfer of contract value in be made up to age 84.
a tax-deferred exchange
under Section 1035 of the o For annuitants age 84 and
Internal Revenue Code. older at contract issue
additional contributions may
be made up to one year
beyond the annuitant's issue
age.
-----------------------------------------------------------------------------------------------------------------------------------
Rollover IRA
20 through 90 o $5,000 (initial) o Eligible rollover distribu- o For annuitants up to age 83
tions from TSA contracts or at contract issue, additional
20 through 85 in New York o $500 (additional) other 403(b) arrangements, contributions may be made
and Pennsylvania qualified plans, and govern- up to age 84.
mental EDC plans.
o For annuitants age 84 and
o Rollovers from another older at contract issue addi-
traditional individual tional contributions may be
retirement arrangement. made up to one year beyond
your issue age.
o Direct custodian-to-
custodian transfers from o Contributions after age
another traditional indi- 70-1/2 must be net of
vidual retirement required minimum distribu-
arrangement. tions.
o Regular IRA contributions. o Although we accept regular
IRA contributions (limited to
o For the calendar year 2002 $3,000 for the calendar year
and later, additional "catch- 2002) under rollover IRA
up" contributions. contracts, we intend that
this contract be used prima-
rily for rollover and direct
transfer contributions.
o Additional catch-up contri-
butions totalling up to $500
can be made for the calendar
year 2002 where the owner is
at least age 50 but under age
70-1/2 at any time during
2002.
- ------------------------------------------------------------------------------------------------------------------------------------
16 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 90 $5,000 (initial) o Rollovers from another o For annuitants up to age 83
IRA Roth IRA. at contract issue, additional
20 through 85 in New York $500 (additional) contributions may be made up
and Pennsylvania o Conversion rollovers from to age 84.
a tradtional IRA.
o For annuitants age 84 and
o Direct transfers from older at contract issue addi-
another Roth IRA. tional contributions may be
made up to one year beyond
o Regular Roth IRA your issue age.
contributions.
o Conversion rollovers after
o For the calendar year 2002 age 70-1/2 must be net of
and later, additional required minimum distribu-
catch-up contributions. tions for the traditional IRA
you are rolling over.
o You cannot roll over funds
from a traditional IRA if
your adjusted gross income is
$100,000 or more.
o Although we accept regular
Roth IRA contributions (lim-
ited to $3,000 for the
calendar year 2002) under
Roth IRA contracts, we intend
that this contract be used
primarily for rollover and
direct transfer
contributions.
o Additional catch-up contri-
butions totalling up to $500
can be made for the calendar
year 2002 where the owner is
at least age 50 at any time
during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA
20 through 90 $5,000 (initial) o Direct transfers of pre-tax o For annuitants up to age 83
funds from another contract at contract issue, additional
20 through 85 in New York $500 (additional) or arrangement under Sec- contributions may be made
and Pennsylvania tion 403(b) of the Internal up to age 84.
Revenue Code, complying with
IRS Revenue Ruling 90-24. o For annuitants age 84 and
older at contract issue addi-
o Eligible rollover distribu- tional contributions may be
tions of pre-tax funds from made up to one year beyond
other 403(b) plans, quali- your issue age.
fied plans, governmental
EDC plans and traditional o Rollover or direct transfer
IRAs. contributions after age
70-1/2 must be net of any
required minimum distribu-
tions.
o Employer-remitted contribu-
This contract may not be available in your state. tions are not permitted.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 17
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions
- ------------------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 $5,000 (initial) o Only transfer contributions o Regular ongoing payroll
$500 (additional) from an existing defined contributions are not
contribution qualified plan permitted.
trust as a change of invest-
ment vehicle under the o Only one additional transfer
plan. contribution may be made
during a contract year.
o The plan must be qualified
under Section 401(a) of the o No additional transfer con-
Internal Revenue Code. tributions after age 76.
o For 401(k) plans, trans- o Contributions after age
ferred contributions may 70-1/2 must be net of any
See Appendix II at the end of this Prospectus for a only include employee pre- required minimum
discussion of purchase considerations of QP contracts. tax contributions. distributions.
- ------------------------------------------------------------------------------------------------------------------------------------
Flexible 20 through 70 o $2,000 (initial) o Regular traditional IRA o No regular IRA contributions
Premium contributions. in the calendar year you
IRA o $50 (additional turn age 70-1/2 and
after the first o For the calendar year 2002 thereafter.
contract year) and later, additional
catch-up contributions. o Total regular contributions
may not exceed $3,000 for
o Eligible rollover distribu- the calendar year 2002.
tions from TSA contracts or
other 403(b) arrangements, o Rollover and direct transfer
qualified plans, and govern- contributions after age
mental EDC plans. 70-1/2 must be net of
required minimum distribu-
o Rollovers from another tions.
traditional individual
retirement arrangement. o Although we accept rollover
and direct transfer contri-
o Direct custodian-to- butions under the Flexible
custodian transfers from Premium IRA contract, we
another traditional indi- intend that this contract be
vidual retirement used for ongoing regular
arrangement. contributions.
o Additional catch-up contri-
butions totalling up to $500
can be made for the calen-
dar year 2002 where the
owner is at least age 50 but
under age 70-1/2 at any time
during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions
- ------------------------------------------------------------------------------------------------------------------------------------
Flexible 20 through 90 o $2,000 (initial) o Regular after-tax o For annuitants up to age 83
Premium contributions. at contract issue, additional
Roth IRA 20 through 85 in New York o $50 (additional contributions may be made up
and Pennsylvania after the first o For the calendar year 2002 to age 84.
contract year) and later, additional
catch-up contributions. o For annuitants age 84 and
older at contract issue addi-
o Rollovers from another tional contributions may be
Roth IRA. made up to one year beyond
your issue age.
o Conversion rollovers
from a traditional IRA. o Total regular contributions
may not exceed $3,000 for
o Direct transfers from the calendar year 2002.
another Roth IRA.
o Contributions are subject to
income limits and other tax
rules.
o Although we accept rollover
and direct transfer
contributions under the
Flexible Premium Roth IRA
contract, we intend that this
contract be used for ongoing
regular Roth IRA
contributions.
o Additional catch-up contri-
butions totalling up to $500
can be made for the calendar
year 2002 where the owner is
at least age 50 at any time
during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) contracts with the same
annuitant would then total more than $1,500,000. We reserve the right to limit
aggregate contributions made after the first contract year to 150% of first-year
contributions. We may also refuse to accept any contribution if the sum of all
contributions under all Equitable Life annuity accumulation contracts that you
own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later in
this Prospectus.
Contract features and benefits 19
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant. This
option may not be available under your contract.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
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A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
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HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer. We
do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
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Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
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WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the guaranteed
interest option, the fixed maturity options and the account for special dollar
cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
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You can choose from among the variable investment options, the guaranteed
interest option and the fixed maturity options.
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20 Contract features and benefits
PORTFOLIOS OF THE TRUSTS
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
contract. These portfolios may even have the same manager(s) and/or a similar
name. However, there are numerous factors that can contribute to differences in
performance between two investments, particularly over short periods of time.
Such factors include the timing of stock purchases and sales; differences in
fund cash flows; and specific strategies employed by the portfolio manager.
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AXA PREMIER VIP TRUST:
Portfolio Name Objective Adviser(s)
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AXA Premier VIP Core Bond* Seeks a balance of a high current income and BlackRock Advisors, Inc.
capital appreciation consistent with a prudent Pacific Investment Management Company LLC
level of risk
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AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
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AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and Management Unit
Bank of Ireland Asset Management (U.S.) Limited
OppenheimerFunds, Inc.
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AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P., through its
Core Equity* Bernstein Investment Research and Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
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AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
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AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Value* Institutional Capital Corporation
MFS Investment Management
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AXA Premier VIP Small/Mid Long-term growth of capital Alliance Capital Management L.P.
Cap Growth* MFS Investment Management
RS Investment Management, L.P.
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AXA Premier VIP Small/Mid Long-term growth of capital AXA Rosenberg Investment Management LLC
Cap Value* The Boston Company Asset Management LLC
TCW Investment Management Company
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AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
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EQ ADVISORS TRUST:
Portfolio Name Objective Adviser(s)
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EQ/Aggressive Stock Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
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EQ/Alliance Common Stock Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
and increased income.
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EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
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Contract features and benefits 21
PORTFOLIOS OF THE TRUSTS (CONTINUED)
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Portfolio Name Objective Adviser(s)
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EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P.
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EQ/Alliance Growth Investors Seeks to achieve the highest total return con- Alliance Capital Management L.P.
sistent with the Adviser's determination of
reasonable risk
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EQ/Alliance Intermediate Seeks to achieve high current income consistent Alliance Capital Management L.P.
Government Securities* with relative stability of principal
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EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P.
(including through its Bernstein Investment
Research and Management Unit)
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EQ/Alliance Money Market Seeks to obtain a high level of current income, Alliance Capital Management L.P.
preserve its assets and maintain liquidity
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EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P.
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EQ/Alliance Quality Bond Seeks to achieve high current income consistent Alliance Capital Management L.P.
with moderate risk of capital
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EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
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EQ/Alliance Technology Seeks to achieve growth of capital. Current Alliance Capital Management L.P.
income is incidental to the Portfolio's
objective
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EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
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EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
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EQ/Balanced Seeks to achieve a high return through both Alliance Capital Management L.P.
appreciation of capital and current income Capital Guardian Trust Company
Jennison Associates, LLC
Prudential Investments LLC
Mercury Advisors
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EQ/Bernstein Diversified Seeks capital appreciation Alliance Capital Management L.P., through its
Value Bernstein Investment Research and Management Unit
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EQ/Calvert Socially Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Responsible* Brown Capital Management, Inc.
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EQ/Capital Guardian Seeks long-term growth of capital Capital Guardian Trust Company
International
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EQ/Capital Guardian Seeks long-term growth of capital Capital Guardian Trust Company
Research
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EQ/Capital Guardian U.S. Seeks long-term growth of capital Capital Guardian Trust Company
Equity
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EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
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EQ/Equity 500 Index Seeks a total return before expenses that Alliance Capital Management L.P.
approximates the total return performance of
the S&P 500 Index, including reinvestment of
dividends, at a risk level consistent with
that of the S&P 500 Index
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EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management Company, LLC
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EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
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EQ/FI Small/Mid Seeks long-term capital appreciation Fidelity Management & Research Company
Cap Value
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EQ/High Yield Seeks to achieve a high total return through a Alliance Capital Management L.P.
combination of current income and capital
appreciation
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22 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
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Portfolio Name Objective Adviser(s)
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EQ/International Equity Index Seeks to replicate as closely as possible Deutsche Asset Management Inc.
(before deduction of Portfolio expenses) the
total return of the MSCI EAFE Index
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EQ/J.P. Morgan Core Bond Seeks to provide a high total return con- J.P. Morgan Investment Management, Inc.
sistent with moderate risk of capital and
maintenance of liquidity
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EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
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EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
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EQ/Marsico Focus* Seeks to achieve long-term growth of capital Marsico Capital Management, LLC
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EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, Mercury Advisors
income
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EQ/MFS Emerging Growth Seeks to provide long-term capital growth MFS Investment Management
Companies
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EQ/MFS Investors Trust Seeks long-term growth of capital with a MFS Investment Management
secondary objective to seek reasonable current
income
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EQ/MFS Research Seeks to provide long-term growth of capital MFS Investment Management
and future income
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EQ/Putnam Growth & Income Seeks capital growth. Current income is a Putnam Investment Management, LLC
Value secondary objective
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EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
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EQ/Putnam Voyager Seeks long-term growth of capital and any Putnam Investment Management, LLC
increased income that results from this growth
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EQ/Small Company Index Seeks to replicate as closely as possible Deutsche Asset Management Inc.
(before deduction of Portfolio expenses) the
total return of the Russell 2000 Index
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* Subject to state availability.
Other important information about the portfolios is included in the prospectuses
for each Trust attached at the end of this Prospectus.
Contract features and benefits 23
GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays interest
at guaranteed rates. We discuss our general account under "More information"
later in this Prospectus.
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period.
Therefore, different interest rates may apply to different amounts in the
guaranteed interest option.
We credit interest daily to amounts in the guaranteed interest option. There are
three levels of interest in effect at the same time in the guaranteed interest
option:
(1) the minimum interest rate guaranteed over the life of the contract,
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
We set current interest rates periodically, according to our procedures that we
have in effect at the time. We reserve the right to change these procedures. All
interest rates are effective annual rates, but before deduction of annual
administrative charges or any withdrawal charges.
The minimum yearly guaranteed interest rate is 3% for 2002. The yearly rates we
set will never be less than the minimum guaranteed interest rate of 3% for the
life of the contract. Current interest rates will never be less than the yearly
guaranteed interest rate.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options, however, you may not have more than 12 different maturities
running during any contract year. These amounts become part of a non-unitized
separate account. They will accumulate interest at the "rate to maturity" for
each fixed maturity option. The total amount you allocate to and accumulate in
each fixed maturity option is called the "fixed maturity amount." The fixed
maturity options are not available in all states. Check with your financial
professional to see if fixed maturity options are available in your state.
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Fixed maturity options generally range from one to ten years to maturity.
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The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals or
transfers from a fixed maturity option before the maturity date, we will make a
"market value adjustment" that may increase or decrease any fixed maturity
amount you have left in that fixed maturity option. We discuss the market value
adjustment below and in greater detail later in this prospectus in "More
information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We offer fixed maturity options with
maturity dates ranging from one to ten years. Not all of these fixed maturity
options will be available for annuitant ages 76 and older. See "Allocating your
contributions" below.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied the rate to maturity is 3% or less.
Each new contribution is applied to a new fixed maturity option. When you apply
for an Accumulator(R) contract, a 60-day rate lock-in will apply from the date
the application is signed. Any contributions received and designated for a fixed
maturity option during this period will receive the then current maturity option
rate or the rate that was in effect on the date that the application was signed,
whichever is greater. There is no rate lock available for transfers from the
variable investment options or the guaranteed interest option into a fixed
maturity option, from one fixed maturity option to another or for subsequent
contributions to the contract.
YOUR CHOICES AT THE MATURITY DATE. We will notify you between 15 and 45 days
before each of your fixed maturity options is scheduled to mature. At that time,
you may choose to have one of the following take place on the maturity date, as
long as none of the conditions listed in "Allocating your contributions," below
would apply:
(a) transfer the maturity value into another available fixed maturity option,
any of the variable investment options or the guaranteed interest option;
or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
shortest available maturity option beginning on that date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract, or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate in effect at that time for new fixed maturity
options (adjusted to reflect a similar maturity date), and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it
24 Contract features and benefits
is possible that the market value adjustment could greatly reduce your value in
the fixed maturity options, particularly in the fixed maturity options with
later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general account. We
pay interest at guaranteed rates in this account. We will credit interest to the
amounts that you have in the account for special dollar cost averaging every
day. We set the interest rates periodically, according to procedures that we
have. We reserve the right to change these procedures.
We guarantee to pay our current interest rate that is in effect on the date that
your contribution is allocated to this account. Your guaranteed interest rate
for the time period you select will be shown in your contract for an initial
contribution. The rate will never be less than 3%. See "Allocating your
contributions" below for rules and restrictions that apply to the special dollar
cost averaging program.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options, the guaranteed interest option and fixed maturity options.
Allocations must be in whole percentages and you may change your allocations at
any time. However, the total of your allocations must equal 100%. If the
annuitant is age 76 or older, you may allocate contributions to fixed maturity
options if their maturities are five years or less. Also, you may not allocate
amounts to fixed maturity options with maturity dates that are later than the
date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify the
portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options and the guaranteed interest
option however you choose.
For example, if your initial contribution is $10,000, and on February 15, 2002
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $5,802.87 to that fixed maturity option and the balance to your choice
of the variable investment options and the guaranteed interest option. On the
maturity date your value in the fixed maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA,
Flexible Premium IRA, QP or Rollover TSA contract, before you select a maturity
year that would extend beyond the year in which you will reach age 70-1/2, you
should consider whether your value in the variable investment options and the
guaranteed interest option, or your other traditional IRA or TSA funds are
sufficient to meet your required minimum distributions. See "Tax information"
later in this Prospectus and in the SAI.
Please check with your financial professional to see if the principal assurance
allocation feature is available in your state. Also, you may not elect principal
assurance if the special dollar cost averaging program is in effect.
DOLLAR COST AVERAGING
We offer three dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually allocate amounts to the
variable investment options by periodically transferring approximately the same
dollar amount to the variable investment options you select. This will cause you
to purchase more units if the unit value is low and fewer units if the unit
value is high. Therefore, you may get a lower average cost per unit over the
long term. These plans of investing, however, do not guarantee that you will
earn a profit or be protected against losses. You may not make transfers to the
fixed maturity options.
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Units measure your value in each variable investment option.
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SPECIAL DOLLAR COST AVERAGING PROGRAM. Subject to state availability, under the
special dollar cost averaging program, you may choose to allocate all or a
portion of any eligible contribution to the account for special dollar cost
averaging. You may elect to participate in the special dollar cost averaging
program at any time subject to the age limitation on contributions described in
Section 1 of this prospectus. Contributions into the account for special dollar
cost averaging may not be transfers from other investment options. Your initial
allocation to any special dollar cost averaging program time period must be at
least $2,000 and any subsequent contribution to that same time period must be at
least $250. You may only have one time period in effect at any time and once you
select a time period, you may not change it. In Pennsylvania, we refer to this
program as "enhanced rate dollar cost averaging."
You may have your account value transferred to any of the variable investment
options. We will transfer amounts from the account for special dollar cost
averaging into the variable investment options over an available time period
that you select. We offer time periods of 3, 6 or 12 months, during which you
will receive an enhanced interest rate. We may also offer other time periods.
Your financial professional can provide information on the time periods and
interest rates currently available in your state, or you may contact our
processing office. If the
Contract features and benefits 25
special dollar cost averaging program is selected at the time of application to
purchase the Accumulator(R) contract, a 60 day rate lock will apply from the
date of application. Any contribution(s) received during this 60 day period will
be credited with the interest rate offered on the date of application for the
remainder of the time period selected at application. Any contribution(s)
received after the 60 day rate lock period has ended will be credited with the
then current interest rate for the remainder of the time period selected at
application. Contribution(s) made to a special dollar cost averaging program
selected after the Accumulator(R) contract has been issued will be credited with
the then current interest rate on the date the contribution is received by
Equitable for the time period initially selected by you. Once the time period
you selected has run, you may then select another time period for future
contributions. At that time, you may also select a different allocation for
transfers to the variable investment options, or, if you wish, we will continue
to use the selection that you have previously made. Currently, your account
value will be transferred from the account for special dollar cost averaging
into the variable investment options on a monthly basis. We may offer this
program in the future with transfers on a different basis.
We will transfer all amounts out of the account for special dollar cost
averaging by the end of the chosen time period. The transfer date will be the
same day of the month as the contract date, but not later than the 28th day of
the month. For a special dollar cost averaging program selected after
application, the first transfer date and each subsequent transfer date for the
time period selected will be one month from the date the first contribution is
made into the special dollar cost averaging program, but not later than the 28th
of the month.
If you choose to allocate only a portion of an eligible contribution to the
account for special dollar cost averaging, the remaining balance of that
contribution will be allocated to the variable investment options, guaranteed
interest option or fixed maturity options according to your instructions.
The only amounts that should be transferred from the account for special dollar
cost averaging are your regularly scheduled transfers to the variable investment
options. No amounts may be transferred from the account for special dollar cost
averaging to the guaranteed interest option or the fixed maturity options. If
you request to transfer or withdraw any other amounts from the account for
special dollar averaging, we will transfer all of the value that you have
remaining in the account for special dollar cost averaging to the investment
options according to the allocation percentages we have on file for you. You may
ask us to cancel your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that option
to the other variable investment options and the guaranteed interest option. You
can select to have transfers made on a monthly, quarterly or annual basis. The
transfer date will be the same calendar day of the month as the contract date,
but not later than the 28th day of the month. You can also specify the number of
transfers or instruct us to continue making the transfers until all amounts in
the EQ/Alliance Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers scheduled
to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
FIXED-DOLLAR OPTION. Under this option you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the variable
investment options of your choice. Transfers may be made on a monthly, quarterly
or annual basis. You can specify the number of transfers or instruct us to
continue to make transfers until all available amounts in the guaranteed
interest option have been transferred out.
In order to elect the fixed-dollar option, you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at our
processing office. Transfers may be made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
contract date but not later than the 28th day of the month. The minimum transfer
amount is $50. Unlike the account for special dollar cost averaging, this option
does not offer enhanced rates. Also, the option is subject to the guaranteed
interest option transfer limitations described under "Transferring your account
value" in "Transferring your money among investment options" later in this
Prospectus. While the program is running, any transfer that exceeds those
limitations will cause the program to end for that contract year. You will be
notified. You must send in a request form to resume the program in the next or
subsequent contract years.
If, on any transfer date, your value in the guaranteed interest option is equal
to or less than the amount you have elected to have transferred, the entire
amount will be transferred, and the program will end. You may change the
transfer amount once each contract year or cancel this program at any time.
----------------------------------
You may not elect general dollar cost averaging, special dollar cost averaging
or the fixed-dollar option if you are participating in the rebalancing program.
See "Transfers among investment options" later in this Prospectus. You may not
elect the special dollar cost averaging program if the principal assurance
program is in effect.
YOUR BENEFIT BASE
A benefit base is used to calculate the guaranteed minimum income benefit and
any death benefit, as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Living Benefit option" and
"Guaranteed minimum death benefit" below.
STANDARD DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your
26 Contract features and benefits
guaranteed minimum income benefit and guaranteed minimum death benefit" in
"Accessing your money" later in this Prospectus).
6% ROLL UP TO AGE 85 ENHANCED DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money" later in this Prospectus).
The effective annual interest rate credited to this benefit base is:
o 6% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/Alliance Money Market) and the
account for special dollar cost averaging; and
o 3% with respect to the EQ/Alliance Intermediate Government Securites and
EQ/Alliance Money Market, the fixed maturity options, the guaranteed
interest option and the loan reserve account under Rollover TSA (if
applicable).
No interest is credited to the benefit base after the contract anniversary
following the annuitant's 85th birthday.
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT. Your benefit base is equal to
the greater of:
o your initial contribution to the contract (plus any additional
contributions),
or
o your highest account value on any contract anniversary up to the contract
anniversary following the annuitant's 85th birthday,
each less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money" later in this Prospectus).
GREATER OF 6% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85 ENHANCED DEATH
BENEFIT AND THE GUARANTEED MINIMUM INCOME BENEFIT. Your benefit base is equal to
the greater of the benefit base computed for the 6% Roll up to age 85 or the
Annual ratchet to age 85, as described immediately above, on each contract
anniversary. For the guaranteed minimum income benefit, the benefit base is
reduced by any applicable withdrawal charge remaining when the option is
exercised.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout options.
The guaranteed minimum income benefit is discussed under "Our Living Benefit
option" and annuity payout options are discussed under "Your annuity payout
options" in "Accessing your money" later in this Prospectus. The guaranteed
annuity purchase factors are those factors specified in your contract. The
current annuity purchase factors are those factors that are in effect at any
given time. Annuity purchase factors are based on interest rates, mortality
tables, frequency of payments, the form of annuity benefit, and the annuitant's
(and any joint annuitant's) age and sex in certain instances.
OUR LIVING BENEFIT OPTION
The Living Benefit option offers you a guaranteed minimum income benefit. The
Living Benefit is available if the annuitant is age 20 through 75 at the time
the contract is issued. There is an additional charge for the Living Benefit
which is described under "Living Benefit charge" in "Charges and expenses" later
in this Prospectus. Living Benefit is currently not available in some states.
Please ask your financial professional if Living Benefit is available in your
state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option subject to state
availability. You choose which of these payout options you want and whether you
want the option to be paid on a single or joint life basis at the time you
exercise your guaranteed minimum income benefit. The maximum period certain
available under the Income Manager payout option is 10 years. This period may be
shorter, depending on the annuitant's age when you exercise your guaranteed
minimum income benefit and the type of contract you own. We may also make other
forms of payout options available. For a description of payout options, see
"Your annuity payout options" in "Accessing your money" later in this
Prospectus.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your guaranteed minimum income benefit base less outstanding loan plus
accrued interest (applies to Rollover TSA only), at guaranteed annuity purchase
factors, or (ii) the income provided by applying your actual account value at
our then current annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. You will
begin receiving payments one payment period after the annuity payout option is
issued. Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death. There is no continuation of benefits
following the annuitant's (or joint annuitant's, if applicable) death.
Before you elect Living Benefit, you should consider the fact that the
guaranteed minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
Contract features and benefits 27
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under Living Benefit are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the Living Benefit Income
Manager will be smaller than each periodic payment under the Income Manager
payout annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 6% Roll up to
age 85 benefit base, the table below illustrates the guaranteed minimum income
benefit amounts per $100,000 of initial contribution, for a male annuitant age
60 (at issue) on the contract date anniversaries indicated, who has elected the
life annuity fixed payout option, using the guaranteed annuity purchase factors
as of the date of this prospectus, assuming no additional contributions,
withdrawals, or loans under Rollover TSA contracts, and assuming there were no
allocations to the EQ/Alliance Intermediate Government Securities, EQ/Alliance
Money Market, the guaranteed interest option, the fixed maturity options or the
loan reserve account under Rollover TSA contracts.
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guaranteed minimum
Contract date income benefit -- annual
anniversary at exercise income payable for life
- --------------------------------------------------------------------------------
10 $11,891
15 $18,597
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date anniversary
that you are eligible to exercise the guaranteed minimum income benefit, we will
send you an eligibility notice illustrating how much income could be provided as
of the contract date anniversary. You may notify us within 30 days following the
contract date anniversary if you want to exercise the guaranteed minimum income
benefit. You must return your contract to us in order to exercise this benefit.
The amount of income you actually receive will be determined when we receive
your request to exercise the benefit. You will begin receiving payments one
payment period after the annuity payout contract is issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary after
the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 85th birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii)if the annuitant was older than age 60 at the time an IRA, QP or Rollover
TSA contract was issued, the Living Benefit may not be an appropriate
feature because the minimum distributions required by tax law generally
must begin before the guaranteed minimum income benefit can be exercised;
and
(iv) For QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in
such contract to a Rollover IRA contract. You will be the owner of the
Rollover IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
Your contract provides a death benefit. If you do not elect one of the enhanced
death benefits described below, the death benefit is equal to your account value
(without adjustment for any otherwise applicable negative market value
adjustment) as of the date we receive satisfactory proof of death, any required
instructions for the method of payment, information and forms necessary to
effect payment OR the standard death benefit, whichever provides the highest
amount. The standard death benefit is equal to your total contributions, less
withdrawals (and any associated withdrawal charges), and any taxes that apply.
If you elect one of the enhanced death benefits, the death benefit is equal to
your account value as of the date we receive satisfactory proof of the
annuitant's death, any required instructions for the method of payment,
information and forms necessary to effect payment OR your elected enhanced death
benefit on the date of the annuitant's death, less any subsequent withdrawals,
withdrawal charges and taxes that apply, whichever provides the highest amount.
OPTIONAL ENHANCED DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 84 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 84 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, FLEXIBLE PREMIUM ROTH IRA, AND ROLLOVER TSA CONTRACTS; 20 THROUGH 70 AT
ISSUE OF FLEXIBLE PREMIUM IRA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP
CONTRACTS.
Subject to state availability, you may elect one of the following enhanced death
benefits:
6% ROLL UP TO AGE 85.
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 6% ROLL UP TO AGE 85 AND THE ANNUAL RATCHET TO AGE 85.
Each enhanced death benefit is equal to its corresponding benefit base described
earlier in "Your benefit base." Once you have made your enhanced death benefit
election, you may not change it.
The standard death benefit is the only death benefit available for annuitant
ages 85 through 90 at issue of NQ, Rollover IRA, Roth Conversion IRA, Flexible
Premium Roth IRA and Rollover TSA contracts.
----------------------------------
28 Contract features and benefits
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix IV at the end of this Prospectus for an example of how we calculate
an enhanced death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract. Protection
Plus provides an additional death benefit as described below. See the
appropriate part of "Tax information" later in this Prospectus for the potential
tax consequences of electing to purchase the Protection Plus feature in an NQ,
IRA or Rollover TSA contract.
If the annuitant is 70 or younger when we issue your contract (or if the
successor owner/annuitant is 70 or younger when he or she becomes the successor
owner/annuitant, the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 40% of such death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following applies:
(i) "Net contributions" are the total contributions made (or, if applicable, the
total amount that would otherwise have been paid as a death benefit had the
successor owner/annuitant election not been made plus any subsequent
contributions) reduced on a pro rata basis to reflect withdrawals (including
surrender charges and loans). Reduction on a pro rata basis means that we
calculate the percentage of the current account value that is being withdrawn
and we reduce net contributions by that percentage. For example, if the account
value is $30,000 and you withdraw $12,000, you have withdrawn 40% of your
account value. If the contributions aggregated $40,000 before the withdrawal, it
would be reduced by $16,000 ($40,000 x .40) and net contributions after the
withdrawal would be $24,000 ($40,000-$16,000); (ii) "Death benefit" is equal to
the greater of the account value as of the date we receive satisfactory proof of
death or any applicable guaranteed minimum death benefit as of the date of
death.
If the annuitant is age 71 through 79 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 and 79 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 25% of such death benefit (as described above) less total net contributions
The value of the Protection Plus death benefit is frozen on the first contract
date anniversary after the annuitant turns age 80, except that the benefit will
be reduced for withdrawals on a pro rata basis. Protection Plus must be elected
when the contract is first issued: neither the owner nor the successor
owner/annuitant can add it subsequently. Ask your financial professional if this
feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our processing office within 10 days after you receive it. If state
law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options (less
the daily charges we deduct), (ii) any guaranteed interest in the guaranteed
interest option, (iii) any positive or negative market value adjustments in the
fixed maturity options, and (iv) any guaranteed interest in the account for
special dollar cost averaging, through the date we receive your contract. Some
states require that we refund the full amount of your contribution (not
reflecting (i), (ii) or (iii) above). For any IRA contract returned to us within
seven days after you receive it, we are required to refund the full amount of
your contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA or Flexible Premium
Roth IRA contract, you may cancel your Roth Conversion IRA or Flexible Premium
Roth IRA contract and return to a Rollover IRA or Flexible Premium IRA contract,
whichever applies. Our processing office, or your financial professional, can
provide you with the cancellation instructions.
Contract features and benefits 29
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) the guaranteed interest option; (iii) market adjusted
amounts in the fixed maturity options; (iv) value in the account for special
dollar cost averaging; and (v) value you have in the loan reserve account
(applies for Rollover TSA contracts only). These amounts are subject to certain
fees and charges discussed under "Charges and expenses" later in this
Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge; (ii) any
applicable withdrawal charges; and (iii) the amount of any outstanding loan plus
accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your money"
later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option less daily charges for:
(i) mortality and expense risks;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan
reserve account under a Rollover TSA contract.
In addition, when we deduct the enhanced death benefit, Living Benefit and/or
Protection Plus benefit charges, the number of units credited to your contract
will be reduced. Your units are also reduced when we deduct the annual
administrative charge. A description of how unit values are calculated is found
in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED
INTEREST OPTION
Your value in the guaranteed interest option at any time will equal: your
contributions and transfers to that option, plus interest, minus withdrawals out
of the option, and charges we deduct.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time will
equal your contribution allocated to that option, plus interest, less the sum of
all amounts that have been transferred to the variable investment options you
have selected.
30 Determining your contract's value
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar cost
averaging.
o You may not transfer to a fixed maturity option that has a rate to maturity
of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date, the transfer may cause a market value adjustment.
The maximum amount that may be transferred from the guaranteed interest option
to any investment option (including amounts transferred pursuant to the
fixed-dollar option dollar cost averaging program described earlier in this
Prospectus) in any contract year is the greatest of:
(a) 25% of the amount you have in the guaranteed interest option on the last
day of the prior contract year; or,
(b) the total of all amounts transferred at your request from the guaranteed
interest option to any of the Investment options in the prior contract
year; or,
(c) 25% of amounts transferred or allocated to the guaranteed interest option
during the current contract year.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer instructions
of an agent acting under a power of attorney or otherwise who is acting on
behalf of one or more owners. In making these determinations, we may consider
the combined transfer activity of annuity contracts and life insurance policies
that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However, we
may not continue to provide such letters. We may also, in our sole discretion
and without further notice, change what we consider disruptive transfer
activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis).
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date. Your
entire account value in the variable investment options must be included in the
rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing. There is no charge for the rebalancing
feature.
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging, special dollar cost averaging or the
Transferring your money among investment options 31
fixed-dollar option dollar cost averaging program. Rebalancing is not available
for amounts you have allocated in the guaranteed interest option or fixed
maturity options.
32 Transferring your money among investment options
4. Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals, see
"Tax information" later in this Prospectus and in the SAI.
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Method of withdrawal
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Lifetime
required
Substantially minimum
Contract Lump sum Systematic equal distribution
- --------------------------------------------------------------------------------
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
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Flexible
Premium IRA Yes Yes Yes Yes
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Roth Conversion
IRA Yes Yes Yes No
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Flexible Premium
Roth IRA Yes Yes Yes No
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QP Yes No No Yes
- --------------------------------------------------------------------------------
Rollover TSA* Yes Yes No Yes
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* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time. (Rollover
TSA contracts may have restrictions.) The minimum amount you may withdraw is
$300. If you request to withdraw more than 90% of a contract's current cash
value, we will treat it as a request to surrender the contract for its cash
value. See "Surrendering your contract to receive its cash value" below.
Lump sum withdrawals will be subject to a withdrawal charge if they exceed the
15% free withdrawal amount (see "15% free withdrawal amount" in "Charges and
expenses" later in this Prospectus). Under Rollover TSA contracts, if a loan is
outstanding, you may only take lump sum withdrawals as long as the cash value
remaining after any withdrawal equals at least 10% of the outstanding loan plus
accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and all IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions)
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would be
less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change the
amount or percentage in any contract year in which you have already taken a lump
sum withdrawal. You can cancel the systematic withdrawal option at any time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump sum
withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you to
cancel this option, you have completed at least 5 years of payments and attained
age 59-1/2 or you take a lump sum withdrawal. You may elect to start receiving
substantially equal withdrawals again, but the
Accessing your money 33
payments may not restart in the same contract year in which you took a lump sum
withdrawal. We will calculate the new withdrawal amount.
Substantially equal withdrawals are not subject to a withdrawal charge.
LIFETIME MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Flexible Premium IRA, QP and Rollover TSA contracts only -- See
"Tax information" later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually. See the
"Required minimum distributions" section in "Tax information" in the SAI for
your specific type of retirement arrangement.
We do not impose a withdrawal charge on minimum distribution withdrawals we
calculate for you except if, when added to a lump sum withdrawal previously
taken in the same contract year, the minimum distribution withdrawal exceeds the
15% free withdrawal amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution withdrawals
if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, Flexible Premium IRA, QP and Rollover TSA contracts, we will
send a form outlining the distribution options available in the year you reach
age 70-1/2 (if you have not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options and the guaranteed
interest option. If there is insufficient value or no value in the variable
investment options and guaranteed interest option, any additional amount of the
withdrawal required or the total amount of the withdrawal will be withdrawn from
the fixed maturity options in order of the earliest maturity date(s) first and
then from the account for special dollar cost averaging. A market value
adjustment may apply to withdrawals from the fixed maturity options. If those
amounts are insufficient, we will deduct all or a portion of the charge from the
account for special dollar cost averaging.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
Your applicable benefit base will be reduced on a dollar-for-dollar basis as
long as the sum of your withdrawals in a contract year is 6% or less of the
applicable benefit base on the most recent contract date anniversary. Any
portion of a withdrawal that causes the sum of your withdrawals in a contract
year to exceed 6% of the applicable benefit base on the most recent contract
date anniversary and any subsequent withdrawals in that same contract year will
reduce your applicable benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 6% threshold,
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your death benefit was $40,000 before
the withdrawal, it would be reduced by $16,000 ($40,000 x.40) and your new death
benefit after the withdrawal would be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you may
only take a loan with the written consent of your spouse. Your contract contains
further details of the loan provision. Also, see "Tax information" later in this
Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum loan
amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your account
value, subject to any limits under the federal income tax rules. The term of a
loan is five years. However, if you use the loan to acquire your primary
residence, the term is 10 years. The term may not extend beyond the earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield
34 Accessing your money
Averages for Baa bonds for the calendar month ending two months before the first
day of the calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options and the guaranteed interest option. If these amounts are
insufficient, any additional amount of the loan will be subtracted from the
fixed maturity options in order of the earliest maturity date(s) first. A market
value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar amount
of the loan repaid from the loan reserve account to the investment options
according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We will
determine your cash value on the date we receive the required information. All
benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below. For
the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you withdraw
(less any withdrawal charge) and, upon surrender, payment of the cash value. We
may postpone such payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the guaranteed interest
option, fixed maturity options and the account for special dollar cost averaging
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) offers you several choices of annuity payout options.
Some enable you to receive fixed annuity payments, which can be either level or
increasing, and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under Living Benefit, your choice of payout options are those
that are available under the Living Benefit (see "Our Living Benefit option"
earlier in this Prospectus).
- --------------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
- --------------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available in
payout options New York)
Life annuity with period certain
- --------------------------------------------------------------------------------
Income Manager payout options Life annuity with period certain
(available for annuitants age 83 Period certain annuity
or less at contract issue)
- --------------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following the
annuitant's death with this payout option, it provides the highest monthly
payment of any of the life annuity options, so long as the annuitant is
living.
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contract that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount applied
to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This
Accessing your money 35
option does not guarantee payments for the rest of the annuitant's life. It
does not permit any repayment of the unpaid principal, so you cannot elect to
receive part of the payments as a single sum payment with the rest paid in
monthly annuity payments. This payout option is available only as a fixed
annuity.
The life annuity, life annuity with period certain, and life annuity with refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
the annuitant's life, and after the annuitant's death, payments continue to the
survivor. We may offer other payout options not outlined here. Your financial
professional can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout annuity
contracts. The other payout annuity contracts may provide higher or lower income
levels, but do not have all the features of the Income Manager payout annuity
contract. You may request an illustration of the Income Manager payout annuity
contract from your financial professional. Income Manager payout options are
described in a separate prospectus that is available from your financial
professional. Before you select an Income Manager payout option, you should read
the prospectus which contains important information that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and IRA
contracts). The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only). You may not elect a period
certain Income Manager payout option unless withdrawal charges are no longer in
effect under your Equitable Accumulator(R).
For QP and Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) contract to an Income Manager payout annuity. In this case, we
will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) and we will deduct any applicable withdrawal charge. For the tax
consequences of withdrawals, see "Tax information" later in this Prospectus and
in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on the
payout option that you choose, and the timing of your purchase as it relates to
any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under your
Equitable Accumulator(R) is imposed if you select a period certain. If the
period certain is more than 5 years, then the withdrawal charge deducted will
not exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under the
Equitable Accumulator(R). If the withdrawal charge that otherwise would have
been applied to your account value under your Equitable Accumulator(R) is
greater than 2% of the contributions that remain in your contract at the time
you purchase your payout option, the withdrawal charges under the Income Manager
will apply. The year in which your account value is applied to the payout option
will be "contract year 1."
For contracts issued in New York where the annuitant was age 84 or 85 at
contract issue, any applicable withdrawal charge will be imposed if you select a
period certain annuity.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return your
contract before annuity payments begin unless you are applying only some of your
account value to an Income Manager contract. The contract owner and annuitant
must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) contract date. Except with
respect to the Income Manager annuity payout options, where payments are made on
the 15th day of each month, you can change the date your annuity payments are to
begin anytime before that date as long as you do not choose a date later than
the 28th day of any month. Also, that date may not be later than the annuity
maturity date described below:
36 Accessing your money
The amount of the annuity payments will depend on the amount applied to purchase
the annuity and the applicable annuity purchase factors, discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less than
$2,000 or the initial payment under the form elected is less than $20 monthly,
we reserve the right to pay the account value in a single sum rather than as
payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 95th birthday. For
contracts issued in New York, the maturity date is the contract date that
follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- --------------------------------------------------------------------------------
Maximum
Issue age annuitization age
- --------------------------------------------------------------------------------
0-75 85
76 86
77 87
78-80 88
81-85 90
- --------------------------------------------------------------------------------
This may also be different in other states.
Before the last day by which annuity payments must begin, we will notify you by
letter. Once you have selected an annuity payout option and payments have begun,
no change can be made other than: (i) transfers (if permitted in the future)
among the variable investment options if a Variable Immediate Annuity payout
option is selected; and (ii) withdrawals or contract surrender (subject to a
market value adjustment) if an Income Manager annuity payout option is chosen.
Accessing your money 37
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary -- an annual administrative charge, if
applicable.
o At the time you make certain withdrawals or surrender your contract -- a
withdrawal charge.
o On each contract date anniversary -- a charge if you elect a death benefit
(other than the Standard death benefit).
o On each contract date anniversary -- a charge for the Living Benefit, if you
elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your state.
An annuity administrative fee may also apply.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the Standard death
benefit. The daily charge is equivalent to an annual rate of .75% of the net
assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables, shown
in each contract, will differ from actual mortality experience. Lastly, we
assume a mortality risk to the extent that at the time of death, the guaranteed
minimum death benefit exceeds the cash value of the contract. The expense risk
we assume is the risk that it will cost us more to issue and administer the
contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option.
The charge, together with the annual administrative charge described below, is
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.20% of the net assets in each
variable investment option.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on each contract date
anniversary. We deduct the charge if your account value on the last business day
of the contract year is less than $50,000. If your account value on such date is
$50,000 or more, we do not deduct the charge. During the first two contract
years, the charge is equal to $30 or, if less, 2% of your account value. The
charge is $30 for contract years three and later.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option (if permitted in your state) on a pro rata
basis. If those amounts are insufficient, we will deduct all or a portion of the
charge from the fixed maturity options in order of the earliest maturity date(s)
first. A market value adjustment may apply. If those amounts are insufficient,
we will deduct all or a portion of the charge from the account for special
dollar cost averaging. If you surrender your contract during the contract year,
we will deduct a pro rata portion of the charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
38 Charges and expenses
- --------------------------------------------------------------------------------
Contract year
- --------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- --------------------------------------------------------------------------------
Percentage of
contribution 7% 7% 6% 6% 5% 3% 1% 0%
- --------------------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year in
which we receive a contribution as "contract year 1." Amounts withdrawn up to
the free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. However, federal income tax rules treat
earnings under your contract as withdrawn first. See "Tax information" later in
this Prospectus and in the SAI.
Please note that you may incur a withdrawal charge if your contract was issued
in New York and your annuitant was age 84 or 85 at issue because you must accept
distribution of your cash value beginning with the contract anniversary
following the annuitant's 90th birthday.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to that
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover our sales expenses.
For annuitants that are ages 84 and 85 when the contract is issued in
Pennsylvania, the withdrawal charge will be computed in the same manner as for
other contracts, except that the withdrawal charge schedule will be different.
For these contracts, the withdrawal charge schedule will be 5% of each
contribution made in the first contract year, decreasing by 1% each subsequent
contract year to 0% in the sixth and later contract years.
The withdrawal charge does not apply in the circumstances described below.
ANNUITANT AGES 86 THROUGH 90 WHEN THE CONTRACT IS ISSUED. The withdrawal charge
does not apply under the contract if the annuitant is age 86 or older when the
contract is issued.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust:
The free withdrawal amount will equal the greater of:
(1) the current account value less contributions that have not been withdrawn
(earnings in the contract) and (2) the 15% free withdrawal amount defined above.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
(i) The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
(ii) We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
(iii)The annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved
by Medicare as a provider of skilled nursing care service, or (b) licensed
as a skilled nursing home by the state or territory in which it is located
(it must be within the United States, Puerto Rico, or U.S. Virgin Islands)
and meets all of the following:
- -- its main function is to provide skilled, intermediate, or custodial nursing
care;
- -- it provides continuous room and board to three or more persons;
- -- it is supervised by a registered nurse or licensed practical nurse;
- -- it keeps daily medical records of each patient;
- -- it controls and records all medications dispensed; and
- -- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions described in (i), (ii) or
(iii) above existed at the time a contribution was remitted or if the condition
began within 12 months of the period following remittance. Some states may not
permit us to waive the withdrawal charge in the above circumstances, or may
limit the circumstances for which the withdrawal charge may be waived. Your
financial professional can provide more information or you may contact our
processing office.
FOR CONTRACTS ISSUED IN NEW YORK -- FIXED MATURITY OPTIONS
For contracts issued in New York, the withdrawal charge that applies to
withdrawals taken from amounts in the fixed maturity options will never exceed
7% and will be determined by applying the New York Alternate Scale I shown
below. If you withdraw amounts that have been transferred from one fixed
maturity option to another, we use the New York Alternate Scale II (also shown
below) if it produces a higher charge than Alternate Scale I.
The New York withdrawal charge may not exceed the withdrawal charge that would
normally apply to the contract. If a contribution has been in the contract for
more than 7 years and therefore would have no withdrawal charge, no withdrawal
charge will apply. Use of a New York Alternate Scale can only result in a lower
charge. We will compare the result of applying Alternate Scale I or II, as the
case may be, to the result of applying the normal withdrawal charge, and will
charge the lower withdrawal charge.
Charges and expenses 39
- --------------------------------------------------------------------------------
NY Alternate Scale I NY Alternate Scale II
- --------------------------------------------------------------------------------
Year of investment in fixed maturity Year of transfer within fixed maturity
option* option*
- --------------------------------------------------------------------------------
Within year 1 7% Within year 1 5%
- --------------------------------------------------------------------------------
2 6% 2 4%
- --------------------------------------------------------------------------------
3 5% 3 3%
- --------------------------------------------------------------------------------
4 4% 4 2%
- --------------------------------------------------------------------------------
5 3% 5 1%
- --------------------------------------------------------------------------------
6 2% After year 5 0%
- --------------------------------------------------------------------------------
7 1%
- --------------------------------------------------------------------------------
After year 7 0% Not to exceed 1% times the number of years
remaining in the fixed maturity option,
rounded to the higher number of years. In
other words, if 4.3 years remain, it would
be a 5% charge.
- --------------------------------------------------------------------------------
* Measured from the contract date anniversary prior to the date of the
contribution or transfer
If you take a withdrawal from an investment option other than the fixed maturity
options, the amount available for withdrawal without a withdrawal charge is
reduced. It will be reduced by the amount of the contribution in the fixed
maturity options to which no withdrawal charge applies.
For contracts issued in New York, you should consider that on the maturity date
of a fixed maturity option if we have not received your instructions for
allocation of your maturity value, we will transfer your maturity value to the
fixed maturity option with the shortest available maturity. If we are not
offering other fixed maturity options, we will transfer your maturity value to
the EQ/Alliance Money Market option.
The potential for lower withdrawal charges for withdrawals from the fixed
maturity options and the potential for a lower free withdrawal amount than what
would normally apply, should be taken into account when deciding whether to
allocate amounts to, or transfer amounts to or from, the fixed maturity options.
We will deduct the annual administrative charge and the withdrawal charge from
the variable investment options and the guaranteed interest option as discussed
above. If the amounts in those options are insufficient to cover the charges, we
reserve the right to deduct the charges from the fixed maturity options. Charges
deducted from the fixed maturity options are considered withdrawals and, as
such, will result in a market value adjustment.
GUARANTEED MINIMUM DEATH BENEFIT CHARGE
Annual ratchet to age 85. If you elect the Annual ratchet to age 85 enhanced
death benefit, we deduct a charge annually from your account value on each
contract date anniversary. The charge is equal to 0.20% of the Annual ratchet to
age 85 benefit base.
6% Roll up to age 85. If you elect the 6% Roll up to age 85 enhanced death
benefit, we deduct a charge annually from your account value on each contract
date anniversary. The charge is equal to 0.35% of the 6% Roll up to age 85
benefit base.
Greater of 6% Roll up to age 85 or Annual ratchet to age 85. If you elect this
enhanced death benefit, we deduct a charge annually from your account value on
each contract date anniversary. The charge is equal to 0.45% of the greater of
the 6% Roll up to age 85 or the Annual ratchet to age 85 benefit base.
There is no additional charge for the Standard death benefit.
LIVING BENEFIT CHARGE
If you elect the Living Benefit, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches age 85, whichever occurs
first. The charge is equal to 0.45% of the applicable benefit base in effect on
the contract date anniversary.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options in order of the earliest maturity date(s) first. A market value
adjustment may apply. If those amounts are insufficient, we will deduct all or a
portion of the charge from the account for special dollar cost averaging.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge is
equal to 0.35% of the account value on each contract date anniversary. We will
deduct this charge from your value in the variable investment options and the
guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options in the order of the earliest maturity date(s) first. A market
value adjustment may apply. If those amounts are insufficient, we will deduct
all or a portion of the charge from the account for special dollar cost
averaging.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain applicable taxes that may be
imposed on us, such as premium taxes in your state. Generally, we deduct the
charge from the amount applied to provide an annuity payout option. The current
tax charge that might be imposed by us varies by state and ranges from 0% to
3.5% (the rate is 1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
40 Charges and expenses
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges, please
refer to the prospectuses for the Trusts following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal charge
or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit or the guaranteed minimum death benefit, or offer variable investment
options that invest in shares of either Trust that are not subject to the 12b-1
fee. Group arrangements include those in which a trustee or an employer, for
example, purchases contracts covering a group of individuals on a group basis.
Group arrangements are not available for IRA contracts. Sponsored arrangements
include those in which an employer allows us to sell contracts to its employees
or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We also may establish different rates to maturity for the fixed maturity options
under different classes of contracts for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these and
other applicable laws on such programs. We recommend that employers, trustees,
and others purchasing or making contracts available for purchase under such
programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
Charges and expenses 41
6. Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you a written confirmation when we receive your request. Under jointly
owned contracts, the surviving owner is considered the beneficiary, and will
take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract, the
beneficiary must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account, the
custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
applicable guaranteed minimum death benefit. We determine the amount of the
death benefit (other than the applicable guaranteed minimum death benefit) and
any amount applicable under the Protection Plus feature, as of the date we
receive satisfactory proof of the annuitant's death, any required instructions
for the method of payment, information and forms necessary to effect payment.
The amount of the applicable guaranteed minimum death benefit will be such
guaranteed minimum death benefit as of the date of the annuitant's death
adjusted for any subsequent withdrawals. The death benefit will be less a
deduction for any outstanding loan plus accrued interest on the date that the
death benefit payment is made (applies to Rollover TSA only).
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant, can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive the death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes the
sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
successor owner for this purpose, the entire interest in the contract must be
distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (new
owner) within five years after your death (or in a joint ownership situation,
the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin within one year after the non-annuitant
owner's death. Unless this alternative is elected, we will pay any cash value
five years after your death (or the death of the first owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor owner/annuitant feature,
we will increase the account value to equal your elected guaranteed minimum
death benefit as of the date of your
42 Payment of death benefit
death if such death benefit is greater than such account value, plus any amount
applicable under the Protection Plus feature, and adjusted for any subsequent
withdrawals. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to
contributions made before your death. Withdrawal charges will apply if
additional contributions are made. These additional contributions will be
considered to be withdrawn only after all other amounts have been withdrawn. In
determining whether your applicable guaranteed minimum death benefit option will
continue to grow, we will use your surviving spouse's age (as of the date we
receive satisfactory proof of your death, any required instructions and the
information and forms necessary to effect the successor owner/annuitant
feature).
Where an NQ contract is owned by a Living Trust, as defined in the contract, and
at the time of the annuitant's death the annuitant's spouse is the sole
beneficiary of the Living Trust, the Trustee, as owner of the contract, may
request that the spouse be substituted as annuitant as of the date of the
annuitant's death. No further change of annuitant will be permitted.
Where an IRA contract is owned in a custodial individual retirement account, and
your spouse is the sole beneficiary of the account, the custodian may request
that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to keep
the contract in your name and receive distributions under the contract instead
of receiving the death benefit in a single sum. In order to elect this option,
the beneficiary must be an individual. Certain trusts with only individual
beneficiaries will be treated as individuals. We require this election to be
made within nine months following the date we receive proof of your death and
before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the applicable guaranteed
minimum death benefit as of the date of your death, if such death benefit is
greater than such account value, plus any amount applicable under the Protection
Plus feature, and adjusted for any subsequent withdrawals. The beneficiary
continuation option is available if we have received regulatory clearance in
your state. Where an IRA contract is owned in a custodial individual retirement
account, the custodian may reinvest the death benefit in an Accumulator(R)
individual retirement annuity contract, using the account beneficiary as the
annuitant. Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected by
the beneficiary.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your death,
and determined on a term certain basis). These payments must begin no later than
December 31st of the calendar year after the year of your death. However, if you
die before your Required Beginning Date for Required Minimum Distributions, as
discussed in "Tax information" later in this Prospectus and in the SAI, your
beneficiary may choose the "5-year rule" instead of annual payments over life
expectancy. If your beneficiary chooses this, your beneficiary may take
withdrawals as desired, but the entire account value must be fully withdrawn by
December 31st of the 5th calendar year after your death. If you have more than
one beneficiary, and one of them elects this option, then all of your
beneficiaries will receive this option.
Payment of death benefit 43
7. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) contracts owned by United
States taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Rollover IRA, Flexible Premium IRA, Roth Conversion IRA, Flexible
Premium Roth IRA, QP or Rollover TSA. Therefore, we discuss the tax aspects of
each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became be
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions that can be made to all types of tax-favored retirement plans. In
addition to increasing amounts that can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b) Arrangements
("TSAs"), respectively: an IRA or 403(b) annuity contract such as this one, or
an IRA or 403(b)(7) custodial or other qualified account. Annuity contracts can
also be purchased in connection with retirement plans qualified under Code
Section 401 ("QP contracts"). How these arrangements work, including special
rules applicable to each, are described in the specific sections for each type
of arrangement, below. More information on IRAs and TSAs is provided in the SAI.
You should be aware that the funding vehicle for a qualified arrangement does
not provide any tax deferral benefit beyond that already provided by the Code
for all permissible funding vehicles. Before choosing an annuity contract,
therefore, you should consider the annuity's features and benefits, such as
Accumulator's(R) choice of death benefits and Living Benefit guaranteed minimum
income benefit, Special Dollar Cost Averaging, selection of investment funds,
guaranteed interest option, fixed maturity options and its choices of pay-out
options, as well as the features and benefits of other permissible funding
vehicles and the relative costs of annuities and other arrangements. You should
be aware that cost may vary depending on the features and benefits made
available and the charges and expenses of the investment options or funds that
you elect. See also Appendix II at the end of this Prospectus for a discussion
of QP contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying
44 Tax information
taxes on it. This is your "investment in the contract." Generally, your
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which is part of the contract and which should have no adverse tax effect, it is
possible that the IRS could take a contrary position or assert that the
Protection Plus rider is not part of the contract. In such a case the charges
for the Protection Plus rider could be treated for federal income tax purposes
as a partial withdrawal from the contract. If this were so, such a deemed
withdrawal could be taxable, and for contract owners under age 59-1/2, also
subject to a tax penalty. Were the IRS to take this position, Equitable would
take all reasonable steps to attempt to avoid this result, which would include
amending the contract (with appropriate notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the NQ
contract is another nonqualified deferred annuity contract or life insurance
or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) NQ contract. If you are using a life insurance or
endowment contract the owner and the insured must be the same on both sides
of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as ordinary
income (not capital gain) to the extent it exceeds your investment in the
contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2, a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. Some
of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be included
in your gross income for federal income tax purposes. Incidents of investment
control could include among other items, the number of investment options
available under a contract and/or the frequency of transfers available under the
contract. In connection with the issuance of regulations concerning investment
diversification in 1986, the Treasury Department announced that the
diversification regulations did not provide guidance on investor control but
that guidance would be issued in the form of regulations or rulings. As of the
date of this prospectus, no such guidance has been issued. It is not known
whether such guidelines, if in fact issued, would have retroactive adverse
effect on existing contracts. We cannot provide assurance
Tax information 45
as to the terms or scope of any future guidance nor any assurance that such
guidance would not be imposed on a retroactive basis to contracts issued under
this prospectus. We reserve the right to modify the contract as necessary to
attempt to prevent you from being considered the owner of the assets of the
separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets funding the account for the benefit of the IRA owner. The assets
typically include mutual funds and/or individual stocks and securities in a
custodial account, and bank certificates of deposit in a trusteed account. In an
individual retirement annuity, an insurance company issues an annuity contract
that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA or Roth IRA. The traditional IRAs we
offer are the Rollover IRA and Flexible Premium IRA. The versions of the Roth
IRA available are the Roth Conversion IRA and Flexible Premium Roth IRA. The SAI
contains the information that the IRS requires you to have before you purchase
an IRA. We do not discuss education IRAs because they are not available in
individual retirement annuity form. The disclosure generally assumes direct
ownership of the individual retirement annuity contract. For contracts owned in
a custodial individual retirement account, the disclosure will apply only if you
terminate your account or transfer ownership of the contract to yourself.
The Equitable Accumulator(R) traditional and Roth IRA contracts have been
approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) traditional and Roth IRA contracts.
Because the IRS has announced that issuers of formally approved IRAs must amend
their contracts to reflect recent tax law changes and resubmit the amended
contracts to retain such formal approval, Equitable intends to comply with such
requirement during 2002.
PROTECTION PLUS(SM) FEATURE
The Protection Plus feature is offered for IRA contracts, subject to state and
contract availability. The IRS approval of the Accumulator(R) contract as a
traditional IRA and Roth IRA, respectively, noted in the paragraph above does
not include this optional Protection Plus feature. We have filed a request with
the IRS that the contract with the Protection Plus feature qualifies as to form
for use as a traditional IRA and Roth IRA, respectively. There is no assurance
that the contract with the Protection Plus feature meets the IRS qualification
requirements for IRAs. IRAs generally may not invest in life insurance
contracts. Although we view the optional Protection Plus benefit as an
investment protection feature which should have no adverse tax effect and not as
life insurance, it is possible that the IRS could take a contrary position
regarding tax qualification or assert that the Protection Plus rider is not a
permissible part of an individual retirement annuity contract. We further view
the optional Protection Plus benefit as part of the contract. There is also a
risk that the IRS may take the position that the optional Protection Plus
benefit is not part of the annuity contract. In such a case, the charges for the
Protection Plus rider could be treated for federal income tax purposes as a
partial withdrawal from the contract. If this were so, such a deemed withdrawal
could be taxable, and for contract owners under age 59-1/2, also subject to a
tax penalty. Were the IRS to take any adverse position, Equitable would take all
reasonable steps to attempt to avoid any adverse result, which would include
amending the contract (with appropriate notice to you). You should discuss with
your tax adviser whether you should consider purchasing an Accumulator(R) IRA or
Accumulator(R) Roth IRA with optional Protection Plus feature.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
46 Tax information
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer related to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA within
federal tax limits up until the calendar year you reach age 70-1/2. Regular
contributions for any year to a Roth IRA can be made at any time during your
life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether such
contributions are eligible for special tax treatment (for example, deductibility
from income or a special credit) may vary, depending on your income, age and
whether you participate in an employer-sponsored retirement plan. Roth IRA
contributions are not tax deductible. The maximum regular contribution that can
be made to all of your IRAs (whether traditional or Roth) for 2002 is $3,000.
The maximum regular contribution for 2002 is increased to $3,500 if you are at
least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because the
funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs is
contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your beneficiary.
Withdrawals from an IRA, surrender of an IRA, death benefits from an IRA and
annuity payments from an IRA may be fully or partially taxable. Withdrawals and
distributions from IRAs are taxable as ordinary income (not capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also have
to meet a five-year aging period. It is not possible to have a qualified
tax-free distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the IRA
after the owner reaches age 70-1/2. These rules also require distributions after
the owner's death. No distributions are required to be made from Roth IRAs until
after the Roth IRA owner's death, but then the required minimum distribution
rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
for traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally, there are two types of funding vehicles available for 403(b)
arrangements -- an annuity contract under Section 403(b)(1) of the Internal
Revenue Code or a custodial account that invests only in mutual funds and which
is treated as an annuity contract under Section 403(b)(7) of the Code. Both
types of 403(b) arrangements qualify for tax deferral.
PROTECTION PLUS FEATURE
The Protection Plus feature is offered for Rollover TSA contracts, subject to
state and contract availability. There is no
Tax information 47
assurance that the contract with the Protection Plus feature meets the
qualification requirements for TSAs. There is a limit to the amount of life
insurance benefits that TSAs may offer. Although we view the optional Protection
Plus benefit as an investment protection feature which should have no adverse
tax effect and not as a life insurance benefit, it is possible that the IRS
could take a contrary position regarding tax qualification or assert that the
Protection Plus rider is not a permissible part of a TSA contract. If the IRS
were to take the position that the optional Protection Plus benefit is not part
of the contract, in such a case, the charges for the Protection Plus rider could
be treated for federal income tax purposes as a partial withdrawal from the
contract. If this were so, such a deemed withdrawal could affect the tax
qualification of the TSA and could be taxable. Were the IRS to take any adverse
position, Equitable would take all reasonable steps to attempt to avoid any
adverse result, which would include amending the contract (with appropriate
notice to you). You should discuss with your tax adviser whether you should
consider purchasing an Accumulator(R) Rollover TSA contract with the optional
Protection Plus feature.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Rollover TSA contract:
o a rollover from another eligible retirement plan, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate documentation
satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another, because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a distribution.
We accept direct transfers of TSA funds under Revenue Ruling 90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Rollover TSA contract,
you may have to obtain your employer's authorization or demonstrate that you do
not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment status,
you may have to get your employer's consent to take a loan or withdrawal. Your
employer will tell us this when you establish the TSA through a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the following
events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to withdrawal restrictions may depend on the source
of the funds used to establish the Accumulator(R) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from TSAs before you reach age 59-1/2 unless an exception applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan without
approval from the employer who provided the funds, we will have this information
in our records based on what you and the employer who provided the TSA funds
told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
48 Tax information
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over an "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan (separate
accounting required), another TSA or a traditional IRA) which agrees to accept
the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling 90-24
are not distributions.
Rollovers and transfers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation from service, if later. These rules are discussed in greater
detail in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution is
includable in your gross income. This may result in tax being withheld even
though the Roth IRA distribution is ultimately not taxable. You can elect out
of withholding as described below.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here in
detail. However, we may require additional documentation in the case of payments
made to non-United States persons and United States persons living abroad prior
to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective unless
and until you revoke it. You may revoke or change your withholding election at
any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from a
qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o hardship withdrawals; or
Tax information 49
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
50 Tax information
8. More information
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ABOUT SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. The results of Separate Account No. 49 operations are
accounted for without regard to Equitable Life's other operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or the Separate Account No. 49.
Each subaccount (variable investment option) within the Separate Accounts
invests solely in class IB shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, either Separate Account, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate each Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against each Separate Account
or a variable investment option directly);
(5) to deregister the Separate Accounts under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Accounts; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999, EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31, 2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish additional
portfolios or eliminate existing portfolios at any time. More detailed
information about each Trust, its portfolio investment objectives, policies,
restrictions, risks, expenses, its Rule 12b-1 Plan relating to its Class IB
shares, and other aspects of its operations, appears in the prospectuses for
each Trust, which are attached at the end of this Prospectus, or in the
respective SAIs, which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table below are illustrative
only and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your financial professional.
For example, the rates to maturity for new allocations as of February 15, 2002
and the related price per $100 of maturity value were as shown below:
- --------------------------------------------------------------------------------
Fixed maturity
options with
February 15th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 15, 2002 maturity value
- --------------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
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information 51
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Fixed maturity
options with
February 15th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 15, 2002 maturity value
- --------------------------------------------------------------------------------
2009 5.08% $ 70.67
2010 5.29% $ 66.19
2011 5.47% $ 61.90
2012 5.59% $ 58.03
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw any of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date by adjusting the rates on new fixed maturity options
established on that date to reflect a similar maturity date as the
fixed maturity option from which the withdrawal is being made (unless
the withdrawal is being made on the anniversary of the original
contribution to the fixed maturity option, in which case the amount
will be based on the then current rate to maturity).
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix III at the end of this Prospectus for
an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no longer
offering new fixed maturity options, the "current rate to maturity" will be
determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held in
this separate account. We may, subject to state law that applies, transfer all
assets allocated to the separate account to our general account. We guarantee
all benefits relating to your value in the fixed maturity options, regardless of
whether assets supporting fixed maturity options are held in a separate account
or our general account.
We expect the rates to maturity for the fixed maturity options to be influenced
by, but not necessarily correspond to, among other things, the yields that we
can expect to realize on the separate account's investments from time to time.
Our current plans are to invest in fixed-income obligations, including corporate
bonds, mortgage-backed and asset-backed securities, and government and agency
issues having durations in the aggregate consistent with those of the fixed
maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the guaranteed interest option and the fixed
maturity options and the account for special dollar cost averaging, as well as
our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
52 More information
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits" earlier in this
Prospectus.
Even if we accept the wire order and essential information, a contract generally
will not be issued until we receive and accept a properly completed application.
In certain cases we may issue a contract based on information forwarded
electronically. In these cases, you must sign our Acknowledgment of Receipt
form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgment of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgment of Receipt
form.
After your contract has been issued, additional contributions may be transmitted
by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ, FLEXIBLE PREMIUM IRA AND FLEXIBLE
PREMIUM ROTH IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution into
an NQ, Flexible Premium IRA or Flexible Premium Roth IRA contract on a monthly
or quarterly basis. AIP is not available for Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contracts.
For NQ contracts, the minimum amounts we will deduct are $100 monthly and $300
quarterly. Under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the minimum amount is $50. AIP additional contributions may be allocated to any
of the variable investment options and available fixed maturity options, but not
the account for special dollar cost averaging. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all the
required information unless another date applies as indicated below.
o If your contribution, transfer, or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to the guaranteed interest option will receive the
crediting rate in effect on that business day for the specified time period.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day
(unless a rate lock-in is applicable).
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that business day. At
certain times, we may offer the opportunity to lock in the interest rate for
an initial contribution to be received under Section 1035 exchanges and
trustee to trustee transfers. Your financial professional can provide
information or you can call our processing office.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity in
effect for that fixed maturity option on the business day of the transfer.
o Transfers to the guaranteed interest option will receive the crediting rate
in effect on that business day for the specified time period.
More information 53
ABOUT YOUR VOTING RIGHTS
As the owner of shares of the Trusts, we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in each prospectus for the Trusts or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a portfolio for which no instructions have been received in the
same proportion as we vote shares of that portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Its shares are sold to our separate accounts
and an affiliated qualified plan trust. In addition, shares of the Trusts are
held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the effect
of the voting instructions of the contract owners, we currently do not foresee
any disadvantages because of this. The Board of Trustees of each Trust intends
to monitor events in order to identify any material irreconcilable conflicts
that may arise and to determine what action, if any, should be taken in
response. If we believe that a response to any of those events insufficiently
protects our contract owners, we will see to it that appropriate action is
taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Account require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001 and
2000, and for the three years ended December 31, 2001 incorporated in this
prospectus by reference to the 2001 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI is
available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive notification
of any change at our processing office. You cannot assign your NQ contract as
collateral or security for a loan. Loans are also not available under your NQ
contract. In some cases, an assignment or change of ownership may have adverse
tax consequences. See "Tax information" earlier in this Prospectus.
You cannot assign or transfer ownership of an IRA, QP or Rollover TSA contract
except by surrender to us. If your individual retirement annuity contract is
held in your custodial individual retirement account, you may only assign or
transfer ownership of such an IRA contract to yourself. Loans are not available
and you cannot assign IRA and QP contracts as security for a loan or other
obligation. If the employer that provided the funds does not restrict them,
loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your IRA, QP or Rollover TSA
contract to another similar arrangement under federal income tax rules. In the
case of such a transfer, which involves a surrender of your contract, we will
impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC ("AXA Advisors") and AXA
Distributors, LLC ("AXA Distributors"). Both AXA Advisors and AXA Distributors
serve as principal underwriters of Separate Account No. 49. The offering of the
contracts is intended to be continuous.
AXA Advisors (the successor to EQ Financial Consultants, Inc.), an affiliate of
Equitable Life, and AXA Distributors, an indirect wholly
54 More information
owned subsidiary of Equitable Life, are registered with the SEC as broker
dealers and are members of the National Association of Securities Dealers, Inc.
Their principal business address is 1290 Avenue of the Americas, New York, NY
10104. Both broker dealers act as distributors for other Equitable Life annuity
products.
AXA Distributors is a successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. ("EDI"). Like AXA Distributors, EDI
was owned by Equitable Holdings, LLC.
The contracts are sold by financial professionals of AXA Advisors and its
affiliates and by financial professionals of AXA Distributors, as well as by
affiliated and unaffiliated broker dealers who have entered into selling
agreements with AXA Distributors.
We pay broker-dealer sales compensation that will generally not exceed an amount
equal to 6.5% of total contributions made under the contracts. AXA Distributors
may also receive compensation and reimbursement for its marketing services under
the terms of its distribution agreement with Equitable Life. Broker-dealers
receiving sales compensation will generally pay a portion of it to their
financial professionals as commissions related to sales of the contracts.
More information 55
9. Investment performance
- --------------------------------------------------------------------------------
The table below shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the withdrawal charges, the highest optional enhanced death benefit charge, the
optional Living Benefit charge, the optional charge for Protection Plus and the
annual administrative charge but does not reflect the charges designed to
approximate certain taxes that may be imposed on us, such as premium taxes in
your state or any applicable annuity administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not yet
commenced operations. For those periods, we have adjusted the results of the
portfolios to reflect the charges under the contracts that would have applied
had the investment option been available. The contracts will be offered for the
first time in 2002.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. The results shown for the EQ/Alliance Money Market
and EQ/Alliance Common Stock options for periods before March 22, 1985 reflect
the results of the variable investment options that preceded them. The "Since
portfolio inception" figures for these options are based on the date of
inception of the preceding variable investment options. We have adjusted these
results to reflect the maximum investment advisory fee payable for the
portfolios, as well as an assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and performance
information for these portfolios is not available as of the date of this
prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
56 Investment performance
TABLE
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- -------------------------------------------------------------------------------
EQ/Aggressive Stock (33.10)% (6.67)% ( 6.08)%
EQ/Alliance Common Stock (18.84)% 6.49% 7.32%
EQ/Alliance Global (28.25)% 0.56% 1.24%
EQ/Alliance Growth Investors (20.70)% 4.06% 4.47%
EQ/Alliance Money Market ( 4.70)% 1.61% 1.75%
EQ/Alliance Premier Growth (31.90)% -- (15.64)%
EQ/Alliance Small Cap Growth (21.30)% -- 6.05%
EQ/Alliance Technology (32.37)% -- (40.96)%
EQ/Bernstein Diversified Value ( 5.17)% -- 2.18%
EQ/Capital Guardian International (28.86)% -- ( 8.52)%
EQ/Capital Guardian Research (10.22)% -- ( 0.42)%
EQ/Capital Guardian U.S. Equity (10.21)% -- ( 2.57)%
EQ/Emerging Markets Equity (13.32)% -- ( 9.32)%
EQ/Equity 500 Index (20.24)% 6.74% 7.56%
EQ/Evergreen Omega (25.03)% -- (11.46)%
EQ/FI Mid Cap (21.48)% -- (16.83)%
EQ/FI Small/Mid Cap Value ( 4.28)% -- 2.01%
EQ/High Yield ( 7.54)% (3.73)% ( 2.92)%
EQ/International Equity Index (33.38)% -- ( 5.44)%
EQ/J.P. Morgan Core Bond ( 0.38)% -- 2.93%
EQ/Janus Large Cap Growth (30.91)% -- (34.85)%
EQ/Lazard Small Cap Value 9.30% -- 3.42%
EQ/Mercury Basic Value Equity ( 2.76)% -- 10.54%
EQ/MFS Emerging Growth Companies (41.87)% -- 6.15%
EQ/MFS Investors Trust (24.01)% -- ( 7.48)%
EQ/MFS Research (29.78)% -- 2.63%
EQ/Putnam Growth & Income Value (14.95)% -- 2.14%
EQ/Putnam International Equity (29.49)% -- 4.80%
EQ/Putnam Voyager (32.39)% -- 3.64%
EQ/Small Company Index ( 6.19)% -- 0.10%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- ----------------------------------------------------------------------------------------
EQ/Aggressive Stock (12.90)% (6.67)% 1.44% 9.40%
EQ/Alliance Common Stock ( 5.78)% 6.49% 9.89% 11.14%
EQ/Alliance Global ( 8.04)% 0.56% 5.88% 6.03%
EQ/Alliance Growth Investors ( 3.31)% 4.06% 6.32% 9.21%
EQ/Alliance Money Market 0.66% 1.61% 1.85% 3.77%
EQ/Alliance Premier Growth -- -- -- (15.64)%
EQ/Alliance Small Cap Growth 3.95% -- -- 6.05%
EQ/Alliance Technology -- -- -- (40.96)%
EQ/Bernstein Diversified Value ( 2.68)% -- -- 2.18%
EQ/Capital Guardian International -- -- -- ( 8.52)%
EQ/Capital Guardian Research -- -- -- ( 0.43)%
EQ/Capital Guardian U.S. Equity -- -- -- ( 2.57)%
EQ/Emerging Markets Equity ( 0.71)% -- -- (13.88)%
EQ/Equity 500 Index ( 5.92)% 6.74% -- 10.83%
EQ/Evergreen Omega (11.46)% -- -- (11.46)%
EQ/FI Mid Cap -- -- -- (17.48)%
EQ/FI Small/Mid Cap Value ( 0.51)% -- -- 0.29%
EQ/High Yield ( 8.43)% (3.73)% 4.25% 4.59%
EQ/International Equity Index (12.33)% -- -- ( 5.43)%
EQ/J.P. Morgan Core Bond 1.69% -- -- 2.93%
EQ/Janus Large Cap Growth -- -- -- (35.35)%
EQ/Lazard Small Cap Value 8.40% -- -- 3.42%
EQ/Mercury Basic Value Equity 7.99% -- -- 10.54%
EQ/MFS Emerging Growth Companies ( 6.73)% -- -- 6.15%
EQ/MFS Investors Trust ( 7.48)% -- -- ( 7.48)%
EQ/MFS Research ( 7.32)% -- -- 2.63%
EQ/Putnam Growth & Income Value ( 4.87)% -- -- 2.14%
EQ/Putnam International Equity ( 0.85)% -- -- 4.80%
EQ/Putnam Voyager (11.27)% -- -- 3.64%
EQ/Small Company Index 1.89% -- -- 0.10%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October 16,
1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Alliance Technology (May 1,
2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap Value and EQ/Janus Large Cap Growth
(September 5, 2000); EQ/Balanced (May 18, 2001); EQ/Calvert Socially
Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier VIP Core
Bond, AXA Premier VIP Health Care, AXA Premier VIP International Equity, AXA
Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA
Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA
Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology, EQ/Alliance
Growth and Income, EQ/Alliance International, EQ/Alliance Quality Bond,
EQ/AXP New Dimensions and EQ/AXP Strategy Aggressive (January 14, 2002);
EQ/Alliance Intermediate Government Securities (April 1, 2002). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
Investment performance 57
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
From time to time we may also advertise different measurements of the investment
performance of the variable investment options and/or the portfolios, including
the measurements that compare the performance to market indices that serve as
benchmarks. Market indices are not subject to any charges for investment
advisory fees, brokerage commissions or other operating expenses typically
associated with a managed portfolio. Also, they do not reflect other contract
charges such as the mortality and expense risks charge, administrative charge
and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use them
because they are widely known and may help you to understand the universe of
securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper, the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts. Lipper data provide a more accurate picture than market benchmarks of
the Equitable Accumulator(R) performance relative to other variable annuity
products. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges applicable
under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive of
capital changes, and then "annualized" (assuming that the same seven-day result
would occur each week for 52 weeks). Current yields for the EQ/Alliance Quality
Bond and EQ/High Yield options will be based on net changes in a hypothetical
investment over a given 30-day period, exclusive of capital changes, and then
"annualized" (assuming that the same 30-day result would occur each month for 12
months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality Bond and
EQ/High Yield Bond options. The current yields and effective yields assume the
deduction of all current contract charges and expenses other than the withdrawal
charge, the optional enhanced death benefit charge, the optional Living Benefit
charge, the optional Protection Plus benefit charge, the annual administrative
charge, and any charge designed to approximate certain taxes that may be imposed
on us, such as premium taxes in your state. The yields and effective yields for
the EQ/Alliance Money Market option, when used for the special dollar cost
averaging program, assume that no contract charges are deducted. For more
information, see "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option" in the SAI.
58 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31, 2001
is considered to be a part of this prospectus because it is incorporated by
reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is, or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 59
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 49 with the same daily asset charges of 1.20%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
----------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock
Unit value $ 52.44 $ 70.94 $ 82.86 $ 70.74 $ 71.57 $ 65.53
Number of units outstanding (000's) 153 185 213 266 279 9
EQ/Alliance Common Stock
Unit value $226.39 $ 256.74 $ 303.01 $ 245.58 $ 192.60 $ 151.23
Number of units outstanding (000's) 154 188 205 230 240 8
EQ/Alliance Global
Unit value $ 28.58 $ 36.27 $ 45.25 $ 33.15 $ 27.61 $ 25.12
Number of units outstanding (000's) 282 318 355 422 464 9
EQ/Alliance Growth Investors
Unit value $ 34.98 $ 40.53 $ 44.08 $ 35.33 $ 30.09 $ 26.15
Number of units outstanding (000's) 383 441 496 554 598 16
EQ/Alliance Money Market
Unit value $ 29.51 $ 28.84 $ 27.54 $ 26.62 $ 25.64 $ 24.68
Number of units outstanding (000's) 256 266 360 329 359 127
EQ/Alliance Premier Growth
Unit value $ 7.15 $ 9.52 $ 11.80 -- -- --
Number of units outstanding (000's) 89 114 79 -- -- --
EQ/Alliance Small Cap Growth
Unit value $ 14.38 $ 16.78 $ 14.94 $ 11.85 $ 12.55 --
Number of units outstanding (000's) 105 191 50 102 89 --
EQ/Alliance Technology
Unit value $ 4.94 $ 6.62 -- -- -- --
Number of units outstanding (000's) 51 66 -- -- -- --
EQ/Bernstein Diversified Value
Unit value $ 11.97 $ 11.75 $ 12.13 $ 11.86 -- --
Number of units outstanding (000's) 114 54 46 22 -- --
EQ/Calvert Socially Responsible
Unit value $ 8.70 -- -- -- -- --
Number of units outstanding (000's) -- -- -- -- -- --
EQ/Capital Guardian International
Unit value $ 8.73 $ 11.17 $ 13.97 -- -- --
Number of units outstanding (000's) 26 23 15 -- -- --
EQ/Capital Guardian Research
Unit value $ 10.76 $ 11.12 $ 10.62 -- -- --
Number of units outstanding (000's) 17 10 3 -- -- --
EQ/Capital Guardian U. S. Equity
Unit value $ 10.20 $ 10.53 $ 10.29 -- -- --
Number of units outstanding (000's) 59 8 7 -- -- --
EQ/Emerging Markets Equity
Unit value $ 6.15 $ 6.56 $ 11.08 $ 5.73 -- --
Number of units outstanding (000's) 43 55 52 16 -- --
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
----------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index
Unit value $ 24.71 $ 28.47 -- -- -- --
Number of units outstanding (000's) 71 78 -- -- -- --
EQ/FI /Mid Cap
Unit value $ 8.56 $ 10.00 -- -- -- --
Number of units outstanding (000's) 19 7 -- -- -- --
EQ/FI Small/Mid Cap Value
Unit value $ 11.28 $ 10.98 -- -- -- --
Number of units outstanding (000's) 37 9 -- -- -- --
EQ/High Yield
Unit value $ 24.29 $ 24.42 $ 27.13 $ 28.48 $ 30.46 $ 26.09
Number of units outstanding (000's) 221 260 329 422 439 24
EQ/International Equity Index
Unit value $ 8.96 $ 12.16 $ 14.94 $ 11.87 -- --
Number of units outstanding (000's) 21 19 51 9 -- --
EQ/J.P. Morgan Core Bond
Unit value $ 12.30 $ 11.54 $ 10.47 $ 10.77 -- --
Number of units outstanding (000's) 280 141 139 98 -- --
EQ/Janus Large Cap Growth
Unit value $ 6.39 $ 8.40 -- -- -- --
Number of units outstanding (000's) 20 29 -- -- -- --
EQ/Lazard Small Cap Value
Unit value $ 12.57 $ 10.81 $ 9.23 $ 9.18 -- --
Number of units outstanding (000's) 111 41 20 26 -- --
EQ/Marisco Focus
Unit value $ 11.35 -- -- -- -- --
Number of units outstanding (000's) 2 -- -- -- -- --
EQ/MFS Emerging Growth Companies
Unit value $ 14.47 $ 22.21 $ 27.70 $ 16.14 $ 12.14 --
Number of units outstanding (000's) 147 214 227 176 149 --
EQ/MFS Investors Trust
Unit value $ 8.75 $ 10.54 $ 10.74 -- -- --
Number of units outstanding (000's) 77 42 31 -- -- --
EQ/MFS Research
Unit value $ 12.41 $ 16.07 $ 17.17 $ 14.12 $ 11.51 --
Number of units outstanding (000's) 256 314 332 356 263 --
EQ/Putnam Growth & Income Value
Unit value $ 12.16 $ 13.21 $ 12.52 $ 12.85 $ 11.53 --
Number of units outstanding (000's) 324 341 423 506 383 --
EQ/Putnam International Equity
Unit value $ 13.65 $ 17.60 $ 20.32 $ 12.83 $ 10.87 --
Number of units outstanding (000's) 154 182 199 190 187 --
EQ/Putnam Investors Growth
Unit value $ 13.00 $ 17.41 $ 21.43 $ 16.65 $ 12.37 --
Number of units outstanding (000's) 193 235 245 160 124 --
EQ/Small Company Index
Unit value $ 11.07 $ 10.99 $ 11.51 $ 9.65 -- --
Number of units outstanding (000's) 23 18 18 18 -- --
A-2 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R) QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the federal income tax rules. The QP contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
Assuming continued plan qualification and operation, earnings on qualified plan
assets will accumulate value on a tax-deferred basis even if the plan is not
funded by the Equitable Accumulator(R) QP contract or another annuity.
Therefore, you should purchase an Equitable Accumulator(R) QP contract to fund a
plan for the contract's features and benefits other than tax deferral, after
considering the relative costs and benefits of annuity contracts and other types
of arrangements and funding vehicles. This QP contract accepts transfer
contributions only and not regular, ongoing payroll contributions. For 401(k)
plans under defined contribution plans, no employee after-tax contributions are
accepted.
We will not accept defined benefit plans. For defined contribution plans, we
will only accept transfers from another defined contribution plan or a change of
investment vehicles in the plan. Only one additional transfer contribution may
be made per contract year. If overfunding of a plan occurs or amounts
attributable to an excess contribution must be withdrawn, withdrawals from the
QP contract may be required. A withdrawal charge and/or market value adjustment
may apply.
Equitable Life will not perform or provide any plan recordkeeping services with
respect to the QP contracts. The plan's administrator will be solely responsible
for performing or providing for all such services. There is no loan feature
offered under the QP contracts, so if the plan provides for loans and a
participant/employee takes a loan from the plan, other plan assets must be used
as the source of the loan and any loan repayments must be credited to other
investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70-1/2; and
o the guaranteed minimum income benefit under Living Benefit may not be an
appropriate feature for annuitants who are older than age 601/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution, and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age requirements,
plan trustees should discuss with their advisers whether the purchase of the QP
contract would cause the plan to engage in prohibited discrimination in
contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2003 to a fixed maturity option with a maturity date of February
15, 2012 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value of $183,914 on the maturity date. We further
assume that a withdrawal of $50,000 is made four years later on February 15,
2007.
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical Assumed rate to maturity on
February 15, 2007
-----------------------------------------------------------------------
5.00% 9.00%
- ------------------------------------------------------------------------------------------------------------------------------------
As of February 15, 2007 (before withdrawal)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,082 $ 119,503
- ------------------------------------------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,104 $ 131,104
- ------------------------------------------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,978 $ (11,601)
- ------------------------------------------------------------------------------------------------------------------------------------
On February 15, 2007 (after withdrawal)
- ------------------------------------------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,504 $ (4,854)
- ------------------------------------------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,496 $ 54,854
- ------------------------------------------------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,608 $ 76,250
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(7) Maturity value $120,091 $ 106,965
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(8) Market adjusted amount of (7) $ 94,082 $ 69,503
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You should note that under this example, if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized. The market value adjustment is computed
differently if you withdraw amounts on a date other than the anniversary of the
establishment of the fixed maturity option.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Appendix IV: Enhanced death benefit example
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The death benefit under the contracts is equal to the account value or, if
greater, the enhanced death benefit, if elected. The following illustrates the
enhanced death benefit calculation. Assuming $100,000 is allocated to the
variable investment options (with no allocation to the EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market, the guaranteed interest option
or the fixed maturity options), no additional contributions, no transfers, no
withdrawals and no loans under a Rollover TSA contract, the enhanced death
benefit for an annuitant age 45 would be calculated as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
End of 6% roll up to age 85 Annual ratchet to age 85
contract enhanced enhanced
year Account value death benefit(1) death benefit
- ------------------------------------------------------------------------------------------------------------------------------------
1 $105,000 $ 106,000(1) $ 105,000(3)
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2 $115,500 $ 112,360(2) $ 115,500(3)
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3 $129,360 $ 119,102(2) $ 129,360(3)
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4 $103,488 $ 126,248(1) $ 129,360(4)
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5 $113,837 $ 133,823(1) $ 129,360(4)
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6 $127,497 $ 141,852(1) $ 129,360(4)
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7 $127,497 $ 150,363(1) $ 129,360(4)
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The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
6% ROLL-UP TO AGE 85
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the enhanced death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current enhanced death benefit.
ANNUAL RATCHET TO AGE 85
(3) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(4) At the end of contract years 4 through 7, the enhanced death benefit is the
enhanced death benefit at the end of the prior year since it is equal to or
higher than the current account value.
GREATER OF THE 6% ROLL-UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85
The enhanced death benefit under this option for each year shown would be the
greater of the amounts shown under the 6% roll-up to age 85 or the Annual
ratchet to age 85.
Appendix IV: Enhanced death benefit example D-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option, EQ/Alliance
Quality Bond Option and EQ/High Yield Option 23
Distribution of the contracts 25
Financial Statements 25
How to Obtain an Equitable Accumulator(R) Statement of Additional Information
for Separate Account No. 49
Send this request form to:
Equitable Accumulator(R)
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- --------------------------------------------------------------------------------
Please send me an Equitable Accumulator(R) SAI for Separate Account No. 49
dated May 1, 2002.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
(SAI 13AMLF(5/02))
X00281/Core New Series
2002 Portfolio
Equitable Accumulator(R) Plus(SM)
A variable deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) PLUS(SM)?
Equitable Accumulator(R) Plus(SM) is a deferred annuity contract issued by The
Equitable Life Assurance Society of the United States. It provides for the
accumulation of retirement savings and for income. The contract offers death
benefit protection and a number of payout options. You invest to accumulate
value on a tax-deferred basis in one or more of our variable investment
options, the guaranteed interest option or fixed maturity options ("investment
options"). This contract may not currently be available in all states. Certain
features and benefits described in this prospectus may vary in your state; all
features and benefits may not be available in all states.
- --------------------------------------------------------------------------------
Variable investment options
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Value* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Small/Mid Cap o EQ/Emerging Markets Equity
Growth* o EQ/Equity 500 Index
o AXA Premier VIP Small/Mid Cap Value* o EQ/Evergreen Omega
o AXA Premier VIP Technology* o EQ/FI Mid Cap
o EQ/Aggressive Stock o EQ/FI Small/Mid Cap Value
o EQ/Alliance Common Stock o EQ/High Yield(1)
o EQ/Alliance Global o EQ/International Equity Index
o EQ/Alliance Growth and Income o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth Investors o EQ/Janus Large Cap Growth
o EQ/Alliance Intermediate Government o EQ/Lazard Small Cap Value
Securities* o EQ/Marsico Focus*
o EQ/Alliance International o EQ/Mercury Basic Value Equity
o EQ/Alliance Money Market o EQ/MFS Emerging Growth Companies
o EQ/Alliance Premier Growth o EQ/MFS Investors Trust
o EQ/Alliance Quality Bond o EQ/MFS Research
o EQ/Alliance Small Cap Growth o EQ/Putnam Growth & Income Value
o EQ/Alliance Technology o EQ/Putnam International Equity
o EQ/AXP New Dimensions** o EQ/Putnam Voyager(2)
o EQ/AXP Strategy Aggressive** o EQ/Small Company Index
- --------------------------------------------------------------------------------
* Subject to state availability
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"). Your
investment results in a variable investment option will depend on the
investment performance of the related portfolio.
GUARANTEED INTEREST OPTION. You may allocate amounts to the guaranteed interest
option. This option is part of our general account and pays interest at
guaranteed rates.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An annuity that is an investment vehicle for a qualified defined contribution
plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $10,000 is required to purchase a contract. We add
an amount ("credit") to your contract with each contribution you make. Expenses
for this contract may be higher than for a comparable contract without a
credit. Over time, the amount of the credit may be more than offset by fees and
charges associated with the credit.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
processing office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be
obtained from the SEC's Web site at http://www.sec.gov. The table of contents
for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
X00292/Plus New Series 2002 Portfolio
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) PLUS(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Plus(SM) at a glance -- key features 8
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FEE TABLE 10
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Examples 13
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 22
Credits 23
Your benefit base 24
Annuity purchase factors 24
Our Living Benefit option 24
Guaranteed minimum death benefit 25
Your right to cancel within a certain number of days 26
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 28
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Your account value and cash value 28
Your contract's value in the variable investment options 28
Your contract's value in the guaranteed interest option 28
Your contract's value in the fixed maturity options 28
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG THE VARIABLE INVESTMENT OPTIONS 29
- --------------------------------------------------------------------------------
Transferring your account value 29
Disruptive transfer activity 29
Rebalancing your account value 29
- ----------------------
"We," "our," and "us" refer to Equitable Life. When we use the word "contract"
it also includes certificates that are issued under group contracts in some
states.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 31
- --------------------------------------------------------------------------------
Withdrawing your account value 31
How withdrawals are taken from your account value 32
How withdrawals affect your guaranteed
minimum income benefit and guaranteed
minimum death benefit 32
Loans under rollover TSA contracts 32
Surrendering your contract to receive its cash value 33
When to expect payments 33
Your annuity payout options 33
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5. CHARGES AND EXPENSES 36
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Charges that Equitable Life deducts 36
Charges that the Trusts deduct 38
Group or sponsored arrangements 38
Other distribution arrangements 38
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6. PAYMENT OF DEATH BENEFIT 39
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Your beneficiary and payment of benefit 39
How death benefit payment is made 39
Beneficiary continuation option 40
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7. TAX INFORMATION 41
- --------------------------------------------------------------------------------
Overview 41
Buying a contract to fund a retirement arrangement 41
Transfers among variable investment options 41
Taxation of nonqualified annuities 41
Individual retirement arrangements (IRAs) 43
Contributions 43
Withdrawals and distributions 44
Special rules for contracts funding qualified plans 44
Tax Sheltered Annuity contracts (TSAs) 44
Federal and state income tax withholding and information
reporting 46
Impact of taxes to Equitable Life 47
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8. MORE INFORMATION 48
- --------------------------------------------------------------------------------
About Separate Account No. 49 48
About the Trusts 48
About our fixed maturity options 48
About the general account 49
About other methods of payment 50
Dates and prices at which contract events occur 50
About your voting rights 50
About legal proceedings 51
About our independent accountants 51
Financial statements 51
Transfers of ownership, collateral assignments, loans
and borrowing 51
Distribution of the contracts 51
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9. INVESTMENT PERFORMANCE 53
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Communicating performance data 55
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10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 57
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APPENDICES
- --------------------------------------------------------------------------------
I -- Purchase considerations for QP contracts A-1
II -- Market value adjustment example B-1
III -- Guaranteed enhanced death benefit example C-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
Page
account value 28
annuitant 15
annuity payout options 33
beneficiary 39
benefit base 24
business day 50
cash value 28
contract date 9
contract date anniversary 9
contract year 9
contributions to traditional IRAs 43
regular contributions 43
rollovers and transfers 44
credit 23
disruptive transfer activity 29
EQAccess 6
ERISA 32
fixed maturity options 21
guaranteed interest option 21
guaranteed minimum death benefit 25
guaranteed minimum income benefit 24
IRA cover
IRS 41
Living Benefit 24
Page
loan reserve account 32
market adjusted amount 21
market value adjustment 21
market timing 29
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 43
SAI cover
SEC cover
TOPS 6
TSA cover
traditional IRA 43
Trusts cover
unit 28
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract or supplemental materials.
- --------------------------------------------------------------------------------
Prospectus Contract or Supplemental Materials
- --------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
Living Benefit Guaranteed Minimum Income Benefit
Guaranteed Interest Option Guaranteed Interest Account
- --------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
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FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the variable
investment options;
o change your personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our web site at http:// www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional (AXA
Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between variable investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Plus(SM) at a glance -- key features
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Professional investment Equitable Accumulator(R) Plus(SM) variable investment options invest in different portfolios managed by
management professional investment advisers.
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed maturity options o Fixed maturity options ("FMOs") with maturities ranging from approximately 1 to 10 years (subject
to availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
-------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any
value that you have left in that fixed maturity option. If you surrender your contract, a market
value adjustment may also apply.
- -----------------------------------------------------------------------------------------------------------------------------------
Guaranteed interest o Principal and interest guarantees.
option
o Interest rates set periodically.
- -----------------------------------------------------------------------------------------------------------------------------------
Tax advantages o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among variable investment options.
contract
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If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA) or Tax Sheltered
Annuity (TSA), or to fund an employer retirement plan (QP or Qualified Plan), you should be aware
that such annuities do not provide tax deferral benefits beyond those already provided by the
Internal Revenue Code. Before purchasing one of these annuities, you should consider whether its
features and benefits beyond tax deferral meet your needs and goals. You may also want to consider
the relative features, benefits and costs of these annuities compared with any other investment that
you may use in connection with your retirement plan or arrangement. (For more information, see "Tax
information," later in this Prospectus and in the SAI.)
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Living Benefit protection Living Benefit provides a guaranteed minimum income benefit. The guaranteed minimum income benefit
provides income protection for you while the annuitant lives.
- -----------------------------------------------------------------------------------------------------------------------------------
Contribution amounts o Initial minimum: $10,000
o Additional minimum: $500
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
-------------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- -----------------------------------------------------------------------------------------------------------------------------------
Credit We allocate your contributions to your account value. We allocate a credit to your account value at
the same time that we allocate your contributions. The amount of credit may be up to 6% of each
contribution, depending on certain factors. The credit is subject to recovery by us in certain
limited circumstances.
- -----------------------------------------------------------------------------------------------------------------------------------
Access to your money o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract. You may
also incur income tax and a tax penalty.
- -----------------------------------------------------------------------------------------------------------------------------------
Payout options o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
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8 Equitable Accumulator(R) Plus(SM) at a glance -- key features
- -----------------------------------------------------------------------------------------------------------------------------------
Additional features o Guaranteed minimum death benefit options
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing home
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
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Fees and charges o Daily charges on amounts invested in the variable investment options for mortality and expense
risks, administrative, and distribution charges at an annual rate of 1.40%.
o The charges for the guaranteed minimum death benefits range from 0.0% to 0.45%, annually, of the
applicable benefit base. The benefit base is described under "Your benefit base" in "Contract
features and benefits" later in this Prospectus.
o Annual 0.35% Protection Plus charge for this optional death benefit.
o Annual 0.45% of the applicable benefit base charge for the optional Living Benefit until you
exercise your guaranteed minimum income benefit, elect another annuity payout or the contract
date anniversary after the annuitant reaches age 85, whichever occurs first.
o If your account value at the end of the contract year is less than $50,000, we deduct an annual
administrative charge equal to $30 or during the first two contract years 2% of your account
value, if less. If your account value, on the contract date anniversary, is $50,000 or more, we
will not deduct the charge.
o No sales charge deducted at the time you make contributions.
o During the first eight contract years following a contribution, a charge will be deducted from
amounts that you withdraw that exceed 15% of your account value. We use the account value on the
most recent contract date anniversary to calculate the 15% amount available. The charge is 8% in
each of the first two contract years following a contribution; the charge is 7% in the third and
fourth contract years following a contribution; thereafter, it declines by 1% each year in the
fifth to eighth contract year following a contribution. There is no withdrawal charge in the
ninth and later contract years following a contribution. Certain other exemptions apply.
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The "contract date" is the effective date of a contract. This usually is the business day we receive
the properly completed and signed application, along with any other required documents, and your
initial contribution. Your contract date will be shown in your contract. The 12-month period
beginning on your contract date and each 12-month period after that date is a "contract year." The
end of each 12-month period is your "contract date anniversary."
------------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. This charge is generally deducted from the amount applied to an
annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate
Annuity payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses include management fees ranging from 0.25% to
1.20% annually, 12b-1 fees of 0.25% annually and other expenses.
- -----------------------------------------------------------------------------------------------------------------------------------
Annuitant issue ages NQ: 0-80
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-80
QP: 20-70
- -----------------------------------------------------------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your financial professional
can show you information regarding other Equitable Life annuity contracts that
he or she distributes. You can also contact us to find out more about any of
the Equitable Life annuity contracts.
Equitable Accumulator(R) Plus(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this Prospectus.
The fixed maturity options and the guaranteed interest option are not covered
by the fee table and examples. However, the annual administrative charge and
the withdrawal charge do apply to the fixed maturity options and the guaranteed
interest option. A market value adjustment (up or down) may apply as a result
of a withdrawal, transfer, or surrender of amounts from a fixed maturity
option.
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your variable investment options expressed as an annual percentage of daily net assets
- ----------------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks 0.90%*
Administrative 0.25%
Distribution 0.25%
-----
Total annual expenses 1.40%
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value on each contract date anniversary
- ----------------------------------------------------------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary is less than
$50,000(1) $ 30
If your account value on a contract date anniversary is $50,000
or more $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- ----------------------------------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions withdrawn* Contract year
(deducted if you surrender your contract or make certain withdrawals. 1 ......................8.00%
The withdrawal charge percentage we use is determined by the con- 2 ......................8.00%
tract year in which you make the withdrawal or surrender your 3 ......................7.00%
contract. For each contribution, we consider the contract year in which 4 ......................7.00%
we receive that contribution to be "contract year 1")(2) 5 ......................6.00%
6 ......................5.00%
7 ......................4.00%
8 ......................3.00%
9+ .....................0.00%
Charge if you elect a Variable Immediate Annuity payout option $ 350
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value each year if you elect the optional benefit
- ----------------------------------------------------------------------------------------------------------------------------------
Guaranteed minimum death benefit charge (calculated as a
percentage of the applicable benefit base. Deducted annually on each
contract date anniversary.)
Standard death benefit 0.00 %
Annual Ratchet to age 85 0.20% of the Annual Ratchet to age 85 benefit base
6% Roll-up to age 85 0.35% of the 6% roll-up to age 85 benefit base
Greater of 6% Roll-up to age 85 or Annual Ratchet to age 85 0.45% of the greater of the 6% roll-up to age 85
benefit base or the
Annual Ratchet to age 85 benefit base, as applicable
- ----------------------------------------------------------------------------------------------------------------------------------
Living Benefit charge (calculated as a percentage of the applicable
benefit base. Deducted annually on each contract date anniversary.) 0.45 %
- ----------------------------------------------------------------------------------------------------------------------------------
Protection Plus benefit charge (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary.) 0.35 %
* These charges compensate us for certain risks we assume and expenses we incur
under the contract. They also compensate us for the expense associated with
the credit. We expect to make a profit from these charges.
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- --------------------------------------------------------------------------------------------------------------------------------
Net
total annual
Management Fees Other expenses expenses (After
(After expense (After expense expense
Portfolio Name limitation)(3) 12b-1 Fees(4) limitation)(5) limitation)(6)
- --------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- --------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- --------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- --------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- --------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(2) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount and upon surrender of a contract.
(3) The management fees for each portfolio cannot be increased without a vote
of each portfolio's shareholders. See footnote (6) for any expense
limitation agreement information.
Fee table 11
(4) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Also, initial seed capital was invested for the
Portfolios of the AXA Premier VIP Trust on December 31, 2001, thus, "Other
Expenses" shown are estimated. See footnote (6) for any expense limitation
agreement information.
(6) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- ----------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ----------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- ----------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ----------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- ----------------------------------------------------------------------------
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- ----------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- ----------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected Living Benefit, the enhanced death benefit option based on the
greater of the 6% roll up to age 85 or the Annual Ratchet to age 85 and
Protection Plus) would pay in the situation illustrated. We assume that a
$1,000 contribution plus a $40 credit (which may be subject to recovery) is
invested in one of the variable investment options listed and a 5% annual
return is earned on the assets in that option.(1) The annual administrative
charge is based on the charges that apply to a mix of estimated contract sizes,
resulting in an estimated administrative charge for the purpose of these
examples of $0.13 per $1,000.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods (as applicable) included in the
examples.
The example should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
- -----------------------------------------------------------------------------------------
If you surrender your contract at the end
of each period shown, the expenses
would be:
--------------------------------------------------
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 109.62 $ 180.35 $ 254.95 $ 424.78
AXA Premier VIP Health Care $ 119.45 $ 209.06 $ 301.41 $ 510.04
AXA Premier VIP International Equity $ 118.90 $ 207.48 $ 298.88 $ 505.51
AXA Premier VIP Large Cap Core Equity $ 113.99 $ 193.18 $ 275.83 $ 463.67
AXA Premier VIP Large Cap Growth $ 113.99 $ 193.18 $ 275.83 $ 463.67
AXA Premier VIP Large Cap Value $ 113.99 $ 193.18 $ 275.83 $ 463.67
AXA Premier VIP Small/Mid Cap Growth $ 116.72 $ 201.14 $ 288.69 $ 487.16
AXA Premier VIP Small/Mid Cap Value $ 116.72 $ 201.14 $ 288.69 $ 487.16
AXA Premier VIP Technology $ 119.45 $ 209.06 $ 301.41 $ 510.04
EQ/Aggressive Stock $ 109.51 $ 180.03 $ 254.43 $ 423.78
EQ/Alliance Common Stock $ 107.76 $ 174.87 $ 245.97 $ 407.75
EQ/Alliance Global $ 111.26 $ 185.17 $ 262.83 $ 439.56
EQ/Alliance Growth and Income $ 108.85 $ 178.10 $ 251.26 $ 417.80
EQ/Alliance Growth Investors $ 108.85 $ 178.10 $ 251.26 $ 417.80
EQ/Alliance Intermediate Government
Securities $ 108.75 $ 177.77 $ 250.73 $ 416.80
EQ/Alliance International $ 113.99 $ 193.18 $ 275.83 $ 463.67
EQ/Alliance Money Market $ 106.34 $ 170.66 $ 239.05 $ 394.52
EQ/Alliance Premier Growth $ 111.80 $ 186.78 $ 265.44 $ 444.43
EQ/Alliance Quality Bond $ 108.53 $ 177.13 $ 249.68 $ 414.80
EQ/Alliance Small Cap Growth $ 110.82 $ 183.89 $ 260.73 $ 435.64
EQ/Alliance Technology $ 111.80 $ 186.78 $ 265.44 $ 444.43
EQ/AXP New Dimensions $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/AXP Strategy Aggressive $ 110.16 $ 181.96 $ 257.58 $ 429.73
EQ/Balanced $ 109.07 $ 178.74 $ 252.32 $ 419.80
EQ/Bernstein Diversified Value $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/Calvert Socially Responsible $ 110.71 $ 183.57 $ 260.21 $ 434.66
EQ/Capital Guardian International $ 112.35 $ 188.38 $ 268.04 $ 449.28
EQ/Capital Guardian Research $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/Capital Guardian U.S. Equity $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/Emerging Markets Equity $ 118.90 $ 207.48 $ 298.88 $ 505.51
EQ/Equity 500 Index $ 105.36 $ 167.74 $ 234.24 $ 385.26
EQ/Evergreen Omega $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/FI Mid Cap $ 110.16 $ 181.96 $ 257.58 $ 429.73
EQ/FI Small/Mid Cap Value $ 111.26 $ 185.17 $ 262.83 $ 439.56
EQ/High Yield $ 109.29 $ 179.39 $ 253.37 $ 421.79
EQ/International Equity Index $ 111.26 $ 185.17 $ 262.83 $ 439.56
EQ/J.P. Morgan Core Bond $ 107.98 $ 175.51 $ 247.03 $ 409.77
EQ/Janus Large Cap Growth $ 111.80 $ 186.78 $ 265.44 $ 444.43
EQ/Lazard Small Cap Value $ 111.26 $ 185.17 $ 262.83 $ 439.56
EQ/Marsico Focus $ 111.80 $ 186.78 $ 265.44 $ 444.43
EQ/Mercury Basic Value Equity $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/MFS Emerging Growth Companies $ 109.84 $ 181.00 $ 256.01 $ 426.76
EQ/MFS Investors Trust $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/MFS Research $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/Putnam Growth & Income Value $ 109.62 $ 180.35 $ 254.95 $ 424.78
EQ/Putnam International Equity $ 112.89 $ 189.98 $ 270.65 $ 454.10
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
If you do not surrender your contract at
the end of each period shown, the
expenses would be:
--------------------------------------------------
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 29.62 $ 110.35 $ 194.95 $ 424.78
AXA Premier VIP Health Care $ 39.45 $ 139.06 $ 241.41 $ 510.04
AXA Premier VIP International Equity $ 38.90 $ 137.48 $ 238.88 $ 505.51
AXA Premier VIP Large Cap Core Equity $ 33.99 $ 123.18 $ 215.83 $ 463.67
AXA Premier VIP Large Cap Growth $ 33.99 $ 123.18 $ 215.83 $ 463.67
AXA Premier VIP Large Cap Value $ 33.99 $ 123.18 $ 215.83 $ 463.67
AXA Premier VIP Small/Mid Cap Growth $ 36.72 $ 131.14 $ 228.69 $ 487.16
AXA Premier VIP Small/Mid Cap Value $ 36.72 $ 131.14 $ 228.69 $ 487.16
AXA Premier VIP Technology $ 39.45 $ 139.06 $ 241.41 $ 510.04
EQ/Aggressive Stock $ 29.51 $ 110.03 $ 194.43 $ 423.78
EQ/Alliance Common Stock $ 27.76 $ 104.87 $ 185.97 $ 407.75
EQ/Alliance Global $ 31.26 $ 115.17 $ 202.83 $ 439.56
EQ/Alliance Growth and Income $ 28.85 $ 108.10 $ 191.26 $ 417.80
EQ/Alliance Growth Investors $ 28.85 $ 108.10 $ 191.26 $ 417.80
EQ/Alliance Intermediate Government
Securities $ 28.75 $ 107.77 $ 190.73 $ 416.80
EQ/Alliance International $ 33.99 $ 123.18 $ 215.83 $ 463.67
EQ/Alliance Money Market $ 26.34 $ 100.66 $ 179.05 $ 394.52
EQ/Alliance Premier Growth $ 31.80 $ 116.78 $ 205.44 $ 444.43
EQ/Alliance Quality Bond $ 28.53 $ 107.13 $ 189.68 $ 414.80
EQ/Alliance Small Cap Growth $ 30.82 $ 113.89 $ 200.73 $ 435.64
EQ/Alliance Technology $ 31.80 $ 116.78 $ 205.44 $ 444.43
EQ/AXP New Dimensions $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/AXP Strategy Aggressive $ 30.16 $ 111.96 $ 197.58 $ 429.73
EQ/Balanced $ 29.07 $ 108.74 $ 192.32 $ 419.80
EQ/Bernstein Diversified Value $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/Calvert Socially Responsible $ 30.71 $ 113.57 $ 200.21 $ 434.66
EQ/Capital Guardian International $ 32.35 $ 118.38 $ 208.04 $ 449.28
EQ/Capital Guardian Research $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/Capital Guardian U.S. Equity $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/Emerging Markets Equity $ 38.90 $ 137.48 $ 238.88 $ 505.51
EQ/Equity 500 Index $ 25.36 $ 97.74 $ 174.24 $ 385.26
EQ/Evergreen Omega $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/FI Mid Cap $ 30.16 $ 111.96 $ 197.58 $ 429.73
EQ/FI Small/Mid Cap Value $ 31.26 $ 115.17 $ 202.83 $ 439.56
EQ/High Yield $ 29.29 $ 109.39 $ 193.37 $ 421.79
EQ/International Equity Index $ 31.26 $ 115.17 $ 202.83 $ 439.56
EQ/J.P. Morgan Core Bond $ 27.98 $ 105.51 $ 187.03 $ 409.77
EQ/Janus Large Cap Growth $ 31.80 $ 116.78 $ 205.44 $ 444.43
EQ/Lazard Small Cap Value $ 31.26 $ 115.17 $ 202.83 $ 439.56
EQ/Marsico Focus $ 31.80 $ 116.78 $ 205.44 $ 444.43
EQ/Mercury Basic Value Equity $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/MFS Emerging Growth Companies $ 29.84 $ 111.00 $ 196.01 $ 426.76
EQ/MFS Investors Trust $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/MFS Research $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/Putnam Growth & Income Value $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/Putnam International Equity $ 32.89 $ 119.98 $ 210.65 $ 454.10
- -----------------------------------------------------------------------------------------
Fee table
13
- ----------------------------------------------------------------------------------------------------------------------------------
If you surrender your contract at the end If you do not surrender your contract at
of each period shown, the expenses the end of each period shown, the
would be: expenses would be:
---------------------------------------------------- ----------------------------------------------------
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager $ 109.62 $ 180.35 $ 254.95 $ 424.78 $ 29.62 $ 110.35 $ 194.95 $ 424.78
EQ/Small Company Index $ 108.53 $ 177.13 $ 249.68 $ 414.80 $ 28.53 $ 107.13 $ 189.68 $ 414.80
- ----------------------------------------------------------------------------------------------------------------------------------
(1) The amount accumulated from the $1,000 contribution plus the $40 credit
could not be paid in the form of an annuity payout option at the end of
any of the periods shown in the examples. This is because if the amount
applied to purchase an annuity payout option is less than $2,000, or the
initial payment is less than $20, we may pay the amount to you in a single
sum instead of as payments under an annuity payout option. See "Accessing
your money" later in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
examples for "if you do not surrender your contract" would, in each case, be
increased by $5.44 based on the average amount applied to annuity payout
options in 2001. See "Annuity administrative fee" in "Charges and expenses"
later in this Prospectus.
14 Fee table
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $10,000 for you
to purchase a contract. You may make additional contributions of at least $500
each, subject to limitations noted below. The following table summarizes our
rules regarding contributions to your contract. All ages in the table refer to
the age of the annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Limitations on
Contract type issue ages Source of contributions contributions
- ----------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 80 o After-tax money. o No additional contributions after age 81.
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue
Code.
- ----------------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 80 o Eligible rollover distributions from TSA o No contributions after age 81.
contracts or other 403(b) arrangements,
qualified plans, and governmental EDC o Contributions after age 70-1/2 must be net of
plans. required minimum distributions.
o Rollovers from another traditional indi- o Although we accept regular IRA contribu-
vidual retirement arrangement. tions (limited to $3,000 for the calendar
year 2002) under Rollover IRA contracts, we
o Direct custodian-to-custodian transfers intend that this contract be used primarily
from another traditional individual retire- for rollover and direct transfer contributions.
ment arrangement.
o Additional catch-up contributions totalling
o Regular IRA contributions. up to $500 can be made for the calendar
year 2002 where the owner is at least age
o For the calendar year 2002 and later, addi- 50 but under age 70-1/2 at any time during
tional "catch-up" contributions. 2002.
- ----------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 80 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA contributions after age 81.
o Conversion rollovers from a traditional
IRA. o Conversion rollovers after age 70-1/2 must be
net of required minimum distributions for
o Direct transfers from another Roth IRA. the traditional IRA you are rolling over.
o Regular Roth IRA contributions. o You cannot roll over funds from a traditional
IRA if your adjusted gross income is
o For the calendar year 2002 and later, addi- $100,000 or more.
tional catch-up contributions.
o Although we accept regular Roth IRA con-
tributions (limited to $3,000 for the
calendar year 2002 ) under the Roth IRA
contracts, we intend that this contract be
used primarily for rollover and direct trans-
fer contributions.
o Additional catch-up contributions totalling
up to $500 can be made for the calendar
year 2002 where the owner is at least age
50 at any time during 2002.
- ----------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
Available
for annuitant
Contract type issue ages
- ----------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 80
This contract may not be available in your state.
QP 20 through 70
See Appendix I at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Limitations on
Contract type Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------
Rollover TSA o Direct transfers of pre-tax funds from another o Additional rollover or direct transfer contribu-
contract or arrangement under Section 403(b) tions may be made up to age 81.
of the Internal Revenue Code, complying with
IRS Revenue Ruling 90-24. o Rollover or direct transfer contributions after age
70-1/2 must be net of any required minimum
o Eligible rollover distributions of pre-tax funds distributions.
from other 403(b) plans, qualified plans, govern-
mental EDC plans and traditional IRAs. o Ongoing payroll contributions are not permitted.
o Employer-remitted contributions are not permitted.
- ------------------------------------------------------------------------------------------------------------------------------
QP o Only transfer contributions from an existing o Regular ongoing payroll contributions are not
defined contribution qualified plan trust as a permitted.
change of investment vehicle under the plan.
o Only one additional transfer contribution may be
o The plan must be qualified under Section 401(a) made during a contract year.
of the Internal Revenue Code.
o No additional transfer contributions after age 71.
o For 401(k) plans, transferred contributions may
only include employee pre-tax contributions.
- ------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R)Plus(SM) contracts with the same
annuitant would then total more than $1,500,000. We reserve the right to limit
aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant. This
option may not be available under your contract.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix I at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A participant is an individual who is currently, or was formerly, participating
in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the guaranteed
interest option and the fixed maturity options.
VARIABLE INVESTMENT OPTIONS. Your investment results in any one of the variable
investment options will depend on the investment performance of the underlying
portfolios. You can lose your principal when investing in the variable
investment options. In periods of poor market performance, the net return,
after charges and expenses, may result in negative yields, including for the
EQ/Alliance Money Market variable investment option. Listed below are the
currently available portfolios, their investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options, the guaranteed
interest option and the fixed maturity options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
Portfolios of the Trusts
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Plus.(SM) These portfolios may even have the same manager(s) and/or a similar
name. However, there are numerous factors that can contribute to differences in
performance between two investments, particularly over short periods of time.
Such factors include the timing of stock purchases and sales; differences in
fund cash flows; and specific strategies employed by the portfolio manager.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital appreciation Pacific Investment Management Company LLC
consistent with a prudent level of risk
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P.,
Equity* through its Bernstein Investment
Research and Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P.,
Equity* through its Bernstein Investment
Research and Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital Management L.P.
Institutional Capital Corporation
MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management, LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and increased income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
Portfolios of the Trusts (continued)
- ----------------------------------------------------------------------------------------------------------
Portfolio Name Objective
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent with
the Adviser's determination of reasonable risk
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income consistent with
Government Securities* relative stability of principal
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current income, preserve
its assets and maintain liquidity
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income consistent with
moderate risk of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Current income is
incidental to the Portfolio's objective
- ----------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through both appreciation
of capital and current income
- ----------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation
- ----------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation
- ----------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation
- ----------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses that approximates
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level consis-
tent with that of the S&P 500 Index
- ----------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth
- ----------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation
- ----------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return through a combina-
tion of current income and capital appreciation
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Portfolio Name Adviser(s)
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Alliance Capital Management L.P
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Alliance Capital Management L.P.
Government Securities*
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance International Alliance Capital Management L.P.
(including through its Bernstein Investment
Research and Management Unit)
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions American Express Financial Corporation
- ----------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive American Express Financial Corporation
- ----------------------------------------------------------------------------------------------------------
EQ/Balanced Alliance Capital Management L.P.
Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- ----------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Alliance Capital Management L.P.,
through its Bernstein Investment Research and
Management Unit
- ----------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ----------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Capital Guardian Trust Company
- ----------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Capital Guardian Trust Company
- ----------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Capital Guardian Trust Company
- ----------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Morgan Stanley Investment Management
- ----------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Evergreen Investment Management Company,
LLC
- ----------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Fidelity Management & Research Company
- ----------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Fidelity Management & Research Company
- ----------------------------------------------------------------------------------------------------------
EQ/High Yield Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
Contract features and benefits 19
Portfolios of the Trusts (continued)
- ----------------------------------------------------------------------------------------------------------
Portfolio Name Objective
- ----------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible (before deduc-
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
- ----------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod-
erate risk of capital and maintenance of liquidity
- ----------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation
- ----------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of capital
- ----------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income
- ----------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth
Companies
- ----------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary
objective to seek reasonable current income
- ----------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of capital and future
income
- ----------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary
Value objective
- ----------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation
- ----------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and any increased
income that results from this growth
- ----------------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as possible (before deduc-
tion of Portfolio expenses) the total return of the Russell
2000 Index
- --------------------------------------------------------------------------------
Portfolio Name Adviser(s)
- --------------------------------------------------------------------------------
EQ/International Equity Index Deutsche Asset Management Inc.
- --------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond J.P. Morgan Investment Management, Inc.
- --------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Janus Capital Management LLC
- --------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Lazard Asset Management
- --------------------------------------------------------------------------------
EQ/Marsico Focus* Marsico Capital Management, LLC
- --------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Mercury Advisors
- --------------------------------------------------------------------------------
EQ/MFS Emerging Growth MFS Investment Management
Companies
- --------------------------------------------------------------------------------
EQ/MFS Investors Trust MFS Investment Management
- --------------------------------------------------------------------------------
EQ/MFS Research MFS Investment Management
- --------------------------------------------------------------------------------
EQ/Putnam Growth & Income Putnam Investment Management, LLC
Value
- --------------------------------------------------------------------------------
EQ/Putnam International Equity Putnam Investment Management, LLC
- --------------------------------------------------------------------------------
EQ/Putnam Voyager Putnam Investment Management, LLC
- --------------------------------------------------------------------------------
EQ/Small Company Index Deutsche Asset Management Inc.
- --------------------------------------------------------------------------------
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays interest
at guaranteed rates. We discuss our general account under "More information"
later in this Prospectus.
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period.
Therefore, different interest rates may apply to different amounts in the
guaranteed interest option.
We credit interest daily to amounts in the guaranteed interest option. There
are three levels of interest in effect at the same time in the guaranteed
interest option:
(1) the minimum interest rate guaranteed over the life of the contract,
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
We set current interest rates periodically, according to our procedures that we
have in effect at the time. We reserve the right to change these procedures.
All interest rates are effective annual rates, but before deduction of annual
administrative charges or any withdrawal charges.
The minimum yearly guaranteed interest rate is 3% for 2002. The yearly rates we
set will never be less than the minimum guaranteed interest rate of 3% for the
life of the contract. Current interest rates will never be less than the yearly
guaranteed interest rate.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options, however, you may not have more than 12 different maturities
running during any contract year. These amounts become part of a non-unitized
separate account. They will accumulate interest at the "rate to maturity" for
each fixed maturity option. The total amount you allocate to and accumulate in
each fixed maturity option is called the "fixed maturity amount." The fixed
maturity options are not available in all states. Check with your financial
professional to see if fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options generally range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
Prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We offer fixed maturity options with
maturity dates ranging from one to ten years. Not all of these fixed maturity
options will be available for annuitant ages 76 and older. See "Allocating your
contributions" below.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied the rate to maturity is 3% or less.
Each new contribution is applied to a new fixed maturity option. When you apply
for an Accumulator(R) Plus(SM) contract, a 60-day rate lock-in will apply from
the date the application is signed. Any contributions received and designated
for a fixed maturity option during this period will receive the then current
maturity option rate or the rate that was in effect on the date that the
application was signed, whichever is greater. There is no rate lock available
for transfers from the variable investment options or the guaranteed interest
option into a fixed maturity option, from one fixed maturity option to another
or for subsequent contributions to the contract.
YOUR CHOICES AT THE MATURITY DATE. We will notify you between 15 and 45 days
before each of your fixed maturity options is scheduled to mature. At that
time, you may choose to have one of the following take place on the maturity
date, as long as none of the conditions listed in "Allocating your
contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option,
any of the variable investment options or the guaranteed interest option;
or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
shortest available maturity option beginning on that date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract, or when we make deductions for charges) from a
fixed maturity option before it matures we will make a market value adjustment,
which will increase or decrease any fixed maturity amount you have in that
fixed maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate in effect at that time for new fixed maturity
options (adjusted to reflect a similar maturity date), and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it
Contract features and benefits 21
is possible that the market value adjustment could greatly reduce your value in
the fixed maturity options, particularly in the fixed maturity options with
later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix II at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options, guaranteed interest option and fixed maturity options.
Allocations must be in whole percentages and you may change your allocations at
any time. However, the total of your allocations must equal 100%. If the
annuitant is age 76 or older, you may allocate contributions to fixed maturity
options if their maturities are five years or less. Also, you may not allocate
amounts to fixed maturity options with maturity dates that are later than the
date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the investment options and guaranteed interest option however
you choose.
For example, if your initial contribution is $10,000, and on February 15, 2002
you choose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $5,802.87 to that fixed maturity option and the balance to your
choice of the variable investment options and guaranteed interest option. On
the maturity date your value in the fixed maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options and guaranteed interest option,
or your other traditional IRA or TSA funds are sufficient to meet your required
minimum distributions. See "Tax information" later in this Prospectus and in
the SAI.
Please check with your financial professional to see if the principal assurance
allocation feature is available in your state.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually allocate amounts to the
variable investment options by periodically transferring approximately the same
dollar amount to the variable investment options you select. This will cause
you to purchase more units if the unit's value is low and fewer units if the
unit's value is high. Therefore, you may get a lower average cost per unit over
the long term. This plan of investing, however, does not guarantee that you
will earn a profit or be protected against losses. You may not make transfers
to the fixed maturity options.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options and the guaranteed interest
option. You can select to have transfers made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the transfers
until all amounts in the EQ/Alliance Money Market option have been transferred
out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The dollar cost averaging program will then
end. You may change the transfer amount once each contract year or cancel this
program at any time.
FIXED-DOLLAR OPTION. Under this option, you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the variable
investment options of your choice. Transfers may be made on a monthly,
quarterly or annual basis. You can specify the number of transfers or instruct
us to continue to make transfers until all available amounts in the guaranteed
interest option have been transferred out.
In order to elect the fixed-dollar option, you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at our
processing office. Transfers may be made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
contract date but not later than the 28th day of the month. The minimum
transfer amount is $50. The fixed-dollar option is subject to the guaranteed
interest option transfer limitations described under "Transferring your account
value" in "Transferring your money among investment options" later in this
Prospectus. While the program is running, any transfer that exceeds those
limitations will cause the program to end for that contract year. You will be
notified. You must send in a request form to resume the program in the next or
subsequent contract years.
22 Contract features and benefits
If, on any transfer date, your value in the guaranteed interest option is equal
to or less than the amount you have elected to have transferred, the entire
amount will be transferred, and the program will end. You may change the
transfer amount once each contract year or cancel this program at any time.
----------------------------------
You may not elect general dollar cost averaging or the fixed-dollar option if
you are participating in the rebalancing program.
CREDITS
A credit will also be allocated to your account value at the same time that we
allocate your contribution. Credits are allocated to the same variable
investment options based on the same percentages used to allocate your
contributions.
The amount of the credit will be 4%, 5% or 6% of each contribution based on the
following breakpoints and rules:
- ----------------------------------------------------------------------
Credit percentage
First year total contributions* applied to
Breakpoints contributions
- ----------------------------------------------------------------------
Less than $250,000 4%
$250,000-$999,999.99 5%
$1 million or more 6%
- ----------------------------------------------------------------------
- ----------------------
* First year total contributions means your total contributions made in the
first contract year.
The percentage of the credit is based on your first year total contributions.
This credit percentage will be credited to each contribution made in the first
year (after adjustment as described below), as well as the second and later
contract years. Although the credit, as adjusted at the end of the first
contract year, will be based upon first year total contributions, the following
rules affect the percentage with which contributions made in the first contract
year are credited during the first contract year:
o Indication of intent: If you indicate in the application at the time you
purchase your contract an intention to make a sufficient level of
contributions to meet one of the breakpoints (the "Expected First Year
Contribution Amount") and your initial contribution is at least 50% of the
Expected First Year Contribution Amount, your credit percentage will be as
follows:
o For any contributions resulting in total contributions to date less than
or equal to your Expected First Year Contribution Amount, the credit
percentage will be the percentage that applies to the Expected First Year
Contribution Amount based on the table above.
o For any subsequent contribution that results in your total contributions
to date exceeding your Expected First Year Contribution
Amount, such that the credit percentage should have been higher, we will
increase the credit percentage applied to that contribution, as well as
any prior or subsequent contributions made in the first contract year,
accordingly.
o For contracts issued in New York, the "Indication of intent" approach to
first year contributions is not available.
o No indication of intent:
o For your initial contribution we will apply the credit percentage based
upon the above table.
o For any subsequent contribution that results in a higher applicable credit
percentage (based on total contributions to date), we will increase the
credit percentage applied to that contribution, as well as any prior or
subsequent contributions made in the first contract year, accordingly.
We may recover all of the credit or a portion of the credit in the following
situations:
o If you exercise your right to cancel the contract, we will recover the entire
credit made to your contract (see "Your right to cancel within a certain
number of days" later in this prospectus)(1).
o If you start receiving annuity payments within three years of making any
contribution, we will recover the credit that applies to any contribution
made within the prior three years.
o If at the end of the first contract year your year total contributions were
lower than your Expected First Year Contribution Amount such that the credit
applied should have been lower, we will recover any Excess Credit. The excess
Credit is equal to the difference between the credit that was actually
applied based on your Expected First Year Contribution Amount (as applicable)
and the credit that should have been applied based on first year total
contributions.
We will recover any credit on a pro rata basis from the value in your variable
investment options and guaranteed interest option. If there is insufficient
value or no value in the variable investment options and guaranteed interest
option, any additional amount of the withdrawal required or the total amount of
the withdrawal will be withdrawn from the fixed maturity options in order of
the earliest maturing date(s). A market value adjustment may apply to
withdrawals from the fixed maturity options.
We do not consider credits to be contributions for purposes of any discussion
in this prospectus. Credits are also not considered to be part of your
investment in the contract for tax purposes.
We use a portion of the mortality and expense risks charge and withdrawal
charge to help recover our cost of providing the credit. See "Charges and
expenses" later in this Prospectus. The charge associated with the credit may,
over time, exceed the sum of the credit and any related earnings. You should
consider this possibility before purchasing the contract.
- ----------------------
(1) The amount we return to you upon exercise of this right to cancel will not
include any credit or the amount of charges deducted prior to cancellation
but will reflect, except in states where we are required to return the
amount of your contributions, any investment gain or loss in the variable
investment options associated with your contributions and with the full
amount of the credit.
Contract features and benefits 23
YOUR BENEFIT BASE
A benefit base is used to calculate the guaranteed minimum income benefit and
any death benefit, as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Living Benefit option" and
"Guaranteed minimum death benefit" below.
STANDARD DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o any applicable credit; less
o a deduction that reflects any withdrawals you make. (See "How withdrawals
affect your guaranteed minimum income benefit and guaranteed minimum death
benefit" in "Accessing your money" later in this Prospectus.)
6% ROLL UP TO AGE 85 ENHANCED DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o any applicable credit; plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money" later in this Prospectus).
The effective annual interest rate credited to this benefit base is:
o 6% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/Alliance Money Market) ; and
o 3% with respect to the EQ/Alliance Intermediate Government Securities and
EQ/Alliance Money Market, the fixed maturity options, the guaranteed interest
option and the loan reserve account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract anniversary
following the annuitant's 85th birthday.
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT OPTION. Your benefit base is
equal to the greater of:
o your initial contribution to the contract and any additional contributions;
plus
o any applicable credit;
or
o your highest account value on any contract anniversary up to the contract
anniversary following the annuitant's 85th birthday;
each less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money" later in this Prospectus).
GREATER OF THE 6% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85 ENHANCED
DEATH BENEFIT AND THE GUARANTEED MINIMUM INCOME BENEFIT. Your benefit base is
equal to the greater of the benefit base computed for the 6% Roll up to age 85
or the Annual ratchet to age 85, as described immediately above, on each
contract anniversary. For the guaranteed minimum income benefit, the benefit
base is reduced by any applicable withdrawal charge remaining when the option
is exercised.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed under "Our Living
Benefit option" and annuity payout options are discussed under "Your annuity
payout options" in "Accessing your money" later in this Prospectus. The
guaranteed annuity purchase factors are those factors specified in your
contract. The current annuity purchase factors are those factors that are in
effect at any given time. Annuity purchase factors are based on interest rates,
mortality tables, frequency of payments, the form of annuity benefit, and the
annuitant's (and any joint annuitant's) age and sex in certain instances.
OUR LIVING BENEFIT OPTION
The Living Benefit option offers you a guaranteed minimum income benefit. The
Living Benefit is available if the annuitant is age 20 through 75 at the time
the contract is issued. There is an additional charge for the Living Benefit
which is described under "Living Benefit charge" in "Charges and expenses"
later in this Prospectus. Living Benefit is currently not available in some
states. Please ask your financial professional if Living Benefit is available
in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option subject to state
availability. For contracts issued in Washington, the Income Manager payout
feature is not available. You choose which of these payout options you want and
whether you want the option to be paid on a single or joint life basis at the
time you exercise your guaranteed minimum income benefit. The maximum period
certain available under the Income Manager payout option is 10 years. This
period may be shorter, depending on the annuitant's age when you exercise your
guaranteed minimum income benefit and the type of contract you own. We may also
make other forms of payout options available. For a description of payout
options, see "Your annuity payout options" in "Accessing your money" later in
this Prospectus.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your guaranteed minimum income benefit base less, outstanding loan
plus accrued interest
24 Contract features and benefits
(applies to Rollover TSA only) at guaranteed annuity purchase factors, or (ii)
the income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. You will
begin receiving payments one payment period after the annuity payout option is
issued. Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death. There is no continuation of benefits
following the annuitant's (or joint annuitant's, if applicable) death.
Before you elect Living Benefit, you should consider the fact that the
guaranteed minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under Living Benefit are more
conservative than the guaranteed annuity purchase factors we use for the Income
Manager payout annuity option. This means that, assuming the same amount is
applied to purchase the benefit and that we use guaranteed annuity purchase
factors to compute the benefit, each periodic payment under the Living Benefit
Income Manager will be smaller than each periodic payment under the Income
Manager payout annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 6% Roll up to
age 85 benefit base, the table below illustrates the guaranteed minimum income
benefit amounts per $100,000 of initial contribution, for a male annuitant age
60 (at issue) on the contract date anniversaries indicated, who has elected the
life annuity fixed payout option, using the guaranteed annuity purchase factors
as of the date of this prospectus, assuming no additional contributions,
withdrawals or loans under Rollover TSA contracts, and assuming there were no
allocations to the EQ/Alliance Intermediate Government Securities, EQ/Alliance
Money Market, the guaranteed interest option, the fixed maturity options or the
loan reserve account under Rollover TSA contracts.
- ----------------------------------------------------------------
guaranteed minimum
Contract date income benefit -- annual
anniversary at exercise income payable for life
- ----------------------------------------------------------------
10 $12,367
15 $19,341
- ----------------------------------------------------------------
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date
anniversary that you are eligible to exercise the guaranteed minimum income
benefit, we will send you an eligibility notice illustrating how much income
could be provided as of the contract date anniversary. You may notify us within
30 days following the contract date anniversary if you want to exercise the
guaranteed minimum income benefit. You must return your contract to us in order
to exercise this benefit. The amount of income you actually receive will be
determined when we receive your request to exercise the benefit. You will begin
receiving payments one payment period after the annuity payout contract is
issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary after
the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 85th birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii)if the annuitant was older than age 60 at the time an IRA, QP or
Rollover TSA contract was issued, the Living Benefit may not be an
appropriate feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can be
exercised; and
(iv) For QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
Your contract provides a death benefit. If you do not elect one of the enhanced
death benefits described below, the death benefit is equal to your account
value (without adjustment for any otherwise applicable negative market value
adjustment) as of the date we receive satisfactory proof of death, any required
instructions for the method of payment, information and forms necessary to
effect payment OR the standard death benefit, whichever provides the highest
amount. The standard death benefit is equal to your total contributions, plus
any applicable credit (less any withdrawals and any withdrawal charges, and any
taxes that apply).
If you elect one of the guaranteed death benefits, the death benefit is equal
to your account value as of the date we receive satisfactory proof of the
annuitant's death, any required instructions for the method of payment,
information and forms necessary to effect payment OR your elected guaranteed
death benefit on the date of the annuitant's death, less any subsequent
withdrawals, withdrawal charges and taxes that apply, whichever provides the
highest amount.
Contract features and benefits 25
OPTIONAL ENHANCED DEATH BENEFITS APPLICABLE FOR ANNUITANT AGES 0 THROUGH 80 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 80 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 70 AT ISSUE OF QP CONTRACTS.
Subject to state availability, you may elect one of the following enhanced
death benefits:
6% ROLL UP TO AGE 85.
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 6% ROLL UP TO AGE 85 AND THE ANNUAL RATCHET TO AGE 85.
Each enhanced death benefit is equal to its corresponding benefit base
described earlier in "Your benefit base." Once you have made your enhanced
death benefit election, you may not change it.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum death benefit" in
"Accessing your money" later in this Prospectus for information on how
withdrawals affect your guaranteed minimum death benefit.
See Appendix III at the end of this Prospectus for an example of how we
calculate an enhanced minimum death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract,
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus for the
potential tax consequences of electing to purchase the Protection Plus feature
in an NQ, IRA or Rollover TSA contract.
If the annuitant is 70 or younger when we issue your contract (or if the
successor owner/annuitant is 70 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 40% of such death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including surrender charges). Credit amounts are not included in "net
contributions." Reduction on a pro rata basis means that we calculate the
percentage of the current account value that is being withdrawn and we reduce
net contributions by that percentage. For example, if the account value is
$30,000 and you withdraw $12,000, you have withdrawn 40% of your account value.
If contributions aggregated $40,000 before the withdrawal, it would be reduced
by $16,000 ($40,000 x .40) and net contributions after the withdrawal would be
$24,000 ($40,000-$16,000); (ii) "Death benefit" is equal to the greater of the
account value as of the date we receive satisfactory proof of death or any
applicable guaranteed minimum death benefit as of the date of death.
If the annuitant is age 71 through 79 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 and 79 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 25% of such death benefit (as described above) less total net contributions
The value of the Protection Plus death benefit is frozen on the first contract
date anniversary after the annuitant turns age 80, except that the benefit will
be reduced for withdrawals on a pro rata basis. Protection Plus must be elected
when the contract is first issued; neither the owner nor the successor
owner/annuitant can add it subsequently. Ask your financial professional if
this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification to cancel the contract and will reflect (i) any
investment gain or loss in the variable investment options (less the daily
charges we deduct), (ii) any guaranteed interest in the guaranteed interest
option, and (iii) any positive or negative market value adjustments in the
fixed maturity options through the date we receive your contract. Some states
require that we refund the full amount of your contribution (not reflecting
(i), (ii) or (iii) above). For any IRA contracts returned to us within seven
days after you receive it, we are required to refund the full amount of your
contribution. Please note that you will forfeit the credit by exercising this
right of cancellation. For any IRA contract returned to us within seven days
after you receive it, we are required to refund the full amount of your
contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return
26 Contract features and benefits
to a Rollover IRA contract. Our processing office or your financial
professional can provide you with the cancellation instructions.
Contract features and benefits 27
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total value of the: (i) values you have in the
variable investment options; (ii) the guaranteed interest account; (iii) market
adjusted amounts in the fixed maturity options; and (iv) value you have in the
loan reserve account (applies for Rollover TSA contracts only). These amounts
are subject to certain fees and charges discussed in "Charges and expenses"
later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value less: (i) the
total amount or a pro rata portion of the annual administrative charge; (ii)
any applicable withdrawal charge; and (iii) the amount of any outstanding loan
plus accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative, and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions plus the credit;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect transfer into, or decreased to reflect transfer
out of a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the enhanced death benefit, Living Benefit and/or
Protection Plus benefit charges, the number of units credited to your contract
will be reduced. Your units are also reduced when we deduct the annual
administrative charge. A description of how unit values are calculated is found
in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED
INTEREST ACCOUNT
Your value in the guaranteed interest account at any time will equal: your
contributions and transfers to that option, plus interest, minus withdrawals
out of the option, and charges we deduct.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
28 Determining your contract's value
3. Transferring your money among the variable investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the variable investment options,
subject to the following:
o You may not transfer to a fixed maturity option that has a rate to maturity
of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date, the transfer may cause a market value adjustment.
The maximum amount that may be transferred from the guaranteed interest option
to any investment option (including amounts transferred pursuant to the
fixed-dollar option dollar cost averaging program described earlier in this
Prospectus) in any contract year is the greatest of:
(a) 25% of the amount you have in the guaranteed interest option on the last
day of the prior contract year; or,
(b) the total of all amounts transferred at your request from the guaranteed
interest option to any of the Investment options in the prior contract
year; or,
(c) 25% of amounts transferred or allocated to the guaranteed interest option
during the current contract year.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Plus(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis)
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value must be included in the rebalancing program.
- --------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing. There is no charge for the rebalancing
feature.
Transferring your money among the variable investment options 29
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging or the fixed-dollar option dollar cost averaging
program. Rebalancing is not available for amounts you have allocated to the
guaranteed interest option or the fixed maturity options.
30 Transferring your money among the variable investment options
4. Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
- -------------------------------------------------------------------------------
Method of withdrawal
----------------------------------------------------------------
Lifetime
required
Substantially minimum
Contract Lump sum Systematic equal distribution
- -------------------------------------------------------------------------------
NQ Yes Yes No No
- -------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- -------------------------------------------------------------------------------
Roth Con-
version IRA Yes Yes Yes No
- -------------------------------------------------------------------------------
Rollover
TSA* Yes Yes No Yes
- -------------------------------------------------------------------------------
QP Yes No No Yes
- -------------------------------------------------------------------------------
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity Contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions). The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value, we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Lump sum withdrawals will be subject to a withdrawal charge if they exceed the
15% free withdrawal amount (see "15% free withdrawal amount" in "Charges and
expenses" later in this Prospectus). Under Rollover TSA contracts, if a loan is
outstanding, you may only take lump sum withdrawals as long as the cash value
remaining after any withdrawal equals at least 10% of the outstanding loan plus
accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA, Rollover IRA and Roth Conversion IRA contracts only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts only)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals based on the method you choose from the choices we offer. The
payments will be made monthly, quarterly or annually as you select. These
payments will continue until we receive written notice from you to cancel this
option, you have completed at least 5 years of payments and attained age 59-1/2
or you take a lump sum withdrawal. You may elect to start receiving
substantially equal withdrawals again, but the payments may not restart in the
same contract year in which you took a lump sum withdrawal. We will calculate
the new withdrawal amount.
Accessing your money 31
Substantially equal withdrawals are not subject to a withdrawal charge.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Rollover TSA and QP contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually. See the
"Required minimum distributions" section in "Tax information" in the SAI for
your specific type of retirement arrangement.
We do not impose a withdrawal charge on minimum distribution withdrawals we
calculate for you except if, when added to a lump sum withdrawal previously
taken in the same contract year, the minimum distribution withdrawal exceeds
the 15% free withdrawal amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, Rollover TSA and QP contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options and the guaranteed
interest account. If there is insufficient value or no value in the variable
investment options and the guaranteed interest account, any additional amount
of the withdrawal required or the total amount of the withdrawal will be
withdrawn from the fixed maturity options in order of the earliest maturity
date(s) first. A market value adjustment may apply to withdrawals from the
fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
Your applicable benefit base will be reduced on a dollar-for-dollar basis as
long as the sum of your withdrawals in a contract year is 6% or less of the
applicable benefit base on the most recent contract date anniversary. Any
portion of a withdrawal that causes the sum of your withdrawals in a contract
year to exceed 6% of the applicable benefit base on the most recent contract
date anniversary and any subsequent withdrawals in that same contract year will
reduce your applicable benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 6% threshold,
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subjected to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI, for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of the loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted from
the death benefit amounts).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT
On the date your loan is processed, we will transfer the amount of your loan to
the loan reserve account. Unless you specify otherwise, we will subtract your
loan on a pro rata basis from your value in the variable investment options and
the guaranteed interest option. If these
32 Accessing your money
amounts are insufficient, any additional amount of the loan will be subtracted
from the fixed maturity options in the order of the earliest maturity date(s)
first. A market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records. Loan
repayments are not considered contributions and therefore are not eligible for
additional credits.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions). For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charge) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the guaranteed interest
account and fixed maturity options (other than for death benefits) for up to
six months while you are living. We also may defer payments for a reasonable
amount of time (not to exceed 10 days) while we are waiting for a contribution
check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Plus(SM) offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under Living Benefit, your choice of payout options are those
that are available under Living Benefit (see "Our Living Benefit option"
earlier in this Prospectus).
- ----------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- ----------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- ----------------------------------------------------------------
Income Manager payout Life annuity with period
options certain
Period certain annuity
- ----------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following the
annuitant's death with this payout option, it provides the highest monthly
payment of any of the life annuity options, so long as the annuitant is
living.
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contracts that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount applied
to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of the
payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
Accessing your money 33
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide you with details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity payout option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator(R) Plus(SM).
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Plus(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Plus(SM). For the tax consequences of withdrawals, see "Tax
information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult you tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under your
Equitable Accumulator(R) Plus(SM) is imposed if you select a period certain. If
the period certain is more than 5 years, then the withdrawal charge deducted
will not exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under
the Equitable Accumulator(R) Plus(SM). If the withdrawal charge that otherwise
would have been applied to your account value under your Equitable
Accumulator(R) Plus(SM) is greater than 2% of the contributions that remain in
your contract at the time you purchase your payout option, the withdrawal
charges under the Income Manager will apply. The year in which your account
value is applied to the payout option will be "contract year 1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin, unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
five years from the contract date. Except with respect to Income Manager
annuity payout options, where payments are made on the 15th day of each month,
you can change the date your annuity payments are to begin anytime before that
date as long as you do not choose a date later than the 28th day of any month.
Also, that date may not be later than the annuity maturity date described
below.
If you elect to start receiving annuity payments within three years of making
an additional contribution, we will recover the amount of any credit that
applies to that contribution.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
34 Accessing your money
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 95th birthday. For
contracts issued in New York, the maturity date is the contract date that
follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- --------------------------------------
Maximum
Issue age annuitization age
- --------------------------------------
0-75 85
76 86
77 87
78-80 88
- --------------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
(subject to a market value adjustment) if an Income Manager annuity payout
option is chosen.
Accessing your money 35
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary -- an annual administrative charge, if
applicable.
o At the time you make certain withdrawals or surrender your contract -- a
withdrawal charge.
o On each contract date anniversary -- a charge if you elect a death benefit
(other than the Standard death benefit).
o On each contract date anniversary -- a charge for the Living Benefit, if you
elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your state.
An annuity administrative fee may also apply.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the Standard death
benefit. The daily charge is equivalent to an annual rate of 0.90% of the net
assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect. A portion of this charge also
compensates us for the contract credit. For a discussion of the credit, see
"Credits" in "Contracts features and benefits" earlier in this Prospectus. We
expect to make a profit from this charge.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on each contract
date anniversary. We deduct the charge if your account value on the last
business day of the contract year is less than $50,000. If your account value
on such date is $50,000 or more, we do not deduct the charge. During the first
two contract years, the charge is equal to $30 or, if less, 2% of your account
value. The charge is $30 for contract years three and later.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option (if permitted in your state) on a pro rata
basis. If those amounts are insufficient, we will deduct all or a portion of
the charge from the fixed maturity options in order of the earliest maturity
date(s) first. A market value adjustment may apply. If you surrender your
contract during the contract year, we will deduct a pro rata portion of the
charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value. A portion of this charge also compensates us for the
contract credit. For a discussion of the credit, see "Credits" in "Contracts
features and benefits" earlier in this Prospectus. We expect to make a profit
from this charge.
The withdrawal charge equals a percentage of the contributions withdrawn. We do
not consider credits to be contributions. Therefore, there is no withdrawal
charge associated with a credit.
The percentage of the withdrawal charge that applies to each contribution
depends on how long each contribution has been invested in
36 Charges and expenses
the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
- -----------------------------------------------------------------------------
Contract year
- -----------------------------------------------------------------------------
1 2 3 4 5 6 7 8 9+
- -----------------------------------------------------------------------------
Percentage of
contribution 8% 8% 7% 7% 6% 5% 4% 3% 0%
- -----------------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawals of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information" later in this Prospectus and in the SAI.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to the
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each variable investment option. The
withdrawal charge helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
(i) The annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration; or
(ii) We receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six months
or less; or
(iii)The annuitant has been confined to a nursing home for more than
90 days (or such other period, as required in your state) as verified
by a licensed physician. A nursing home for this purpose means one
that is (a) approved by Medicare as a provider of skilled nursing care
service, or (b) licensed as a skilled nursing home by the state or
territory in which it is located (it must be within the United States,
Puerto Rico, or U.S. Virgin Islands) and meets all of the following:
-- its main function is to provide skilled, intermediate, or custodial
nursing care;
-- it provides continuous room and board to three or more persons;
-- it is supervised by a registered nurse or licensed practical nurse;
-- it keeps daily medical records of each patient;
-- it controls and records all medications dispensed; and
-- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions as described in (i), (ii)
or (iii) above existed at the time a contribution was remitted or if the
condition that began within 12 months of the period following remittance. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your financial professional can provide more information or you
may contact our processing office.
GUARANTEED MINIMUM DEATH BENEFIT CHARGE
Annual ratchet to age 85. If you elect the Annual ratchet to age 85 enhanced
death benefit, we deduct a charge annually from your account value on each
contract date anniversary. The charge is equal to 0.20% of the Annual ratchet
to age 85 benefit base.
6% Roll up to age 85. If you elect the 6% Roll up to age 85 enhanced death
benefit, we deduct a charge annually from your account value on each contract
date anniversary. The charge is equal to 0.35% of the 6% Roll up to age 85
benefit base.
Greater of 6% Roll up to age 85 or Annual ratchet to age 85. If you elect this
enhanced death benefit, we deduct a charge annually from your account value on
each contract date anniversary. The charge is equal to 0.45% of the greater of
the 6% Roll up to age 85 or the Annual ratchet to age 85 benefit base.
There is no additional charge for the Standard death benefit.
LIVING BENEFIT CHARGE
If you elect the Living Benefit, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option or the
contract date anniversary after the annuitant reaches age 85, whichever occurs
first. The charge is equal to 0.45% of the applicable benefit base in effect on
the contract date anniversary.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options in order of the earliest maturity date(s) first. A market
value adjustment may apply.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.35% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment options and
the guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all
Charges and expenses 37
or a portion of the charge from the fixed maturity options in the order of the
earliest maturity date(s) first. A market value adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed by us varies by state and ranges from 0% to 3.5% (the
rate is 1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge or change the minimum initial
contribution requirements. We also may change the guaranteed minimum death
benefit or offer variable investment options that invest in shares of either
Trust that are not subject to the 12b-1 fee. If permitted under the terms of
our exemptive order regarding Accumulator Plus(SM) bonus feature, we may also
change the crediting percentage that applies to contributions.Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase
under such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
38 Charges and expenses
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
applicable guaranteed minimum death benefit. We determine the amount of the
death benefit (other than the applicable guaranteed minimum death benefit) and
any amount applicable under the Protection Plus feature, as of the date we
receive satisfactory proof of the annuitant's death, any required instructions
for the method of payment, information and forms necessary to effect payment.
The amount of the applicable guaranteed minimum death benefit will be such
guaranteed minimum death benefit as of the date of the annuitant's death,
adjusted for any subsequent withdrawals. The death benefit will be less a
deduction for any outstanding loan plus accrued interest on the date that the
death benefit is made (applies to Rollover TSA only).
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually-owned IRA
contracts.
For individually-owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive the death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (new
owner) within five years after your death (or in a joint ownership situation,
the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin within one year after the non-annuitant
owner's death. Unless this alternative is elected, we will pay any cash five
years after your death (or the death of the first owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions and
information, and forms necessary to effect the successor owner/annuitant
feature, we will increase the account value to
Payment of death benefit 39
equal your elected guaranteed minimum death benefit as of the date of your
death if such death benefit is greater than your account value, plus any amount
applicable under the Protection Plus feature, and adjusted for any subsequent
withdrawals. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to
contributions made before your death. Withdrawal charges will apply if
additional contributions are made. These additional contributions will be
considered to be withdrawn only after all other amounts have been withdrawn. In
determining whether your applicable guaranteed minimum death benefit option
will continue to grow, we will use your surviving spouse's age (as of the date
we receive satisfactory proof of your death, any required instructions and the
information and forms necessary to effect the successor owner/annuitant
feature).
Where an NQ contract is owned by a Living Trust, as defined in the contract,
and at the time of the annuitant's death the annuitant's spouse is the sole
beneficiary of the Living Trust, the Trustee, as owner of the contract, may
request that the spouse be substituted as annuitant as of the date of the
annuitant's death. No further change of annuitant will be permitted.
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death, under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the applicable guaranteed
minimum death benefit as of the date of your death, if such death benefit is
greater than such account value, plus any amount applicable under the
Protection Plus feature, and adjusted for any subsequent withdrawals. The
beneficiary continuation option is available if we have received regulatory
clearance in your state. Where an IRA contract is owned in a custodial
individual retirement account, the custodian may reinvest the death benefit in
an Accumulator(R) Plus(SM) individual retirement annuity contract, using the
account beneficiary as the annuitant. Please contact our processing office for
further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary,
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected by
the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis.) These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
40 Payment of death benefit
7. Tax information
- --------------------------------------------------------------------------------
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Plus(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002 and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions that can be made to all types of tax-favored retirement plans. In
addition to increasing amounts that can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator(R) Plus(SM), extra credit on each contribution,
choice of death benefits, guaranteed interest option, selection of investment
funds and its choices of pay-out options that are available in Accumulator(R)
Plus(SM), as well as the features and benefits of other permissible funding
vehicles and the relative costs of annuities and other arrangements. You should
be aware that cost may vary depending on the features and benefits made
available and the charges and expenses of the investment options or funds that
you elect. See also Appendix I at the end of this Prospectus for a discussion
of QP contracts.
TRANSFERS AMONG VARIABLE INVESTMENT OPTIONS
You can make transfers among variable investment options inside the contract
without triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
Tax information 41
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
Annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which should have no adverse tax effect, it is possible that the IRS could take
a contrary position or assert that the Protection Plus rider is not part of the
contract. IN SUCH A CASE, THE CHARGES FOR THE PROTECTION PLUS RIDER COULD BE
TREATED FOR FEDERAL INCOME TAX PURPOSES AS A PARTIAL WITHDRAWAL FROM THE
CONTRACT. If this were so, such a deemed withdrawal could be taxable, and for
contract owners under age 59-1/2, also subject to a tax penalty. Were the IRS to
take this position, Equitable would take all reasonable steps to attempt to
avoid this result which would include amending the contract (with appropriate
notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the NQ
contract is another nonqualified deferred annuity contract or life insurance
or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Plus(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same on
both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Plus(SM) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
currently included in your gross income for federal income tax purposes.
Incidents of investment control could include among other items, the number of
investment options available under a contract and/or the frequency of transfers
available under the contract. In connection with the issuance of regulations
concerning investment diversification in 1986, the Treasury Department
announced that the diversification regulations did not provide guidance on
investor control but that guidance would be issued in the form of regulations
or rulings. As of the date of this prospectus, no such guidance has been
issued. It is not known whether such guidelines, if in fact issued, would have
retroactive adverse effect on existing contracts. We can not
42 Tax information
provide assurance as to the terms or scope of any future guidance nor any
assurance that such guidance would not be imposed on a retroactive basis to
contracts issued under this prospectus. We reserve the right to modify the
contract as necessary to attempt to prevent you from being considered the owner
of the assets of the separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets funding the account for the benefit of the IRA owner. The assets
typically can include mutual funds and/or individual stocks and/or securities
in a custodial account, and bank certificates of deposit in a trusteed account.
In an individual retirement annuity, an insurance company issues an annuity
contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Plus(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Plus(SM) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) PLUS(SM)CONTRACT
AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE PARAGRAPH ABOVE
DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We have filed a request
with the IRS that the contract with the Protection Plus feature qualifies as to
form for use as a traditional IRA and Roth IRA, respectively. THERE IS NO
ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS THE IRS
QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may not invest in life
insurance contracts. Although we view the optional Protection Plus benefit as an
investment protection feature which should have no adverse tax effect and not as
life insurance, it is possible that the IRS could take a contrary position
regarding tax qualification or assert that the Protection Plus rider is not a
permissible part of an individual retirement annuity contract. We further view
the optional Protection Plus benefit as part of the contract. There is also a
risk that the IRS may take the position that the optional Protection Plus
benefit is not part of the annuity contract. In such a case, the charges for the
Protection Plus rider could be treated for federal income tax purposes as a
partial withdrawal from the contract. If this were so, such a deemed withdrawal
could be taxable, and for contract owners under age 59-1/2, also subject to a
tax penalty. Were the IRS to take any adverse position, Equitable would take all
reasonable steps to attempt to avoid any adverse result, which would include
amending the contract (with appropriate notice to you). YOU SHOULD DISCUSS WITH
YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER PURCHASING AN ACCUMULATOR(R)
PLUS(SM) IRA OR ACCUMULATOR(R) PLUS(SM) ROTH IRA WITH OPTIONAL PROTECTION PLUS
FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
Tax information 43
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA , surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix I at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section covers some of the special tax rules that apply to TSA contracts
under Section 403(b) of the Internal Revenue Code (TSAs).
Generally, there are two types of funding vehicles available for 403(b)
arrangements--an annuity contract under Section 403(b) (1) of the Internal
Revenue Code or a custodial account that invests only in mutual funds and which
is treated as an annuity contract under Section 403(b)(7) of the Code. Both
types of 403(b) arrangements qualify for tax deferral.
PROTECTION PLUS FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR ROLLOVER TSA CONTRACTS, SUBJECT TO
STATE AND CONTRACT AVAILABILITY. THERE IS NO
44 Tax information
ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS THE IRS
QUALIFICATION REQUIREMENTS FOR TSAS. There is a limit to the amount of life
insurance benefits that TSAs may offer. Although we view the optional
Protection Plus benefit as an investment protection feature which should have
no adverse tax effect and not as a life insurance benefit, it is possible that
the IRS could take a contrary position regarding tax qualification or assert
that the Protection Plus rider is not a permissible part of a TSA contract. If
the IRS were to take the position that the optional Protection Plus benefit is
not part of the contract, in such a case, the charges for the Protection Plus
rider could be treated for federal income tax purposes as a partial withdrawal
from the contract. If this were so, such a deemed withdrawal could affect the
tax qualification of the TSA and could be taxable. Were the IRS to take any
adverse position, Equitable would take all reasonable steps to attempt to avoid
any adverse result, which would include amending the contract (with appropriate
notice to you). YOU SHOULD DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD
CONSIDER PURCHASING AN ACCUMULATOR(R) PLUS(SM) ROLLOVER TSA CONTRACT WITH THE
OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to your Rollover TSA contract:
o a rollover from another eligible retirement plan, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another, because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) Plus(SM) contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to a Rollover TSA contract, you may have to obtain
your employer's authorization or demonstrate that you do not need employer
authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to withdrawal restrictions may depend on the source
of the funds used to establish the Accumulator(R) Plus(SM) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" later in this prospectus. In addition, TSA
distributions may be subject to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of the distribution applies to
distributions from a TSA before your reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
Tax information 45
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over an "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation from service, if later. These rules are discussed in greater
detail in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution is
includable in your gross income. This may result in tax being withheld even
though the Roth IRA distribution is ultimately not taxable. You can elect out
of withholding, as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However, we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o hardship withdrawals; or
46 Tax information
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
Tax information 47
8. More information
- --------------------------------------------------------------------------------
ABOUT SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. The results of the Separate Account's operations are
accounted for without regard to Equitable Life's other operations.
The Separate Account is registered under the Investment Company Act of 1940 and
is classified by that act as a "unit investment trust." The SEC, however, does
not manage or supervise Equitable Life or the Separate Account.
Each subaccount (variable investment option) within the Separate Account
invests solely in class IB shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from the Separate Account, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate the Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against the Separate Account
or a variable investment option directly);
(5) to deregister the Separate Account under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Account; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999, EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to Class
IB shares, and other aspects of its operations, appears in the prospectuses for
each Trust, which are attached at the end of this prospectus, or in their
respective SAIs which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table below are illustrative
only and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your financial professional.
For example, the rates to maturity for new allocations as of February 15, 2002
and the related price per $100 of maturity value were as shown below:
- -------------------------------------------------------------
Fixed maturity
options with
February 15th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 15, 2002 maturity value
- -------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
- -------------------------------------------------------------
48 More information
- -------------------------------------------------------------
Fixed maturity
options with
February 15th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 15, 2002 maturity value
- -------------------------------------------------------------
2009 5.08% $ 70.67
2010 5.29% $ 66.19
2011 5.47% $ 61.90
2012 5.59% $ 58.03
- -------------------------------------------------------------
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw any of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date by adjusting the rates on new fixed maturity options
established on that date to reflect a similar maturity date as the
fixed maturity option from which the withdrawal is being made (unless
the withdrawal is being made on the anniversary of the original
contribution to the fixed maturity option, in which case the amount
will be based on the then current rate to maturity).
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix II at the end of this Prospectus for
an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no longer
offering new fixed maturity options, the "current rate to maturity" will be
determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We expect the rates to maturity for the fixed maturity options to be influenced
by, but not necessarily correspond to, among other things, the yields that we
can expect to realize on the separate account's investments from time to time.
Our current plans are to invest in fixed-income obligations, including
corporate bonds, mortgage-backed and asset-backed securities, and government
and agency issues having durations in the aggregate consistent with those of
the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
guaranteed interest option and fixed maturity options as well as our general
obligations. Credits allocated to your account value are funded from our
general account.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account. The dis-
More information 49
closure with regard to the general account, however, may be subject to certain
provisions of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" under "Contract features and benefits" earlier in
this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgment of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgment of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgment of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP contracts or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options. You choose the day of the month you wish to have your account debited.
However, you may not choose a date later than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer, or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS, CREDITS, AND TRANSFERS
o Contributions and credits allocated to the variable investment options are
invested at the value next determined after the close of the business day.
o Contributions and credits allocated to the guaranteed interest option will
receive the crediting rate in effect on that business day for the specified
time period.
o Contributions and credits allocated to a fixed maturity option will receive
the rate to maturity in effect for that fixed maturity option on that
business day (unless a rate lock-in is applicable).
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity in
effect for that fixed maturity option on the business day of the transfer.
o Transfers to the guaranteed interest option will receive the crediting rate
in effect on that business day for the specified time period.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in the prospectus for each Trust or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a share-
50 More information
holder vote is taken. If we do not receive instructions in time from all
contract owners, we will vote the shares of a portfolio for which no
instructions have been received in the same proportion as we vote shares of
that portfolio for which we have received instructions. We will also vote any
shares that we are entitled to vote directly because of amounts we have in a
portfolio in the same proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Account require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001 incorporated in this
prospectus by reference to the 2001 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as consolidated
financial statements of Equitable Life, are in the SAI. The SAI is available
free of charge. You may request one by writing to our processing office or
calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of a Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. If your individual
retirement annuity contract is held in your custodial individual retirement
account, you may only assign or transfer ownership of such an IRA contract to
yourself. Loans are not available and you cannot assign Rollover IRA, Roth
Conversion IRA and QP contracts as security for a loan or other obligation. If
the employer that provided the funds does not restrict them, loans are
available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules. In the case of such a transfer, we will impose
a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC ("AXA Advisors") and
AXA Distributors, LLC ("AXA Distributors"). Both AXA Advisors and AXA
Distributors serve as principal underwriters of Separate Account No. 49. The
offering of the contracts is intended to be continuous.
AXA Advisors (the successor to EQ Financial Consultants, Inc.), an affiliate of
Equitable Life, and AXA Distributors, an indirect wholly owned subsidiary of
Equitable Life, are registered with the SEC as broker dealers and are members
of the National Association of Securities Dealers, Inc. Their principal
business address is 1290 Avenue of the Americas, New York, NY 10104. Both
broker dealers also act as distributors for other Equitable Life annuity
products.
AXA Distributors is a successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. ("EDI"). Like AXA Distributors, EDI
was owned by Equitable Holdings, LLC.
The contracts are sold by financial professionals of AXA Advisors and its
affiliates and by financial professionals of AXA Distributors, as well
More information 51
as by affiliated and unaffiliated broker dealers who have entered into selling
agreements with AXA Distributors.
We pay broker-dealer sales compensation that will generally not exceed an
amount equal to 6% of total contributions made under the contracts. AXA
Distributors may also receive compensation and reimbursement for its marketing
services under the terms of its distribution agreement with Equitable Life.
Broker-dealers receiving sales compensation will generally pay a portion of it
to their financial professionals as commissions related to sales of the
contracts.
52 More information
9. Investment performance
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The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution plus a 4%
credit invested in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the withdrawal charge, the highest optional enhanced death benefit charge, the
optional Living Benefit charge, the charge for Protection Plus and the annual
administrative charge, but does not reflect the charges designed to approximate
certain taxes imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts will be offered
for the first time in 2002.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. The results shown for the EQ/Alliance Money
Market and EQ/Alliance Common Stock options for periods before March 22, 1985
reflect the results of the variable investment options that preceded them. The
"Since portfolio inception" figures for these options are based on the date of
inception of the preceding variable investment options. We have adjusted these
results to reflect the maximum investment advisory fee payable for the
portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessor that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
We will indicate that a 4% credit is reflected when we show performance numbers
that give effect to the credit.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
Investment performance 53
TABLE
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- -------------------------------------------------------------------------------
EQ/Aggressive Stock (31.29)% (6.33)% ( 6.03)%
EQ/Alliance Common Stock (16.49)% 6.99% 7.65%
EQ/Alliance Global (26.26)% 0.99% 1.46%
EQ/Alliance Growth Investors (18.43)% 4.53% 4.75%
EQ/Alliance Money Market ( 1.82)% 2.05% 1.98%
EQ/Alliance Premier Growth (30.06)% -- (14.96)%
EQ/Alliance Small Cap Growth (19.05)% -- 6.59%
EQ/Alliance Technology (30.54)% -- (40.30)%
EQ/Bernstein Diversified Value ( 2.30)% -- 2.80%
EQ/Capital Guardian International (26.89)% -- ( 7.68)%
EQ/Capital Guardian Research ( 7.55)% -- 0.56%
EQ/Capital Guardian U.S. Equity ( 7.54)% -- ( 1.63)%
EQ/Emerging Markets Equity (10.76)% -- ( 8.87)%
EQ/Equity 500 Index (17.95)% 7.24% 7.90%
EQ/Evergreen Omega (22.92)% -- (10.80)%
EQ/FI Mid Cap (19.23)% -- (15.07)%
EQ/FI Small/Mid Cap Value ( 1.38)% -- 4.33%
EQ/High Yield ( 4.77)% (3.36)% ( 2.79)%
EQ/International Equity Index (31.58)% -- ( 4.93)%
EQ/J.P. Morgan Core Bond 2.66% -- 3.56%
EQ/Janus Large Cap Growth (29.03)% -- (33.65)%
EQ/Lazard Small Cap Value 12.72% -- 4.05%
EQ/Mercury Basic Value Equity 0.20% -- 11.14%
EQ/MFS Emerging Growth Companies (40.39)% -- 6.69%
EQ/MFS Investors Trust (21.86)% -- ( 6.75)%
EQ/MFS Research (27.85)% -- 3.12%
EQ/Putnam Growth & Income Value (12.46)% -- 2.63%
EQ/Putnam International Equity (27.55)% -- 5.32%
EQ/Putnam Voyager (30.55)% -- 4.15%
EQ/Small Company Index ( 3.37)% -- 0.69%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- ----------------------------------------------------------------------------------------
EQ/Aggressive Stock (12.26)% (6.33)% 1.64% 9.45%
EQ/Alliance Common Stock ( 5.02)% 6.99% 10.11% 11.09%
EQ/Alliance Global ( 7.31)% 0.99% 6.09% 6.11%
EQ/Alliance Growth Investors ( 2.51)% 4.53% 6.52% 9.34%
EQ/Alliance Money Market 1.52% 2.05% 2.04% 3.75%
EQ/Alliance Premier Growth -- -- -- (14.95)%
EQ/Alliance Small Cap Growth 4.87% -- -- 6.59%
EQ/Alliance Technology -- -- -- (40.30)%
EQ/Bernstein Diversified Value ( 1.86)% -- -- 2.80%
EQ/Capital Guardian International -- -- -- ( 7.68)%
EQ/Capital Guardian Research -- -- -- 0.55%
EQ/Capital Guardian U.S. Equity -- -- -- ( 1.63)%
EQ/Emerging Markets Equity 0.14% -- -- (13.58)%
EQ/Equity 500 Index ( 5.16)% 7.24% -- 10.98%
EQ/Evergreen Omega (10.80)% -- -- (10.80)%
EQ/FI Mid Cap -- -- -- (15.77)%
EQ/FI Small/Mid Cap Value 0.34% -- -- 0.77%
EQ/High Yield ( 7.72)% (3.36)% 4.44% 4.65%
EQ/International Equity Index (11.69)% -- -- ( 4.92)%
EQ/J.P. Morgan Core Bond 2.57% -- -- 3.56%
EQ/Janus Large Cap Growth -- -- -- (34.18)%
EQ/Lazard Small Cap Value 9.40% -- -- 4.05%
EQ/Mercury Basic Value Equity 8.98% -- -- 11.14%
EQ/MFS Emerging Growth Companies ( 5.99)% -- -- 6.69%
EQ/MFS Investors Trust ( 6.75)% -- -- ( 6.75)%
EQ/MFS Research ( 6.59)% -- -- 3.12%
EQ/Putnam Growth & Income Value ( 4.10)% -- -- 2.63%
EQ/Putnam International Equity ( 0.01)% -- -- 5.32%
EQ/Putnam Voyager (10.61)% -- -- 4.15%
EQ/Small Company Index 2.78% -- -- 0.69%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October
16, 1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity,
EQ/MFS Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1,
1997); EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap
Value and EQ/Janus Large Cap Growth (September 5, 2000); EQ/Balanced (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Growth and Income, EQ/Alliance
International, EQ/Alliance Quality Bond, EQ/AXP New Dimensions and EQ/AXP
Strategy Aggressive (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Calvert Socially
Responsible (September 1, 1999); EQ/Alliance Technology (May 1, 2000);
EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid Cap and
EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus (August 31,
2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA Premier
VIP International Equity, AXA Premier VIP Large Cap Core Equity, AXA
Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA Premier
VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value and AXA
Premier VIP Technology (December 31, 2001). No performance information is
provided for portfolios and/or variable investment options with inception
dates after December 31, 2000.
54 Investment performance
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- -------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- -------------------------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any changes
for investment advisory fees, brokerage commissions or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper, the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) Plus(SM) performance relative to other variable
annuity products. The Lipper Survey contains two different universes, which
reflect different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges applicable
under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
withdrawal charge, the optional enhanced death benefit charge, the optional
Protection Plus benefit charge, the annual administrative charge and any charge
designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. For more information, see "Yield Information for
the EQ/Alliance Money Market Option, EQ/Alliance Quality Bond Option and
EQ/High Yield Option" in the SAI.
Investment performance 55
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10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
2001 is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is, or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 57
Appendix I: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Plus(SM) QP contract should discuss with their tax advisers whether this is an
appropriate investment vehicle for the employer's plan. Trustees should consider
whether the plan provisions permit the investment of plan assets in the QP
contract, the distribution of such an annuity and the payment of death benefits
in accordance with the requirements of the federal income tax rules. The QP
contract and this prospectus should be reviewed in full, and the following
factors, among others, should be noted. Assuming continued plan qualification
and operation, earnings on qualified plan assets will accumulate value on a
tax-deferred basis even if the plan is not funded by the Equitable
Accumulator(R) Plus(SM) QP contract or another annuity. Therefore, you should
purchase an Equitable Accumulator(R) Plus(SM) QP contract to fund a plan for the
contract's features and benefits other than tax deferral, after considering the
relative costs and benefits of annuity contracts and other types of arrangements
and funding vehicles. This QP contract accepts transfer contributions only and
not regular, ongoing payroll contributions. For 401(k) plans under defined
contribution plans, no employee after-tax contributions are accepted.
We will not accept defined benefit plans. For defined contribution plans, we
will only accept transfers from another defined contribution plan or a change
of investment vehicles in the plan. Only one additional transfer contribution
may be made per contract year. If overfunding of a plan occurs or amounts
attributable to an excess contribution must be withdrawn, withdrawals from the
QP contract may be required. A withdrawal charge and/or market value adjustment
may apply.
Equitable Life will not perform or provide any plan recordkeeping services with
respect to the QP contracts. The plan's administrator will be solely
responsible for performing or providing for all such services. There is no loan
feature offered under the QP contracts, so if the plan provides for loans and a
participant/employee takes a loan from the plan, other plan assets must be used
as the source of the loan and any loan repayments must be credited to other
investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that the QP contract
may not be appropriate purchase for annuitants approaching or over age 70-1/2.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix I: Purchase considerations for QP contracts A-1
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Appendix II: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,914 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- ------------------------------------------------------------------------------------------------------
Hypothetical Assumed rate to maturity on
February 15, 2007
5.00% 9.00%
- ------------------------------------------------------------------------------------------------------
As of February 15, 2007 (before withdrawal)
- ------------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,082 $ 119,503
- ------------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,104 $ 131,104
- ------------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,978 $ (11,601)
- ------------------------------------------------------------------------------------------------------
On February 15, 2007 (after withdrawal)
- ------------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,504 $ (4,854)
- ------------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,496 $ 54,854
- ------------------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,608 $ 76,250
- ------------------------------------------------------------------------------------------------------
(7) Maturity value $120,091 $ 106,965
- ------------------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,082 $ 69,503
- ------------------------------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized. The market value is computed differently
if you withdraw amounts on a date other than the anniversary of the
establishment of the fixed maturity option.
Appendix II: Market value adjustment example B-1
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Appendix III: Guaranteed enhanced death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the enhanced death benefit.
The following illustrates the enhanced death benefit calculation. Assuming
$100,000 is allocated to the variable investment options (with no allocation to
the EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market,
the guaranteed interest option or the fixed maturity options), no additional
contributions, no transfers, no withdrawals and no loans under a Rollover TSA
contract, the enhanced death benefit for an annuitant age 45 would be
calculated as follows:
- -----------------------------------------------------------------------------------------------------
6% roll up to age 80 Annual ratchet to age 80
End of contract year Account value enhanced death benefit(1) enhanced death benefit
- -----------------------------------------------------------------------------------------------------
1 $105,000 $ 106,000(1) $ 105,000(3)
- -----------------------------------------------------------------------------------------------------
2 $115,500 $ 112,360(2) $ 115,500(3)
- -----------------------------------------------------------------------------------------------------
3 $129,360 $ 119,102(2) $ 129,360(3)
- -----------------------------------------------------------------------------------------------------
4 $103,488 $ 126,248(1) $ 129,360(4)
- -----------------------------------------------------------------------------------------------------
5 $113,837 $ 133,823(1) $ 129,360(4)
- -----------------------------------------------------------------------------------------------------
6 $127,497 $ 141,852(1) $ 129,360(4)
- -----------------------------------------------------------------------------------------------------
7 $127,497 $ 150,363(1) $ 129,360(4)
- -----------------------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
6% ROLL-UP TO AGE 85
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the enhanced death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current enhanced death benefit.
ANNUAL RATCHET TO AGE 85
(3) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(4) At the end of contract years 4 through 7, the enhanced death benefit is the
enhanced death benefit at the end of the prior year since it is equal to
or higher than the current account value.
GREATER OF THE 6% ROLL-UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85
The enhanced death benefit under this option for each year shown would be the
greater of the amounts shown under the 6% roll-up to age 85 or the Annual
ratchet to age 85.
Appendix III: Guaranteed enhanced death benefit example C-1
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Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 23
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option, EQ/Alliance
Quality Bond Option and EQ/High Yield Option 23
Distribution of the contracts 25
Financial Statements 25
How to obtain an Equitable Accumulator(R) Plus(SM) Statement of Additional
Information for Separate Account No. 49
Send this request form to:
Equitable Accumulator(R) Plus(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Please send me an Equitable Accumulator(R) Plus(SM) SAI for Separate Account No.
49 dated May 1,
2002.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
Equitable Accumulator(R) Elite(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) ELITE(SM)?
Equitable Accumulator(R) Elite(SM) is a deferred annuity contract issued by The
Equitable Life Assurance Society of the United States. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options, the guaranteed interest option, fixed maturity
options or the account for special dollar cost averaging ("investment
options"). This contract may not currently be available in all states. Certain
features and benefits described in this prospectus may vary in your state; all
features and benefits may not be available in all states.
Variable investment options
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager(2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"). Your
investment results in a variable investment option will depend on the
investment performance of the related portfolio.
GUARANTEED INTEREST OPTION. You may allocate amounts to the guaranteed interest
option. This option is part of our general account and pays interest at
guaranteed rates.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account pays fixed interest at
guaranteed rates.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined contribution
plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $10,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
processing office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be
obtained from the SEC's Web site at http://www.sec.gov. The table of contents
for the SAI appears at the back of this prospectus.
The SEC has not approved or disapproved these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense. The contracts are not insured by the FDIC or any other
agency. They are not deposits or other obligations of any bank and are not bank
guaranteed. They are subject to investment risks and possible loss of
principal.
X00294/Elite New Series 2002 Portfolio
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) ELITE(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Elite(SM) at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 22
Your benefit base 23
Annuity purchase factors 24
Our Living Benefit option 24
Guaranteed minimum death benefit 25
Your right to cancel within a certain number of days 26
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 27
- --------------------------------------------------------------------------------
Your account value and cash value 27
Your contract's value in the variable investment options 27
Your contract's value in the guaranteed interest option 27
Your contract's value in the fixed maturity options 27
Your contract's value in the account for special dollar cost
averaging 27
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 28
- --------------------------------------------------------------------------------
Transferring your account value 28
Disruptive transfer activity 28
Rebalancing your account value 28
- ----------------------
"We," "our," and "us" refer to Equitable Life.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 30
- --------------------------------------------------------------------------------
Withdrawing your account value 30
How withdrawals are taken from your account value 31
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 31
Loans under Rollover TSA contracts 31
Surrendering your contract to receive its cash value 32
When to expect payments 32
Your annuity payout options 32
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 35
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 35
Charges that the Trusts deduct 37
Group or sponsored arrangements 37
Other distribution arrangements 38
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6. PAYMENT OF DEATH BENEFIT 39
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Your beneficiary and payment of benefit 39
How death benefit payment is made 39
Beneficiary continuation option 40
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7. TAX INFORMATION 40
- --------------------------------------------------------------------------------
Overview 40
Buying a contract to fund a retirement arrangement 41
Transfers among investment options 41
Taxation of nonqualified annuities 41
Individual retirement arrangements (IRAs) 43
Contributions 43
Special rules for contracts funding qualified plans 44
Tax-Sheltered Annuity contracts (TSAs) 44
Federal and state income tax withholding and
information reporting 46
Impact of taxes to Equitable Life 47
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8. MORE INFORMATION 48
- --------------------------------------------------------------------------------
About Separate Account No. 49 48
About the Trusts 48
About our fixed maturity options 48
About the general account 49
About other methods of payment 50
Dates and prices at which contract events occur 50
About your voting rights 50
About legal proceedings 51
About our independent accountants 51
Financial statements 51
Transfers of ownership, collateral assignments, loans
and borrowing 51
Distribution of the contracts 51
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9. INVESTMENT PERFORMANCE 53
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Communicating performance data 56
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10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 57
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Enhanced death benefit example D-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
Page in
Term Prospectus
account value 27
annuitant 15
annuity payout options 32
annuity purchase factors 24
beneficiary 39
benefit base 23
business day 50
cash value 27
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 43
regular contributions 43
rollovers and direct transfers 43
conversion contributions 44
contributions to traditional IRAs 43
regular contributions 43
rollovers and transfers 43
disruptive transfer activity 28
EQAccess 6
ERISA 31
fixed maturity options 21
guaranteed interest option 21
guaranteed minimum death benefit 25
guaranteed minimum income benefit 24
IRA cover
Page in
Term Prospectus
IRS 41
investment options 17
Living Benefit 24
loan reserve account 32
market adjusted amount 21
market timing 28
market value adjustment 21
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 43
SAI cover
SEC cover
TOPS 6
TSA 44
traditional IRA 43
Trusts cover
unit 27
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your financial professional can provide further explanation about
your contract or supplemental materials.
- --------------------------------------------------------------------------------------
Prospectus Contract or Supplemental Materials
- --------------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
Living Benefit Guaranteed Minimum Income Benefit
Guaranteed Interest Option Guaranteed Interest Account
- --------------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
- -----------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL
- -----------------------------------------------------------
Equitable Accumulator(R) Elite(SM)
P.O. Box 13014
Newark, NJ 07188-0014
- -----------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY
- -----------------------------------------------------------
Equitable Accumulator(R) Elite(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- -----------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR
MAIL
- -----------------------------------------------------------
Equitable Accumulator(R) Elite(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
- -----------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY
- -----------------------------------------------------------
Equitable Accumulator(R) Elite(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- -----------------------------------------------------------
REPORTS WE PROVIDE:
- -----------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- -----------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- -----------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options (not available through
EQAccess);
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http:// www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith, or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- -----------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- -----------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests
would normally be the owner. If there are joint owners
all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Elite(SM) at a glance -- key features
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Professional investment Equitable Accumulator(R)Elite(SM)'s variable investment options invest in different portfolios managed
management by professional investment advisers.
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed maturity options o Fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
-------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any
value that you have left in that fixed maturity option. If you surrender your contract, a market
value adjustment may also apply.
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed interest o Principal and interest guarantees.
option
o Interest rates set periodically.
- ------------------------------------------------------------------------------------------------------------------------------------
Account for special dollar Available for dollar cost averaging all or a portion of any eligible contribution to your contract.
cost averaging
- ------------------------------------------------------------------------------------------------------------------------------------
Tax advantages o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
-------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA) or Tax Sheltered
Annuity (TSA) or to fund an employer retirement plan (QP or Qualified Plan), you should be aware
that such annuities do not provide tax deferral benefits beyond those already provided by the
Internal Revenue Code. Before purchasing one of these annuities, you should consider whether its
features and benefits beyond tax deferral meet your needs and goals. You may also want to consider
the relative features, benefits and costs of these annuities compared with any other investment that
you may use in connection with your retirement plan or arrangement. (For more information, see "Tax
information," later in this Prospectus and in the SAI.)
- ------------------------------------------------------------------------------------------------------------------------------------
Living Benefit protection Living Benefit provides a guaranteed minimum income benefit. The guaranteed minimum income benefit
provides income protection for you while the annuitant lives.
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution amounts o Initial minimum: $10,000
o Additional minimum: $500
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
Access to your money o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract. You may
also incur income tax and a tax penalty.
- ------------------------------------------------------------------------------------------------------------------------------------
Payout options o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ------------------------------------------------------------------------------------------------------------------------------------
8 Equitable Accumulator(R) Elite(SM) at a glance -- key features
- ------------------------------------------------------------------------------------------------------------------------------------
Additional features o Guaranteed minimum death benefit options
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing home
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
- ------------------------------------------------------------------------------------------------------------------------------------
Fees and charges o Daily charges on amounts invested in the variable investment options for mortality and expense
risks, administrative charges, and distribution charges at an annual rate of 1.60%.
o The charges for the guaranteed minimum death benefits range from 0.0% to 0.45%, annually, of the
applicable benefit base. The benefit base is described under "Your benefit base" in "Contract
features and benefits" later in this Prospectus.
o Annual 0.45% of the applicable benefit base charge for the optional Living Benefit until you
exercise your guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches age 85, whichever occurs first.
o If your account value at the end of the contract year is less than $50,000, we deduct an annual
administrative charge equal to $30 or during the first two contract years 2% of your account
value, if less. If your account value is, on the contract date anniversary, $50,000 or more, we
will not deduct the charge.
o Annual 0.35% Protection Plus charge for this optional death benefit.
o No sales charge deducted at the time you make contributions. During the first four contract years
following a contribution, a charge of up to 8% will be deducted from amounts that you withdraw
that exceed 10% of your account value. We use the account value on the most recent contract date
anniversary to calculate the 10% amount available. There is no withdrawal charge in the fifth and
later contract years following a contribution.
-------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we receive
the properly completed and signed application, along with any other required documents, and your
initial contribution. Your contract date will be shown in your contract. The 12-month period
beginning on your contract date and each 12-month period after that date is a "contract year." The
end of each 12-month period is your "contract date anniversary."
-------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. This charge is generally deducted from the amount applied to an
annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate
Annuity payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses include management fees ranging from 0.25% to
1.20% annually, 12b-1 fees of 0.25% annually and other expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
Annuitant issue ages NQ: 0-85
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-85
QP: 20-75
- ------------------------------------------------------------------------------------------------------------------------------------
The above is not a complete description of all material provisions of the
contract. In some cases, restrictions or exceptions apply. Also, all features
of the contract are not necessarily available in your state or at certain ages.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
Other contracts
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Elite(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this Prospectus.
The fixed maturity options, guaranteed interest option and the account for
special dollar cost averaging are not covered by the fee table and examples.
However, the annual administrative charge and the withdrawal charge do apply to
the fixed maturity options, guaranteed interest option and the account for
special dollar cost averaging. A market value adjustment (up or down) may apply
as a result of a withdrawal, transfer, or surrender of amounts from a fixed
maturity option.
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your variable investment options expressed as an annual
percentage of daily net assets
- ----------------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks 1.10%
Administrative 0.25%
Distribution 0.25%
----
Total annual expenses 1.60%
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value on each contract date anniversary
- ----------------------------------------------------------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary is less than
$ 50,000(1) $ 30
If your account value on a contract date anniversary is $50,000
or more $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- ----------------------------------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions withdrawn Contract
(deducted if you surrender your contract or make certain withdrawals year
in any of the first four years after we receive a contribution. For each 1.....................8.00%
contribution, we consider the contract year in which we receive that 2.....................7.00%
contribution to be "contract year 1")(2) 3.....................6.00%
4.....................5.00%
5+....................0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- ----------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value each year if you elect the optional benefit
- ----------------------------------------------------------------------------------------------------------------------------------
Guaranteed minimum death benefit charge (calculated as a percentage of the
applicable benefit base. Deducted annually on each contract date
anniversary)
Standard death benefit 0.00%
Annual Ratchet to age 85 0.20% of the Annual Ratchet to age 85 benefit base
6% Roll-up to age 85 0.35% of the 6% Roll-up to age 85 benefit base
Greater of 6% Roll-up to age 85 or Annual Ratchet to age 85 0.45% of the greater of the 6% Roll-up to age 85
benefit base or the
Annual Ratchet to age 85 benefit base, as applicable
- ----------------------------------------------------------------------------------------------------------------------------------
Living Benefit charge (calculated as a percentage of the applicable
benefit base. Deducted annually on each contract date anniversary) 0.45%
- ----------------------------------------------------------------------------------------------------------------------------------
Protection Plus benefit charge (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary) 0.35%
- ----------------------------------------------------------------------------------------------------------------------------------
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- ---------------------------------------------------------------------------------------------------------------------------
Net
Total
Other Annual
Management Expenses Expenses
Fees (After expense (After expense (After expense
limitation)(3) 12b-1 Fees(4) limitation)(5) limitation)(6)
--------------------- ----------------- ---------------- ---------------
- ---------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ---------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- ---------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ---------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- ---------------------------------------------------------------------------------------------------------------------------
(1) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(2) Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal
amount and upon surrender of a contract.
(3) The management fees shown for each portfolio cannot be increased without a
vote of each portfolio's shareholders. See footnote (6) for any expense
limitation agreement information.
Fee table 11
(4) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by The Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Initial seed capital was invested for the Portfolios
of the AXA Premier VIP Trust on December 31, 2001 thus, "Other Expenses"
shown are estimated. See footnote (6) for any expense limitation
agreements information.
(6) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios, which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectuses for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
- --------------------------------------------------------------------------------
Management fees Other expenses
(before any fee (before any fee
waiver and/or waivers and/or
expense expense
Portfolio Name reimbursements) reimbursements)
- --------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- --------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- --------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Management fees Other expenses
(before any fee (before any fee
waiver and/or waivers and/or
expense expense
Portfolio Name reimbursements) reimbursements)
- --------------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- --------------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected Living Benefit, the enhanced death benefit option based on the
greater of the 6% Roll-up to age 85 or the annual ratchet to age 85 and
Protection Plus) would pay in the situation illustrated. We assume that a
$1,000 contribution is invested in one of the variable investment options
listed and a 5% annual return is earned on the assets in that option.(1) The
annual administrative charge is based on the charges that apply to a mix of
estimated contract sizes, resulting in an estimated administrative charge for
the purpose of these examples of $0.13 per $1,000.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods (as applicable) included in the
examples.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
- ---------------------------------------------------------------------------------------------------
If you surrender your contract at the end of each
period shown, your expenses would be:
1 year 3 years 5 years 10 years
- ---------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 110.58 $ 172.28 $ 197.53 $ 427.33
AXA Premier VIP Health Care $ 120.03 $ 199.76 $ 241.81 $ 507.59
AXA Premier VIP International Equity $ 119.50 $ 198.25 $ 239.39 $ 503.33
AXA Premier VIP Large Cap Core Equity $ 114.78 $ 184.56 $ 217.42 $ 463.94
AXA Premier VIP Large Cap Growth $ 114.78 $ 184.56 $ 217.42 $ 463.94
AXA Premier VIP Large Cap Value $ 114.78 $ 184.56 $ 217.42 $ 463.94
AXA Premier VIP Small/Mid Cap Growth $ 117.40 $ 192.18 $ 229.68 $ 486.06
AXA Premier VIP Small/Mid Cap Value $ 117.40 $ 192.18 $ 229.68 $ 486.06
AXA Premier VIP Technology $ 120.03 $ 199.76 $ 241.81 $ 507.59
EQ/Aggressive Stock $ 110.47 $ 171.97 $ 197.02 $ 426.39
EQ/Alliance Common Stock $ 108.79 $ 167.03 $ 188.96 $ 411.29
EQ/Alliance Global $ 112.15 $ 176.90 $ 205.03 $ 441.24
EQ/Alliance Growth and Income $ 109.84 $ 170.12 $ 194.01 $ 420.76
EQ/Alliance Growth Investors $ 109.84 $ 170.12 $ 194.01 $ 420.76
EQ/Alliance Intermediate Government Securities $ 109.74 $ 169.81 $ 193.50 $ 419.81
EQ/Alliance International $ 114.78 $ 184.56 $ 217.42 $ 463.94
EQ/Alliance Money Market $ 107.43 $ 163.00 $ 182.37 $ 398.83
EQ/Alliance Premier Growth $ 112.68 $ 178.44 $ 207.52 $ 445.83
EQ/Alliance Quality Bond $ 109.53 $ 169.20 $ 192.50 $ 417.93
EQ/Alliance Small Cap Growth $ 111.73 $ 175.67 $ 203.03 $ 437.55
EQ/Alliance Technology $ 112.68 $ 178.44 $ 207.52 $ 445.83
EQ/AXP New Dimensions $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/AXP Strategy Aggressive $ 111.10 $ 173.82 $ 200.03 $ 431.99
EQ/Balanced $ 110.05 $ 170.74 $ 195.01 $ 422.64
EQ/Bernstein Diversified Value $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/Calvert Socially Responsible $ 111.63 $ 175.36 $ 202.53 $ 436.63
EQ/Capital Guardian International $ 113.20 $ 179.97 $ 210.00 $ 450.39
EQ/Capital Guardian Research $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/Capital Guardian U.S. Equity $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/Emerging Markets Equity $ 119.50 $ 198.25 $ 239.39 $ 503.33
EQ/Equity 500 Index $ 106.49 $ 160.21 $ 177.79 $ 390.11
EQ/Evergreen Omega $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/FI Mid Cap $ 111.10 $ 173.82 $ 200.03 $ 431.99
EQ/FI Small/Mid Cap Value $ 112.15 $ 176.90 $ 205.03 $ 441.24
EQ/High Yield $ 110.26 $ 171.36 $ 196.02 $ 424.52
EQ/International Equity Index $ 112.15 $ 176.90 $ 205.03 $ 441.24
EQ/J.P. Morgan Core Bond $ 109.00 $ 167.65 $ 189.97 $ 413.19
EQ/Janus Large Cap Growth $ 112.68 $ 178.44 $ 207.52 $ 445.83
EQ/Lazard Small Cap Value $ 112.15 $ 176.90 $ 205.03 $ 441.24
EQ/Marsico Focus $ 112.68 $ 178.44 $ 207.52 $ 445.83
EQ/Mercury Basic Value Equity $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/MFS Emerging Growth Companies $ 110.79 $ 172.90 $ 198.53 $ 429.19
EQ/MFS Investors Trust $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/MFS Research $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/Putnam Growth & Income Value $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/Putnam International Equity $ 113.73 $ 181.50 $ 212.48 $ 454.93
EQ/Putnam Voyager $ 110.58 $ 172.28 $ 197.53 $ 427.33
EQ/Small Company Index $ 109.53 $ 169.20 $ 192.50 $ 417.93
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
If you do not surrender your contract at the end
of
each period shown, the expenses would be:
1 year 3 years 5 years 10 years
- ---------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 30.58 $ 112.28 $ 197.53 $ 427.33
AXA Premier VIP Health Care $ 40.03 $ 139.76 $ 241.81 $ 507.59
AXA Premier VIP International Equity $ 39.50 $ 138.25 $ 239.39 $ 503.33
AXA Premier VIP Large Cap Core Equity $ 34.78 $ 124.56 $ 217.42 $ 463.94
AXA Premier VIP Large Cap Growth $ 34.78 $ 124.56 $ 217.42 $ 463.94
AXA Premier VIP Large Cap Value $ 34.78 $ 124.56 $ 217.42 $ 463.94
AXA Premier VIP Small/Mid Cap Growth $ 37.40 $ 132.18 $ 229.68 $ 486.06
AXA Premier VIP Small/Mid Cap Value $ 37.40 $ 132.18 $ 229.68 $ 486.06
AXA Premier VIP Technology $ 40.03 $ 139.76 $ 241.81 $ 507.59
EQ/Aggressive Stock $ 30.47 $ 111.97 $ 197.02 $ 426.39
EQ/Alliance Common Stock $ 28.79 $ 107.03 $ 188.96 $ 411.29
EQ/Alliance Global $ 32.15 $ 116.90 $ 205.03 $ 441.24
EQ/Alliance Growth and Income $ 29.84 $ 110.12 $ 194.01 $ 420.76
EQ/Alliance Growth Investors $ 29.84 $ 110.12 $ 194.01 $ 420.76
EQ/Alliance Intermediate Government Securities $ 29.74 $ 109.81 $ 193.50 $ 419.81
EQ/Alliance International $ 34.78 $ 124.56 $ 217.42 $ 463.94
EQ/Alliance Money Market $ 27.43 $ 103.00 $ 182.37 $ 398.83
EQ/Alliance Premier Growth $ 32.68 $ 118.44 $ 207.52 $ 445.83
EQ/Alliance Quality Bond $ 29.53 $ 109.20 $ 192.50 $ 417.93
EQ/Alliance Small Cap Growth $ 31.73 $ 115.67 $ 203.03 $ 437.55
EQ/Alliance Technology $ 32.68 $ 118.44 $ 207.52 $ 445.83
EQ/AXP New Dimensions $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/AXP Strategy Aggressive $ 31.10 $ 113.82 $ 200.03 $ 431.99
EQ/Balanced $ 30.05 $ 110.74 $ 195.01 $ 422.64
EQ/Bernstein Diversified Value $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/Calvert Socially Responsible $ 31.63 $ 115.36 $ 202.53 $ 436.63
EQ/Capital Guardian International $ 33.20 $ 119.97 $ 210.00 $ 450.39
EQ/Capital Guardian Research $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/Capital Guardian U.S. Equity $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/Emerging Markets Equity $ 39.50 $ 138.25 $ 239.39 $ 503.33
EQ/Equity 500 Index $ 26.49 $ 100.21 $ 177.79 $ 390.11
EQ/Evergreen Omega $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/FI Mid Cap $ 31.10 $ 113.82 $ 200.03 $ 431.99
EQ/FI Small/Mid Cap Value $ 32.15 $ 116.90 $ 205.03 $ 441.24
EQ/High Yield $ 30.26 $ 111.36 $ 196.02 $ 424.52
EQ/International Equity Index $ 32.15 $ 116.90 $ 205.03 $ 441.24
EQ/J.P. Morgan Core Bond $ 29.00 $ 107.65 $ 189.97 $ 413.19
EQ/Janus Large Cap Growth $ 32.68 $ 118.44 $ 207.52 $ 445.83
EQ/Lazard Small Cap Value $ 32.15 $ 116.90 $ 205.03 $ 441.24
EQ/Marsico Focus $ 32.68 $ 118.44 $ 207.52 $ 445.83
EQ/Mercury Basic Value Equity $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/MFS Emerging Growth Companies $ 30.79 $ 112.90 $ 198.53 $ 429.19
EQ/MFS Investors Trust $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/MFS Research $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/Putnam Growth & Income Value $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/Putnam International Equity $ 33.73 $ 121.50 $ 212.48 $ 454.93
EQ/Putnam Voyager $ 30.58 $ 112.28 $ 197.53 $ 427.33
EQ/Small Company Index $ 29.53 $ 109.20 $ 192.50 $ 417.93
- ---------------------------------------------------------------------------------------------------
Fee table 13
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money" later
in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $5.44 based on the average amount
applied to annuity payout options in 2001. See "Annuity administrative fee" in
"Charges and expenses" later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
14 Fee table
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $10,000 for you
to purchase a contract. You may make additional contributions of at least $500
each, subject to limitations noted below. The following table summarizes our
rules regarding contributions to your contract. In some states, our rules may
vary. All ages in the table refer to the age of the annuitant named in the
contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Available for
annuitant
Contract type issue ages
- --------------------------------------------------------------------------------
NQ 0 through 85
- --------------------------------------------------------------------------------
Rollover IRA 20 through 85
- --------------------------------------------------------------------------------
Roth Conversion 20 through 85
- --------------------------------------------------------------------------------
IRA
- -------------------------------------------------------------------------------------------------------------------------------
Limitations on
Contract type Source of contributions contributions
- -------------------------------------------------------------------------------------------------------------------------------
NQ o After-tax money. o No additional contributions after age 87.
o Paid to us by check or transfer of contract value
in a tax-deferred exchange under Section 1035
of the Internal Revenue Code.
- -------------------------------------------------------------------------------------------------------------------------------
Rollover IRA o Eligible rollover distributions from TSA contracts o No rollover or direct transfer contributions after
or other 403(b) arrangements, qualified plans, age 87.
and governmental EDC plans.
o Contributions after age 70-1/2 must be net of
o Rollovers from another traditional individual required minimum distributions.
retirement arrangement.
o Although we accept regular IRA contributions
o Direct custodian-to-custodian transfers from (limited to $3,000 for the calendar year 2002),
another traditional individual retirement under the Rollover IRA contracts, we intend that
arrangement. this contract be used primarily for rollover and
direct transfer contributions.
o Regular IRA contributions.
o Additional catch-up contributions totalling up to
o For the calendar year 2002 and later, additional $500 can be made for the calendar year 2002
"catch-up" contributions. where the owner is at least age 50 but under
age 70-1/2 at any time during 2002.
- -------------------------------------------------------------------------------------------------------------------------------
Roth Conversion o Rollovers from another Roth IRA. o No additional rollover or direct transfer contribu-
IRA tions after age 87.
o Conversion rollovers from a traditional IRA.
o Conversion rollovers after age 70-1/2 must be net
o Direct transfers from another Roth IRA. of required minimum distributions for the tradi-
tional IRA you are rolling over.
o Regular Roth IRA contributions.
o You cannot roll over funds from a traditional IRA
o For the calendar year 2002 and later, additional if your adjusted gross income is $100,000 or more.
catch-up contributions.
o Although we accept regular Roth IRA contribu-
tions (limited to $3,000 for the calendar year
2002) under the Roth IRA contracts, we intend
that this contract be used primarily for rollover
and direct transfer contributions.
o Additional catch-up contributions totalling up to
$500 can be made for the calendar year 2002
where the owner is at least age 50 at any time
during 2002.
- -------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- --------------------------------------------------------------------------------
Available for
annuitant
Contract type issue ages
- --------------------------------------------------------------------------------
Rollover TSA 20 through 85
- --------------------------------------------------------------------------------
QP 20 through 75
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Limitations on
Contract type Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------
Rollover TSA o Direct transfers of pre-tax funds from another o No additional rollover or direct transfer contribu-
contract or arrangement under Section 403(b) tions after age 87.
of the Internal Revenue Code, complying with
IRS Revenue Ruling 90-24. o Rollover or direct transfer contributions after age
70-1/2 must be net of any required minimum
o Eligible rollover distributions of pre-tax funds distributions.
from other 403(b) plans, qualified plans, govern-
mental EDC plans and traditional IRAs. o Employer-remitted contributions are not
permitted.
- ------------------------------------------------------------------------------------------------------------------------------
QP o Only transfer contributions from an existing o Regular ongoing payroll contributions are not
defined contribution qualified plan trust as a permitted.
change of investment vehicle under the plan.
o Only one additional transfer contribution may be
o The plan must be qualified under Section 401(a) made during a contract year.
of the Internal Revenue Code.
o No additional transfer contributions after age 76.
o For 401(k) plans, transferred contributions may
only include employee pre-tax contributions. o Contributions after age 70-1/2 must be net of any
required minimum distributions.
Please refer to Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Elite(SM) contracts with the
same annuitant would then total more than $1,500,000. We reserve the right to
limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant. This
option may not be available under your contract.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the guaranteed
interest option, the fixed maturity options and the account for special dollar
cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options, the guaranteed
interest option and the fixed maturity options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
Portfolios of the Trusts
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Elite(SM). These portfolios may even have the same manager(s) and/or a similar
name. However, there are numerous factors that can contribute to differences in
performance between two investments, particu- larly over short periods of time.
Such factors include the timing of stock purchases and sales; differences in
fund cash flows; and specific strategies employed by the portfolio manager.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital appreciation Pacific Investment Management Company LLC
consistent with a prudent level of risk
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P.,
Equity* through its Bernstein Investment
Research and Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P.,
Equity* through its Bernstein Investment
Research and Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital Management L.P.
Institutional Capital Corporation
MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management, LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and increased income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
Portfolios of the Trusts (continued)
- --------------------------------------------------------------------------------------------------------
Portfolio Name Objective
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent with
the Adviser's determination of reasonable risk
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income consistent with
Government Securities* relative stability of principal
- --------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current income, preserve
its assets and maintain liquidity
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income consistent with
moderate risk of capital
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Current income is
incidental to the Portfolio's objective
- --------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through both appreciation
of capital and current income
- --------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation
- --------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation
- --------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation
- --------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses that approximates
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level consis-
tent with that of the S&P 500 Index
- --------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth
- --------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation
- --------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return through a combina-
tion of current income and capital appreciation
- --------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Portfolio Name Adviser(s)
- ------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/Alliance Intermediate Alliance Capital Management L.P.
Government Securities*
- ------------------------------------------------------------------------------------
EQ/Alliance International Alliance Capital Management L.P.
(including through its Bernstein Investment
Research and Management Unit)
- ------------------------------------------------------------------------------------
EQ/Alliance Money Market Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/Alliance Technology Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/AXP New Dimensions American Express Financial Corporation
- ------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive American Express Financial Corporation
- ------------------------------------------------------------------------------------
EQ/Balanced Alliance Capital Management L.P.
Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- ------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Alliance Capital Management L.P.,
through its Bernstein Investment Research and
Management Unit
- ------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------
EQ/Capital Guardian International Capital Guardian Trust Company
- ------------------------------------------------------------------------------------
EQ/Capital Guardian Research Capital Guardian Trust Company
- ------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Capital Guardian Trust Company
- ------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Morgan Stanley Investment Management
- ------------------------------------------------------------------------------------
EQ/Equity 500 Index Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
EQ/Evergreen Omega Evergreen Investment Management Company,
LLC
- ------------------------------------------------------------------------------------
EQ/FI Mid Cap Fidelity Management & Research Company
- ------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Fidelity Management & Research Company
- ------------------------------------------------------------------------------------
EQ/High Yield Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------
Contract features and benefits 19
Portfolios of the Trusts (continued)
- -------------------------------------------------------------------------------------------------
Portfolio Name Objective
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EQ/International Equity Index Seeks to replicate as closely as possible (before deduc-
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
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EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod-
erate risk of capital and maintenance of liquidity
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EQ/Janus Large Cap Growth Seeks long-term growth of capital
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EQ/Lazard Small Cap Value Seeks capital appreciation
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EQ/Marsico Focus* Seeks to achieve long-term growth of capital
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EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income
- -------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth
Companies
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EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary
objective to seek reasonable current income
- -------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of capital and future
income
- -------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary
Value objective
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EQ/Putnam International Equity Seeks capital appreciation
- -------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and any increased
income that results from this growth
- -------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as possible (before deduc-
tion of Portfolio expenses) the total return of the Russell
2000 Index
- -------------------------------------------------------------------------------------------------
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Portfolio Name Adviser(s)
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EQ/International Equity Index Deutsche Asset Management Inc.
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EQ/J.P. Morgan Core Bond J.P. Morgan Investment Management, Inc.
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EQ/Janus Large Cap Growth Janus Capital Management LLC
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EQ/Lazard Small Cap Value Lazard Asset Management
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EQ/Marsico Focus* Marsico Capital Management, LLC
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EQ/Mercury Basic Value Equity Mercury Advisors
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EQ/MFS Emerging Growth MFS Investment Management
Companies
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EQ/MFS Investors Trust MFS Investment Management
- ------------------------------------------------------------------------------
EQ/MFS Research MFS Investment Management
- ------------------------------------------------------------------------------
EQ/Putnam Growth & Income Putnam Investment Management, LLC
Value
- ------------------------------------------------------------------------------
EQ/Putnam International Equity Putnam Investment Management, LLC
- ------------------------------------------------------------------------------
EQ/Putnam Voyager Putnam Investment Management, LLC
- ------------------------------------------------------------------------------
EQ/Small Company Index Deutsche Asset Management Inc.
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* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays interest
at guaranteed rates. We discuss our general account under "More information"
later in this Prospectus.
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period.
Therefore, different interest rates may apply to different amounts in the
guaranteed interest option.
We credit interest daily to amounts in the guaranteed interest option. There
are three levels of interest in effect at the same time in the guaranteed
interest option:
(1) the minimum interest rate guaranteed over the life of the contract,
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
We set current interest rates periodically, according to our procedures that we
have in effect at the time. We reserve the right to change these procedures.
All interest rates are effective annual rates, but before deduction of annual
administrative charges or any withdrawal charges.
The minimum yearly guaranteed interest rate is 3% for 2002. The yearly rates we
set will never be less than the minimum guaranteed interest rate of 3% for the
life of the contract. Current interest rates will never be less than the yearly
guaranteed interest rate.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options, however, you may not have more than 12 different maturities
running during any contract year. These amounts become part of a non-unitized
separate account. They will accumulate interest at the "rate to maturity" for
each fixed maturity option. The total amount you allocate to and accumulate in
each fixed maturity option is called the "fixed maturity amount." The fixed
maturity options are not available in all states. Check with your financial
professional to see if fixed maturity options are available in your state.
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Fixed maturity options range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We offer fixed maturity options with
maturity dates ranging from one to ten years. Not all of these fixed maturity
options will be available for annuitant ages 76 and older. See "Allocating your
contributions" below.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied the rate to maturity is 3% or less.
Each new contribution is applied to a new fixed maturity option. When you apply
for an Accumulator(R) Elite(SM) contract, a 60-day rate lock-in will apply from
the date the application is signed. Any contributions received and designated
for a fixed maturity option during this period will receive the then current
maturity option rate or the rate that was in effect on the date that the
application was signed, whichever is greater. There is no rate lock available
for transfers from the variable investment options or the guaranteed interest
option into a fixed maturity option, from one fixed maturity option to another
or for subsequent contributions to the contract.
YOUR CHOICES AT THE MATURITY DATE. We will notify you between 15 and 45 days
before each of your fixed maturity options is scheduled to mature. At that
time, you may choose to have one of the following take place on the maturity
date, as long as none of the conditions listed below in "Allocating your
contributions," would apply:
(a) transfer the maturity value into another available fixed maturity option,
any of the variable investment options or the guaranteed interest option; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
shortest available maturity option beginning on that date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate in effect at that time for new fixed maturity
options (adjusted to reflect a similar maturity date), and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it
Contract features and benefits 21
is possible that the market value adjustment could greatly reduce your value in
the fixed maturity options, particularly in the fixed maturity options with
later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general account.
We pay interest at guaranteed rates in this account. We will credit interest to
the amounts that you have in the account for special dollar cost averaging
every day. We set the interest rates periodically, according to procedures that
we have. We reserve the right to change these procedures.
We guarantee to pay our current interest rate that is in effect on the date
that your contribution is allocated to this account. Your guaranteed interest
rate for the time period you select will be shown in your contract for an
initial contribution. The rate will never be less than 3%. See "Allocating your
contributions" below for rules and restrictions that apply to the special
dollar cost averaging program.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options, the guaranteed interest option and fixed maturity options.
Allocations must be in whole percentages and you may change your allocations at
any time. However, the total of your allocations must equal 100%. If the
annuitant is age 76 or older, you may allocate contributions to fixed maturity
options if their maturities are five years or less. Also, you may not allocate
amounts to fixed maturity options with maturity dates that are later than the
date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options and guaranteed interest option
however you choose.
For example, if your initial contribution is $25,000, and on February 15, 2002
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $14,507.17 to that fixed maturity option and the balance to your
choice of the variable investment options and guaranteed interest option. On
the maturity date your value in the fixed maturity option would be $25,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options and guaranteed interest option,
or your other traditional IRA or TSA funds are sufficient to meet your required
minimum distributions. See "Tax information" later in this Prospectus and in
the SAI.
Please check with your financial professional to see if the principal assurance
allocation feature is available in your state. Also, you may not elect
principal assurance if the special dollar cost averaging program is in effect.
DOLLAR COST AVERAGING
We offer three dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually allocate amounts to the
variable investment options by periodically transferring approximately the same
dollar amount to the variable investment options you select. This will cause
you to purchase more units if the unit value is low and fewer units if the unit
value is high. Therefore, you may get a lower average cost per unit over the
long term. These plans of investing, however, do not guarantee that you will
earn a profit or be protected against losses. You may not make transfers to the
fixed maturity options.
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Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
SPECIAL DOLLAR COST AVERAGING PROGRAM. Subject to state availability, under the
special dollar cost averaging program, you may choose to allocate all or a
portion of any eligible contribution to the account for special dollar cost
averaging. You may elect to participate in the special dollar cost averaging
program at any time subject to the age limitation on contributions described in
Section 1 of this prospectus. Contributions into the account for special dollar
cost averaging may not be transfers from other investment options. Your initial
allocation to any special dollar cost averaging program time period must be at
least $2,000 and any subsequent contribution to that same time period must be
at least $250. You may only have one time period in effect at any time and once
you select a time period, you may not change it. In Pennsylvania, we refer to
this program as "enhanced rate dollar cost averaging."
You may have your account value transferred to any of the variable investment
options. We will transfer amounts from the account for special dollar cost
averaging into the variable investment options over an available time period
that you select. We offer time periods of 3, 6 or 12 months during which you
will receive an enhanced interest rate. We may also offer other time periods.
Your financial professional can provide information on the time periods and
interest rates currently available in your state, or you may contact our
processing office. If the special dollar cost averaging program is selected at
the time of appli-
22 Contract features and benefits
cation to purchase the Accumulator(R) Elite(SM) contract, a 60 day rate lock
will apply from the date of application. Any contribution(s) received during
this 60 day period will be credited with the interest rate offered on the date
of application for the remainder of the time period selected at application. Any
contribution(s) received after the 60 day rate lock period has ended will be
credited with the then current interest rate for the remainder of the time
period selected at application. Contribution(s) made to a special dollar cost
averaging program selected after the Accumulator(R) Elite(SM) contract has been
issued will be credited with the then current interest rate on the date the
contribution is received by Equitable for the time period initially selected by
you. Once the time period you selected has run, you may then select another time
period for future contributions. At that time, you may also select a different
allocation for transfers to the variable investment options, or, if you wish, we
will continue to use the selection that you have previously made. Currently,
your account value will be transferred from the account for special dollar cost
averaging into the variable investment options on a monthly basis. We may offer
this program in the future with transfers on a different basis.
We will transfer all amounts out of the account for special dollar cost
averaging by the end of the chosen time period. The transfer date will be the
same day of the month as the contract date, but not later than the 28th day of
the month. For a special dollar cost averaging program selected after
application, the first transfer date and each subsequent transfer date for the
time period selected will be one month from the date the first contribution is
made into the special dollar cost averaging program, but not later than the
28th of the month.
If you choose to allocate only a portion of an eligible contribution to the
account for special dollar cost averaging, the remaining balance of that
contribution will be allocated to the variable investment options, guaranteed
interest option or fixed maturity options according to your instructions.
The only amounts that should be transferred from the account for special dollar
cost averaging are your regularly scheduled transfers to the variable
investment options. No amounts may be transferred from the account for special
dollar cost averaging to the guaranteed interest option or the fixed maturity
options. If you request to transfer or withdraw any other amounts from the
account for special dollar averaging, we will transfer all of the value that
you have remaining in the account for special dollar cost averaging to the
investment options according to the allocation percentages we have on file for
you. You may ask us to cancel your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options and the guaranteed interest
option. You can select to have transfers made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the transfers
until all amounts in the EQ/Alliance Money Market option have been transferred
out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
FIXED-DOLLAR OPTION. Under this option, you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the variable
investment options of your choice. Transfers may be made on a monthly,
quarterly or annual basis. You can specify the number of transfers or instruct
us to continue to make transfers until all available amounts in the guaranteed
interest option have been transferred out.
In order to elect the fixed-dollar option, you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at our
processing office. Transfers may be made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
contract date but not later than the 28th day of the month. The minimum
transfer amount is $50. Unlike the account for special dollar cost averaging,
this option does not offer enhanced rates. Also, this option is subject to the
guaranteed interest option transfer limitations described under "Transferring
your account value" in "Transferring your money among investment options" later
in this Prospectus. While the program is running, any transfer that exceeds
those limitations will cause the program to end for that contract year. You
will be notified. You must send in a request form to resume the program in the
next or subsequent contract years.
If, on any transfer date, your value in the guaranteed interest option is equal
to or less than the amount you have elected to have transferred, the entire
amount will be transferred, and the program will end. You may change the
transfer amount once each contract year or cancel this program at any time.
----------------------------------
You may not elect general dollar cost averaging, special dollar cost averaging
or the fixed-dollar option if you are participating in the rebalancing program.
See "Transfers among investment options" later in this Prospectus. You may not
elect the special dollar cost averaging program if the principal assurance
program is in effect.
YOUR BENEFIT BASE
A benefit base is used to calculate the guaranteed minimum income benefit and
any death benefit, as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Living Benefit option" and
"Guaranteed minimum death benefit" below.
STANDARD DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your
Contract features and benefits 23
guaranteed minimum income benefit and guaranteed minimum death benefit" in
"Accessing your money" later in this Prospectus).
6% ROLL UP TO AGE 85 ENHANCED DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money" later in this Prospectus).
The effective annual interest rate credited to this benefit base is:
o 6% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/Alliance Money Market) and the
account for special dollar cost averaging; and
o 3% with respect to the EQ/Alliance Intermediate Government Securities and
EQ/Alliance Money Market, the fixed maturity options, the guaranteed interest
option and the loan reserve account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract anniversary
following the annuitant's 85th birthday.
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT. Your benefit base is equal to
the greater of:
o your initial contribution to the contract (plus any additional
contributions),
or
o your highest account value of any contract anniversary up to the contract
anniversary following the annuitant's 85th birthday, each less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money" later in this Prospectus).
GREATER OF THE 6% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85 ENHANCED
DEATH BENEFIT AND THE GUARANTEED MINIMUM INCOME BENEFIT. Your benefit base is
equal to the greater of the benefit base computed for the 6% Roll up to age 85
or the Annual ratchet to age 85, as described immediately above, on each
contract anniversary. For the guaranteed minimum income benefit, the benefit
base is reduced by any applicable withdrawal charge remaining when the option
is exercised.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our Living
Benefit option" and annuity payout options are discussed in "Accessing your
money" later in this Prospectus. The guaranteed annuity purchase factors are
those factors specified in your contract. The current annuity purchase factors
are those factors that are in effect at any given time. Annuity purchase
factors are based on interest rates, mortality tables, frequency of payments,
the form of annuity benefit, and the annuitant's (and any joint annuitant's)
age and sex in certain instances.
OUR LIVING BENEFIT OPTION
The Living Benefit option offers you a guaranteed minimum income benefit. The
Living Benefit is available if the annuitant is age 20 through 75 at the time
the contract is issued. There is an additional charge for the Living Benefit
which is described under "Living Benefit charge" in "Charges and expenses"
later in this Prospectus. Living Benefit is currently not available in some
states. Please ask your financial professional if Living Benefit is available
in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability. You choose which of these payout options you want and
whether you want the option to be paid on a single or joint life basis at the
time you exercise your guaranteed minimum income benefit. The maximum period
certain available under the Income Manager payout option is 10 years. This
period may be shorter, depending on the annuitant's age when you exercise your
guaranteed minimum income benefit and the type of contract you own. We may also
make other forms of payout options available. For a description of payout
options, see "Your annuity payout options" in "Accessing your money" later in
this Prospectus.
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The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your guaranteed minimum income benefit base, less any outstanding
loans plus accrued interest (applies to Rollover TSA only), at guaranteed
annuity purchase factors, or (ii) the income provided by applying your actual
account value at our then current annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. You will
begin receiving payments one payment period after the annuity payout option is
issued. Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death. There is no continuation of benefits
following the annuitant's (or joint annuitant's, if applicable) death.
Before you elect Living Benefit, you should consider the fact that the
guaranteed minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
24 Contract features and benefits
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under Living Benefit are more
conservative than the guaranteed annuity purchase factors we use for the Income
Manager payout annuity option. This means that, assuming the same amount is
applied to purchase the benefit and that we use guaranteed annuity purchase
factors to compute the benefit, each periodic payment under the Living Benefit
Income Manager will be smaller than each periodic payment under the Income
Manager payout annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 6% Roll up to
age 85 benefit base, the table below illustrates the guaranteed minimum income
benefit amounts per $100,000 of initial contribution, for a male annuitant age
60 (at issue) on the contract date anniversaries indicated, who has elected the
life annuity fixed payout option, using the guaranteed annuity purchase factors
as of the date of this prospectus, assuming no additional contributions,
withdrawals or loans under Rollover TSA contracts, and assuming there were no
allocations to EQ/Alliance Intermediate Government Securities, EQ/Alliance
Money Market, the guaranteed interest option, the fixed maturity options or the
loan reserve account under rollover TSA contracts.
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Guaranteed minimum income
Contract date benefit -- annual income
anniversary at exercise payable for life
- --------------------------------------------------------------------------------
10 $11,891
15 $18,597
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date
anniversary that you are eligible to exercise the guaranteed minimum income
benefit, we will send you an eligibility notice illustrating how much income
could be provided as of the contract date anniversary. You may notify us within
30 days following the contract date anniversary if you want to exercise the
guaranteed minimum income benefit. You must return your contract to us in order
to exercise this benefit. The amount of income you actually receive will be
determined when we receive your request to exercise the benefit. You will begin
receiving payments one payment period after the annuity payout contract is
issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary after
the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit is
the contract date anniversary following the annuitant's 85th birthday; and
(ii) if the annuitant was age 75 when the contract was issued, the only time you
may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 at the time an IRA, QP or Rollover
TSA contract was issued, the Living Benefit may not be an appropriate
feature because the minimum distributions required by tax law generally
must begin before the guaranteed minimum income benefit can be exercised;
and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
Your contract provides a death benefit. If you do not elect one of the enhanced
death benefits described below, the death benefit is equal to your account
value (without adjustment for any otherwise applicable negative market value
adjustment) as of the date we receive satisfactory proof of death, any required
instructions for the method of payment, information and forms necessary to
effect payment OR the standard death benefit, whichever provides the highest
amount. The standard death benefit is equal to your total contributions, less
withdrawals (and any associated withdrawal charges), and any taxes that apply.
If you elect one of the enhanced death benefits, the death benefit is equal to
your account value as of the date we receive satisfactory proof of the
annuitant's death, any required instructions for the method of payment,
information and forms necessary to effect payment OR your elected enhanced
death benefit on the date of the annuitant's death, less any subsequent
withdrawals, withdrawal charges and taxes that apply, whichever provides the
highest amount.
OPTIONAL ENHANCED DEATH BENEFITS APPLICABLE FOR ANNUITANT AGES 0 THROUGH 84 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 84 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
Subject to state availability, you may elect one of the following enhanced
death benefits:
6% ROLL UP TO AGE 85.
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 6% ROLL UP TO AGE 85 AND THE ANNUAL RATCHET TO AGE 85.
Each enhanced death benefit is equal to its corresponding benefit base
described earlier in "Your benefit base." Once you have made your enhanced
death benefit election, you may not change it.
Contract features and benefits 25
The standard death benefit is the only death benefit available for annuitants
age 85 at issue of NQ, Rollover IRA, Roth Conversion IRA and Rollover TSA
contracts.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix IV at the end of this Prospectus for an example of how we
calculate an enhanced death benefit.
Protection Plus
Subject to state and contract availability, if you are purchasing a contract,
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus for the
potential tax consequences of electing to purchase the Protection Plus feature
in an NQ, IRA or Rollover TSA contract.
If the annuitant is 70 or younger when we issue your contract (or if the
successor owner/annuitant is 70 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 40% of such death benefit less total net contributions.
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including withdrawal charges and loans). Reduction on a pro rata basis means
that we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
If the annuitant is age 71 through 79 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 and 79 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 25% of such death benefit (as described above) less total net contributions.
The value of the Protection Plus death benefit is frozen on the first contract
date anniversary after the annuitant turns age 80, except that the benefit will
be reduced for withdrawals on a pro rata basis. Protection Plus must be elected
when the contract is first issued: neither the owner nor the successor
owner/annuitant can add it subsequently. Ask your financial professional if
this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), (ii) any guaranteed interest in the
guaranteed interest option and (iii) any positive or negative market value
adjustments in the fixed maturity options through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i), (ii) or (iii) above). For any IRA contract
returned to us within seven days after you receive it, we are required to
refund the full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your financial professional, can provide you with the
cancellation instructions.
26 Contract features and benefits
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the (i) values you have in the variable
investment options; (ii) the guaranteed interest option; (iii) market adjusted
amounts in the fixed maturity options; (iv) value in the account for special
dollar cost averaging and (v) value you have in the loan reserve account
(applicable to Rollover TSA contracts only). These amounts are subject to
certain fees and charges discussed under "Charges and expenses" later in this
Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge; (ii)
any applicable withdrawal charges and (iii) the amount of any outstanding loan
plus accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
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Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the enhanced death benefits Living Benefit charge
and/or the Protection Plus benefit charges, the number of units credited to
your contract will be reduced. Your units are also reduced when we deduct the
annual administrative charge. A description of how unit values are calculated
is found in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED
INTEREST OPTION
Your value in the guaranteed interest option at any time will equal: your
contributions and transfers to that option, plus interest, minus withdrawals
out of the option, and charges we deduct.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time will
equal your contribution allocated to that option, plus interest, less the sum
of all amounts that have been transferred to the variable investment options
you have selected.
Determining your contract's value 27
3. Transferring your money among investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar cost
averaging.
o You may not transfer to a fixed maturity option that has a rate to maturity
of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date, the transfer may cause a market value adjustment.
The maximum amount that may be transferred from the guaranteed interest option
to any investment option (including amounts transferred pursuant to the
fixed-dollar option dollar cost averaging program described earlier in this
Prospectus) in any contract year is the greatest of:
(a) 25% of the amount you have in the guaranteed interest option on the last
day of the prior contract year; or,
(b) the total of all amounts transferred at your request from the guaranteed
interest option to any of the investment options in the prior contract
year; or
(c) 25% of amounts transferred or allocated to the guaranteed interest option
during the current contract year.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring. We will
confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Elite(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis).
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing. There is no charge for the rebalancing
feature.
28 Transferring your money among investment options
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging, special dollar cost averaging or the
fixed-dollar option dollar cost averaging program. Rebalancing is not available
for amounts you have allocated in the guaranteed interest option or the fixed
maturity options.
Transferring your money among investment options 29
4. Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
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Method of withdrawal
Lifetime
required
Substantially minimum
Contract Lump sum Systematic equal distribution
- --------------------------------------------------------------------------------
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Roth
Conversion
IRA Yes Yes Yes No
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QP Yes No No Yes
Rollover
TSA* Yes Yes No Yes
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* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value, we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Lump sum withdrawals will be subject to a withdrawal charge if they exceed the
10% free withdrawal amount (see "10% free withdrawal amount" in "Charges and
expenses" later in this Prospectus). Under Rollover TSA contracts, if a loan is
outstanding, you may only take lump sum withdrawals as long as the cash value
remaining after any withdrawal equals at least 10% of the outstanding loan plus
accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 0.8% monthly, 2.4% quarterly and 10.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 10% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
30 Accessing your money
Substantially equal withdrawals are not subject to a withdrawal charge.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP and Rollover TSA contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually. See the
"Required minimum distributions" section in "Tax information" in the SAI for
your specific type of retirement arrangement.
We do not impose a withdrawal charge on minimum distribution withdrawals we
calculate for you except if, when added to a lump sum withdrawal previously
taken in the same contract year, the minimum distribution withdrawal exceeds
the 10% free withdrawal amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, QP and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options and the guaranteed
interest option. If there is insufficient value or no value in the variable
investment options and the guaranteed interest option, any additional amount of
the withdrawal required or the total amount of the withdrawal will be withdrawn
from the fixed maturity options in order of the earliest maturity date(s) first
and then from the account for special dollar cost averaging. A market value
adjustment may apply to withdrawals from the fixed maturity options. If those
amounts are insufficient, we will deduct all or a portion of the charge from
the account for special dollar cost averaging.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
Your applicable benefit base will be reduced on a dollar-for-dollar basis as
long as the sum of your withdrawals in a contract year is 6% or less of the
applicable benefit base on the most recent contract date anniversary. Any
portion of a withdrawal that causes the sum of your withdrawals in a contract
year to exceed 6% of the applicable benefit base on the most recent contract
date anniversary, and any subsequent withdrawals in that same contract year
will reduce your applicable benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 6% threshold
described above can have significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your death benefit was $40,000 before
the withdrawal, it would be reduced by $16,000 ($40,000 x .40) and your new
death benefit after the withdrawal would be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
Accessing your money 31
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options and the guaranteed interest option. If these amounts are
insufficient, any additional amount of the loan will be subtracted from the
fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charges) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the guaranteed interest
option, fixed maturity options and the account for special dollar cost
averaging (other than for death benefits) for up to six months while you are
living. We also may defer payments for a reasonable amount of time (not to
exceed 10 days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Elite(SM) offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under Living Benefit, your choice of payout options are those
that are available under Living Benefit (see "Our Living Benefit option"
earlier in this Prospectus).
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Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
Income Manager payout options Life annuity with period
(available for annuitants age 83 certain
or less at contract issue) Period certain annuity
- -----------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following the
annuitant's death with this payout option, it provides the highest monthly
payment of any of the life annuity options, so long as the annuitant is
living.
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contracts that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount applied
to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's
32 Accessing your money
life. It does not permit any repayment of the unpaid principal, so you cannot
elect to receive part of the payments as a single sum payment with the rest
paid in monthly annuity payments. This payout option is available only as a
fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your contract.
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Elite(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Elite(SM), and we will deduct any applicable withdrawal charge.
For the tax consequences of withdrawals, see "Tax information" later in this
Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under our
contract is imposed if you select a period certain. If the period certain is
more than 5 years, then the withdrawal charge deducted will not exceed 5% of
the account value.
For the Income Manager payout options no withdrawal charge is imposed under
your contract. If the withdrawal charge that otherwise would have been applied
to your account value under your contract is greater than 2% of the
contributions that remain in your contract at the time you purchase your payout
option, the withdrawal charges under the Income Manager will apply. The year in
which your account value is applied to the payout option will be "contract year
1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Elite(SM) contract date.
Except with respect to the Income Manager annuity payout options, where payments
are made on the 15th day of each month, you can change the date your annuity
payments are to begin anytime before that date as long as you do not choose a
date later than the 28th day of any month. Also, that date may not be later than
the annuity maturity date described below.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
Accessing your money 33
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY AGE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 95th birthday. For
contracts issued in New York, the maturity date is the contract date that
follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- ----------------------------------------
Maximum
Issue age annuitization age
0-75 85
76 86
77 87
78-80 88
81-85 90
- ----------------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
(subject to a market value adjustment) if an Income Manager payout option is
chosen.
34 Accessing your money
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary -- an annual administrative charge, if
applicable.
o At the time you make certain withdrawals or surrender your contract -- a
withdrawal charge.
o On each contract date anniversary -- a charge if you elect a death benefit
(other than the Standard death benefit).
o On each contract date anniversary -- a charge for the Living Benefit, if you
elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your state.
An annuity administrative fee may also apply.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the Standard death
benefit. The daily charge is equivalent to an annual rate of 1.10% of the net
assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on each contract
date anniversary. We deduct the charge if your account value on the last
business day of the contract year is less than $50,000. If your account value
on such date is $50,000 or more, we do not deduct the charge. During the first
two contract years, the charge is equal to $30 or, if less, 2% of your account
value. The charge is $30 for contract years three and later.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option (if permitted in your state) on a pro rata
basis. If those amounts are insufficient, we will deduct all or a portion of
the charge from the fixed maturity options in order of the earliest maturity
date(s) first. A market value adjustment may apply. If those amounts are
insufficient, we will deduct all or a portion of the charge from the account
for special dollar cost averaging. If you surrender your contract during the
contract year, we will deduct a pro rata portion of the charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances:
(1) if you make one or more withdrawals during a contract year that, in total,
exceeds the 10% free withdrawal amount, described below, or
(2) if you surrender your contract to receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn in any
of the first four years after we receive a contribution. We determine the
withdrawal charge separately for each contribution according to the following
table:
- ---------------------------------------------------------------------
Contract year
- ---------------------------------------------------------------------
1 2 3 4 5
- ---------------------------------------------------------------------
Percentage of contri-
bution 8 % 7 % 6 % 5 % 0 %
- ---------------------------------------------------------------------
Charges and expenses 35
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawals of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information" later in this Prospectus and in the SAI.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and withdrawal charge from your account
value. The amount deducted to pay withdrawal charges is also subject to that
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover sales expenses.
The withdrawal charge does not apply in the circumstances described below.
10% free withdrawal amount. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 10%
free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust:
The free withdrawal amount will equal the greater of:
(1) the current account value less contributions that have not been withdrawn
(earnings in the contract), and (2) the 10% free withdrawal amount defined
above.
Disability, terminal illness or confinement to nursing home. The withdrawal
charge does not apply if:
(i) The annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration; or
(ii) We receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six months
or less; or
(iii) The annuitant has been confined to a nursing home for more than 90
days (or such other period, as required in your state) as verified by a
licensed physician. A nursing home for this purpose means one that is (a)
approved by Medicare as a provider of skilled nursing care service, or
(b) licensed as a skilled nursing home by the state or territory in which
it is located (it must be within the United States, Puerto Rico, or U.S.
Virgin Islands) and meets all of the following:
-- its main function is to provide skilled, intermediate, or custodial
nursing care;
-- it provides continuous room and board to three or more persons;
-- it is supervised by a registered nurse or licensed practical nurse;
-- it keeps daily medical records of each patient;
-- it controls and records all medications dispensed; and
-- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions as described in (i), (ii)
or (iii) above existed at the time a contribution was remitted or if the
condition began within 12 months of the period following remittance. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your financial professional can provide more information or you
may contact our processing office.
FOR ALL CONTRACTS ISSUED IN NEW YORK -- FIXED MATURITY OPTIONS
For contracts issued in New York, the withdrawal charge that applies to
withdrawals taken from amounts in the fixed maturity options will never exceed
7% and will be determined by applying the New York Alternate Scale I shown
below. If you withdraw amounts that have been transferred from one fixed
maturity option to another, we use the New York Alternate Scale II (also shown
below) if it produces a higher charge than Alternate Scale I.
The New York withdrawal charge may not exceed the withdrawal charge that would
normally apply to the contract. If a contribution has been in the contract for
more than 4 years and therefore would have no withdrawal charge, no withdrawal
charge will apply. Use of a New York Alternate Scale can only result in a lower
charge. We will compare the result of applying Alternate Scale I or II, as the
case may be, to the result of applying the normal withdrawal charge, and will
charge the lower withdrawal charge.
- ---------------------------------------------------------------------------------------
NY Alternate Scale I NY Alternate Scale II
- ---------------------------------------------------------------------------------------
Year of transfer
within fixed
Year of investment in fixed maturity maturity
option* option*
- ---------------------------------------------------------------------------------------
Within year 1 7% Within year 1 5%
2 6% 2 4%
3 5% 3 3%
4 4% 4 2%
After year 5 0% After year 5 0%
- ---------------------------------------------------------------------------------------
Not to exceed 1% times the number of years remaining in the fixed maturity option,
rounded to the higher number of years. In other words, if 4.3 years remain, it would
be a 5% charge.
- ---------------------------------------------------------------------------------------
* Measured from the contract date anniversary prior to the date of the
contribution or transfer.
If you take a withdrawal from an investment option other than the fixed
maturity options, the amount available for withdrawal without a withdrawal
charge is reduced. It will be reduced by the amount of the contribution in the
fixed maturity options to which no withdrawal charge applies.
For contracts issued in New York, you should consider that on the maturity date
of a fixed maturity option if we have not received your instructions for
allocation of your maturity value, we will transfer your maturity value to the
fixed maturity option with the shortest available
36 Charges and expenses
maturity. If we are not offering other fixed maturity options, we will transfer
your maturity value to the EQ/Alliance Money Market option.
The potential for lower withdrawal charges for withdrawals from the fixed
maturity options and the potential for a lower free withdrawal amount than what
that would normally apply, should be taken into account when deciding whether
to allocate amounts to, or transfer amounts to or from, the fixed maturity
options.
We will deduct the annual administrative charge and the withdrawal charge from
the variable investment options and the guaranteed interest option as discussed
above. If the amounts in those options are insufficient to cover the charges,
we reserve the right to deduct the charge from the fixed maturity options.
Charges deducted from the fixed maturity options are considered withdrawals
and, as such, will result in a market value adjustment.
GUARANTEED MINIMUM DEATH BENEFIT CHARGE
Annual ratchet to age 85. If you elect the Annual ratchet to age 85 enhanced
death benefit, we deduct a charge annually from your account value on each
contract date anniversary. The charge is equal to 0.20% of the Annual ratchet
to age 85 benefit base.
6% Roll up to age 85. If you elect the 6% Roll up to age 85 enhanced death
benefit, we deduct a charge annually from your account value on each contract
date anniversary. The charge is equal to 0.35% of the 6% Roll up to age 85
benefit base.
Greater of 6% Roll up to age 85 or Annual ratchet to age 85. If you elect this
enhanced death benefit, we deduct a charge annually from your account value on
each contract date anniversary. The charge is equal to 0.45% of the greater of
the 6% Roll up to age 85 or the Annual ratchet to age 85 benefit base.
There is no additional charge for the Standard death benefit.
LIVING BENEFIT CHARGE
If you elect the Living Benefit, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85, whichever occurs
first. The charge is equal to 0.45% of the applicable benefit base in effect on
the contract date anniversary.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options in order of the earliest maturity date(s) first. A market
value adjustment may apply. If those amounts are insufficient, we will deduct
all or a portion of the charge from the account for special dollar cost
averaging.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.35% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment options and
the guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options in the order of the earliest maturity date(s) first. A market
value adjustment may apply. If those amounts are insufficient, we will deduct
all or a portion of the charge from the account for special dollar cost
averaging.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (the rate is
1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit or the guaranteed minimum death benefit, or offer variable investment
options that invest in shares of either Trust that are not subject to the 12b-1
fee. Group arrangements include those in which a trustee or an employer, for
example, purchases contracts covering a group of individuals on a group basis.
Group arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements
Charges and expenses 37
that have been set up solely to buy contracts or that have been in existence
less than six months will not qualify for reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase
under such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
38 Charges and expenses
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
applicable guaranteed minimum death benefit. We determine the amount of the
death benefit (other than the applicable guaranteed minimum death benefit) and
any amount applicable under the Protection Plus feature, as of the date we
receive satisfactory proof of the annuitant's death, any required instructions
for the method of payment, information and forms necessary to effect payment.
The amount of the applicable guaranteed minimum death benefit will be such
guaranteed minimum death benefit as of the date of the annuitant's death,
adjusted for any subsequent withdrawals. The death benefit will be less a
deduction for any outstanding loan plus accrued interest on the date that the
death benefit payment is made (applies to Rollover TSA only).
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive this death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (new
owner) within five years after your death (or in a joint ownership situation,
the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin within one year after the non-annuitant
owner's death. Unless this alternative is elected, we will pay any cash value
five years after your death (or the death of the first owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor owner/annuitant
feature, we will increase the account value to equal
Payment of death benefit 39
your elected guaranteed minimum death benefit as of the date of your death if
such death benefit is greater than such account value, plus any amount
applicable under the Protection Plus feature and adjusted for any subsequent
withdrawals. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to
contributions made before your death. Withdrawal charges will apply if
additional contributions are made. These additional contributions will be
considered to be withdrawn only after all other amounts have been withdrawn. In
determining whether your applicable guaranteed minimum death benefit option
will continue to grow, we will use your surviving spouse's age (as of the date
we receive satisfactory proof of your death, any required instructions and the
information and forms necessary to effect the successor owner/annuitant
feature).
Where an NQ contract is owned by a Living Trust, as defined in the contract,
and at the time of the annuitant's death the annuitant's spouse is the sole
beneficiary of the Living Trust, the Trustee, as owner of the contract, may
request that the spouse be substituted as annuitant as of the date of the
annuitant's death. No further change of annuitant will be permitted.
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the applicable guaranteed
minimum death benefit as of the date of your death, if such death benefit is
greater than such account value, plus any amount applicable under the
Protection Plus feature, and adjusted for any subsequent withdrawals. The
beneficiary continuation option is available if we have received regulatory
clearance in your state. Where an IRA contract is owned in a custodial
individual retirement account, the custodian may reinvest the death benefit in
an Accumulator(R) Elite(SM) individual retirement annuity contract, using the
account beneficiary as the annuitant. Please contact our processing office for
further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected by
the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
40 Payment of death benefit
7. Tax information
- --------------------------------------------------------------------------------
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Elite(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions that can be made to all types of tax-favored retirement plans. In
addition to increasing amounts that can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator(R) Elite(SM)'s Dollar Cost Averaging, choice of
death benefits, selection of investment funds, guaranteed interest option,
fixed maturity options and its choices of pay-out options, as well as the
features and benefits of other permissible funding vehicles and the relative
costs of annuities and other arrangements. You should be aware that cost may
vary depending on the features and benefits made available and the charges and
expenses of the investment options or funds that you elect. See also Appendix
II at the end of this Prospectus for a discussion of QP contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
Tax information 41
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
Annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which should have no adverse tax effect, it is possible that the IRS could take
a contrary position or assert that the Protection Plus rider is not part of the
contract. IN SUCH A CASE, THE CHARGES FOR THE PROTECTION PLUS RIDER COULD BE
TREATED FOR FEDERAL INCOME TAX PURPOSES AS A PARTIAL WITHDRAWAL FROM THE
CONTRACT. If this were so, such a deemed withdrawal could be taxable, and for
contract owners under age 59-1/2, also subject to a tax penalty. Were the IRS to
take this position, Equitable would take all reasonable steps to attempt to
avoid this result, which would include amending the contract (with appropriate
notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the NQ
contract is another nonqualified deferred annuity contract (or life insurance
or endowment contract).
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Elite(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same on
both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Elite(SM) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
currently included in your gross income for federal income tax purposes.
Incidents of investment control could include among other items, the number of
investment options available under a contract and/or the frequency of transfers
available under the contract. In connection with the issuance of regulations
concerning investment diversification in 1986, the Treasury Department
announced that the diversification regulations did not provide guidance on
investor control but that guidance would be issued in the form of regulations
or rulings. As of the date of this prospectus, no such guidance has been
issued. It is not known whether such guidelines, if in fact issued, would have
retroactive adverse effect on existing contracts. We can not provide assurance
as to the terms or scope of any future guidance nor any
42 Tax information
assurance that such guidance would not be imposed on a retroactive basis to
contracts issued under this prospectus. We reserve the right to modify the
contract as necessary to attempt to prevent you from being considered the owner
of the assets of the separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets funding the account
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account. In an
individual retirement annuity, an insurance company issues an annuity contract
that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http:// www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Elite(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Elite(SM) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) ELITE(SM) CONTRACT
AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE PARAGRAPH ABOVE,
DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We have filed a request
with the IRS that the contract with the Protection Plus feature qualifies as to
form for use as a traditional IRA and Roth IRA, respectively. THERE IS NO
ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS THE IRS
QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may not invest in life
insurance contracts. Although we view the optional Protection Plus benefit as
an investment protection feature which should have no adverse tax effect and
not as life insurance, it is possible that the IRS could take a contrary
position regarding tax qualification or assert that the Protection Plus rider
is not a permissible part of an individual retirement annuity contract. We
further view the optional Protection Plus benefit as part of the contract.
There is also a risk that the IRS may take the position that the optional
Protection Plus benefit is not part of the annuity contract. In such a case,
the charges for the Protection Plus rider could be treated for federal income
tax purposes as a partial withdrawal from the contract. If this were so, such a
deemed withdrawal could be taxable, and for contract owners under age 59-1/2,
also subject to a tax penalty. Were the IRS to take any adverse position,
Equitable would take all reasonable steps to attempt to avoid any adverse
result, which would include amending the contract (with appropriate notice to
you). YOU SHOULD DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER
PURCHASING AN ACCUMULATOR(R) ELITE(SM) IRA OR ACCUMULATOR(R) ELITE(SM) ROTH IRA
WITH THE OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
Tax information 43
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer related to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach age 70-1/2.
Regular contributions for any year to a Roth IRA can be made at any time during
your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA, surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
for traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally there are two types of funding vehicles available for 403(b)
arrangements -- an annuity contract under Section 403(b)(1) of the Code or a
custodial account which invests only in mutual funds and which is treated as an
annuity contract under Section 403(b)(7) of which the Code. Both types of
403(b) arrangements qualify for tax deferral.
PROTECTION PLUS FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR ROLLOVER TSA CONTRACTS, SUBJECT TO
STATE AND CONTRACT AVAILABILITY. THERE IS NO ASSURANCE THAT THE CONTRACT WITH
THE PROTECTION PLUS FEATURE
44 Tax information
MEETS THE QUALIFICATION REQUIREMENTS FOR TSAS. There is a limit to the amount
of life insurance benefits that TSAs may offer. Although we view the optional
Protection Plus benefit as an investment protection feature which should have
no adverse tax effect and not as a life insurance benefit, it is possible that
the IRS could take a contrary position regarding tax qualification or assert
that the Protection Plus rider is not a permissible part of a TSA contract. If
the IRS were to take the position that the optional Protection Plus benefit is
not part of the contract, in such a case, the charges for the Protection Plus
rider could be treated for federal income tax purposes as a partial withdrawal
from the contract. If this were so, such a deemed withdrawal could affect the
tax qualification of the TSA and could be taxable. Were the IRS to take any
adverse position, Equitable would take all reasonable steps to attempt to avoid
any adverse result, which would include amending the contract (with appropriate
notice to you). YOU SHOULD DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD
CONSIDER PURCHASING AN ACCUMULATOR(R) ELITE(SM) ROLLOVER TSA CONTRACT WITH THE
OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Elite(SM) Rollover TSA contract:
o a rollover from another eligible retirement plan, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another, because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds;
and
o the Equitable Accumulator(R) Elite(SM) contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Elite(SM) Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Elite(SM) Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to withdrawal restrictions may depend on the source
of the funds used to establish the Accumulator(R) Elite(SM) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of the distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
Tax information 45
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation from service, if later. These rules are discussed in greater
detail in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution is
includable in your gross income. This may result in tax being withheld even
though the Roth IRA distribution is ultimately not taxable. You can elect out
of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o hardship withdrawals; or
46 Tax information
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
Tax information 47
8. More information
- --------------------------------------------------------------------------------
ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. The results of the Separate Account's operations are
accounted for without regard to Equitable Life's other operations.
The Separate Account is registered under the Investment Company Act of 1940 and
is classified by that act as a "unit investment trust." The SEC, however, does
not manage or supervise Equitable Life or the Separate Account.
Each subaccount (variable investment option) within the Separate Account
invests solely in class IB shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from the Separate Account or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate the Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against the Separate Account
or a variable investment option directly);
(5) to deregister the Separate Account under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Account; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999 EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to Class
IB shares, and other aspects of its operations, appears in the prospectuses for
each Trust, which are attached at the end of this Prospectus, or in the
respective SAIs which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table below are illustrative
only and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your financial professional.
For example, the rates to maturity for new allocations as of February 15, 2002
and the related price per $100 of maturity value were as shown below:
- ------------------------------------------------------------------------
Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100
maturity year February 15, 2002 of maturity value
- ------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
2009 5.08% $ 70.67
- ------------------------------------------------------------------------
48 More information
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Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100
maturity year February 15, 2002 of maturity value
- ------------------------------------------------------------------------
2010 5.29% $ 66.19
2011 5.47% $ 61.90
2012 5.59% $ 58.03
- ------------------------------------------------------------------------
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw any of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date by adjusting the rates on new fixed maturity options
established on that date to reflect a similar maturity date as the
fixed maturity option from which the withdrawal is being made (unless
the withdrawal is being made on an anniversary of the original
contribution to the fixed maturity option, in which case the amount
will be based on the then current rate of maturity).
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix II at the end of this Prospectus for
an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We expect the rates to maturity for the fixed maturity options to be influenced
by, but not necessarily correspond to, among other things, the yields that we
can expect to realize on the separate account's investments from time to time.
Our current plans are to invest in fixed-income obligations, including
corporate bonds, mortgage-backed and asset-backed securities, and government
and agency issues having durations in the aggregate consistent with those of
the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the guaranteed interest option and the fixed
maturity options, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to
More information 49
the general account, however, may be subject to certain provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits" earlier in
this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgement of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgement of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT
EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer, or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to the guaranteed interest option will receive the
crediting rate in effect on that business day for the specified time period.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day
(unless a rate lock-in is applicable).
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that business day. At
certain times, we may offer the opportunity to lock in the interest rate for
an initial contribution to be received under Section 1035 exchanges and
trustee to trustee transfers. Your financial professional can provide
information, or you can call our processing office.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity in
effect for that fixed maturity option on the business day of the transfer.
o Transfers to the guaranteed interest option will receive the crediting rate
in effect on that business day for the specified time period.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees; or
50 More information
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in the prospectuses for the Trusts or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Account require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001 in this prospectus by
reference to the 2001 Annual Report on Form 10-K are incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI is
available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. If your individual
retirement annuity contract is held in your custodial individual retirement
account, you may only assign or transfer ownership of such an IRA contract to
yourself. Loans are not available and you cannot assign Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contracts as security for a loan or other
obligation. If the employer that provided the funds does not restrict them,
loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules. In the case of such a transfer, which involves
a surrender of your contract, we will impose a withdrawal charge, if one
applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC ("AXA Advisors") and
AXA Distributors, LLC ("AXA Distributors"). Both AXA Advisors and AXA
Distributors serve as principal underwriters of Separate Account No. 49. The
offering of the contracts is intended to be continuous.
AXA Advisors (the successor to EQ Financial Consultants, Inc.), an affiliate of
Equitable Life, and AXA Distributors, an indirect wholly owned subsidiary of
Equitable Life, are registered with the SEC as broker dealers and are members
of the National Association of Securities
More information 51
Dealers, Inc. Their principal business address is 1290 Avenue of the Americas,
New York, NY 10104. Both broker dealers also act as distributors for other
Equitable Life annuity products.
AXA Distributors is a successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. ("EDI"). Like AXA Distributors, EDI
was owned by Equitable Holdings, LLC.
The contracts are sold by financial professionals of AXA Advisors and its
affiliates and by financial professionals of AXA Distributors, as well as by
affiliated and unaffiliated broker dealers who have entered into selling
agreements with AXA Distributors.
We pay broker-dealer sales compensation that will generally not exceed an
amount equal to 5% of total contributions made under the contracts. AXA
Distributors may also receive compensation and reimbursement for its marketing
services under the terms of its distribution agreement with Equitable Life.
Broker-dealers receiving sales compensation will generally pay a portion of it
to their financial professional as commissions related to sales of the
contracts.
52 More information
9. Investment performance
- --------------------------------------------------------------------------------
The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the withdrawal charge, the highest optional enhanced death benefit charge, the
optional Living Benefit charge, the charge for Protection Plus and the annual
administrative charge, but does not reflect the charges designed to approximate
certain taxes imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts will be offered
for the first time in 2002.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. The results shown for the EQ/Alliance Money
Market and EQ/Alliance Common Stock options for periods before March 22, 1985
reflect the results of the variable investment options that preceded them. The
"Since portfolio inception" figures for these options are based on the date of
inception of the preceding variable investment options. We have adjusted these
results to reflect the maximum investment advisory fee payable for the
portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001. and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
Investment performance 53
TABLE
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
--------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------------------------------------------------------------
EQ/Aggressive Stock (34.39)% (5.76)% ( 5.73)%
EQ/Alliance Common Stock (20.19)% 6.83% 7.32%
EQ/Alliance Global (29.56)% 1.11% 1.38%
EQ/Alliance Growth Investors (22.04)% 4.48% 4.53%
EQ/Alliance Money Market ( 6.11)% 2.12% 1.87%
EQ/Alliance Premier Growth (33.20)% -- (16.02)%
EQ/Alliance Small Cap Growth (22.64)% -- 6.47%
EQ/Alliance Technology (33.67)% -- (41.24)%
EQ/Bernstein Diversified Value ( 6.57)% -- 1.99%
EQ/Capital Guardian International (30.17)% -- ( 8.91)%
EQ/Capital Guardian Research (11.60)% -- ( 0.84)%
EQ/Capital Guardian U.S. Equity (11.59)% -- ( 2.99)%
EQ/Emerging Markets Equity (14.69)% -- ( 9.38)%
EQ/Equity 500 Index (21.59)% 7.07% 7.55%
EQ/Evergreen Omega (26.36)% -- (11.85)%
EQ/FI Mid Cap (22.81)% -- (17.18)%
EQ/FI Small/Mid Cap Value ( 5.68)% -- 1.59%
EQ/High Yield ( 8.94)% (2.99)% ( 2.68)%
EQ/International Equity Index (34.67)% -- ( 5.55)%
EQ/J.P. Morgan Core Bond ( 1.80)% -- 2.72%
EQ/Janus Large Cap Growth (32.21)% -- (35.14)%
EQ/Lazard Small Cap Value 7.84% -- 3.21%
EQ/Mercury Basic Value Equity ( 4.17)% -- 10.83%
EQ/MFS Emerging Growth Companies (43.12)% -- 6.58%
EQ/MFS Investors Trust (25.34)% -- ( 7.87)%
EQ/MFS Research (31.09)% -- 3.17%
EQ/Putnam Growth & Income Value (16.32)% -- 2.70%
EQ/Putnam International Equity (30.80)% -- 5.26%
EQ/Putnam Voyager (33.68)% -- 4.15%
EQ/Small Company Index ( 7.59)% -- ( 0.07)%
Length of portfolio period
-----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- -----------------------------------------------------------------------------------------
EQ/Aggressive Stock (13.27)% (5.76)% 1.03% 8.95%
EQ/Alliance Common Stock ( 6.18)% 6.83% 9.45% 10.69%
EQ/Alliance Global ( 8.43)% 1.11% 5.46% 5.60%
EQ/Alliance Growth Investors ( 3.73)% 4.48% 5.89% 8.77%
EQ/Alliance Money Market 0.23% 2.12% 1.42% 3.32%
EQ/Alliance Premier Growth -- -- -- (16.01)%
EQ/Alliance Small Cap Growth 3.51% -- -- 6.47%
EQ/Alliance Technology -- -- -- (41.24)%
EQ/Bernstein Diversified Value ( 3.09)% -- -- 1.99%
EQ/Capital Guardian International -- -- -- ( 8.91)%
EQ/Capital Guardian Research -- -- -- ( 0.85)%
EQ/Capital Guardian U.S. Equity -- -- -- ( 2.99)%
EQ/Emerging Markets Equity ( 1.13)% -- -- (12.41)%
EQ/Equity 500 Index ( 6.32)% 7.07% -- 10.39%
EQ/Evergreen Omega (11.84)% -- -- (11.84)%
EQ/FI Mid Cap -- -- -- (17.83)%
EQ/FI Small/Mid Cap Value ( 0.93)% -- -- 0.93%
EQ/High Yield ( 8.83)% (2.99)% 3.82% 4.16%
EQ/International Equity Index (12.72)% -- -- ( 5.54)%
EQ/J.P. Morgan Core Bond 1.26% -- -- 2.72%
EQ/Janus Large Cap Growth -- -- -- (35.64)%
EQ/Lazard Small Cap Value 7.95% -- -- 3.20%
EQ/Mercury Basic Value Equity 7.55% -- -- 10.83%
EQ/MFS Emerging Growth Companies ( 7.13)% -- -- 6.58%
EQ/MFS Investors Trust ( 7.87)% -- -- ( 7.87)%
EQ/MFS Research ( 7.72)% -- -- 3.17%
EQ/Putnam Growth & Income Value ( 5.28)% -- -- 2.70%
EQ/Putnam International Equity ( 1.28)% -- -- 5.26%
EQ/Putnam Voyager (11.66)% -- -- 4.15%
EQ/Small Company Index 1.46% -- -- ( 0.07)%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October
16, 1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity,
EQ/MFS Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1,
1997); EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap
Value and EQ/Janus Large Cap Growth (September 5, 2000); EQ/Balanced (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Growth and Income, EQ/Alliance
International, EQ/Alliance Quality Bond, EQ/AXP New Dimensions and EQ/AXP
Strategy Aggressive (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Calvert Socially
Responsible (September 1, 1999); EQ/Alliance Technology (May 1, 2000);
EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid Cap and
EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus (August 31,
2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA Premier
VIP International Equity, AXA Premier VIP Large Cap Core Equity, AXA
Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA Premier
VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value and AXA
Premier VIP Technology (December 31, 2001). No performance information is
provided for portfolios and/or variable investment options with inception
dates after December 31, 2000.
54 Investment performance
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the portfolios,
including the measurements that compare the performance to market indices that
serve as benchmarks. Market indices are not subject to any charges for
investment advisory fees, brokerage commissions or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use them
because they are widely known and may help you to understand the universe of
securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) performance relative to other variable annuity
products. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges applicable
under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
withdrawal charge, the optional enhanced death benefit charge, the optional
Living Benefit charge, the optional Protection Plus charge, the annual
administrative charge, and any charge designed to approximate certain taxes
that may be imposed on us, such as premium taxes in your state. For more
information, see "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option" in the SAI.
Investment performance 55
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2001 is considered to be a part of this prospectus because they are
incorporated by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
56 Incorporation of certain documents by reference
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 49 with the same daily asset charges of 1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001
- -----------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
--------------------------------------------------------------
2001 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 49.16 $ 66.77 $ 78.30 $ 67.13 $ 68.19
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 402 420 141 16 --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $203.81 $ 232.08 $ 275.01 $ 223.79 $ 176.22
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 661 618 255 35 1
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 27.16 $ 26.65 $ 25.55 $ 24.80 $ 23.98
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 13,759 9,875 5,805 349 --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.07 $ 9.45 $ 11.77 -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 18,765 17,412 5,630 -- --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 14.11 $ 16.53 $ 14.78 $ 11.77 $ 12.52
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,423 3,189 818 211 --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.91 $ 6.60 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 7,562 5,505 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Balanced
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 39.15 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 97 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.78 $ 11.61 $ 12.04 $ 11.81 --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,000 3,700 1,532 315 --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.62 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 13 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.64 $ 11.09 $ 13.93 -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 5,697 5,514 1,286 -- --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.65 $ 11.04 $ 10.60 -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,151 2,953 987 -- --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U. S. Equity
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.09 $ 10.46 $ 10.26 -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,886 5,538 2,436 -- --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.04 $ 6.47 $ 10.97 $ 5.70 --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,043 2,958 962 203 --
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index
- -----------------------------------------------------------------------------------------------------------------------------
Unit value $ 23.93 $ 27.69 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,601 6,057 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
---------------------------------------------------------------
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.66 $ 9.38 $ 10.80 -- --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 141 78 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.51 $ 9.99 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,644 617 -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.07 $ 10.82 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,090 251 -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 22.86 $ 23.07 $ 25.73 $ 27.12 $ 29.13
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 1,835 1,211 574 170 2
- ------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.81 $ 12.02 $ 14.82 $ 11.82 --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,518 2,531 992 248 --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.10 $ 11.40 $ 10.39 $ 10.73 --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 10,537 5,112 2,026 379 --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.36 $ 8.39 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,856 1,315 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.37 $ 10.68 $ 9.15 $ 9.14 --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,274 2,109 98 344
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Marisco Focus
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.33 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 78 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 17.00 $ 16.37 $ 14.88 $ 12.71 $ 11.58
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 1,559 1,079 173 -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 14.20 $ 21.88 $ 27.40 $ 16.03 $ 12.11
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 5,707 5,759 1,680 200 2
- ------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.64 $ 10.45 $ 10.70 -- --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 8,655 7,052 2,906 -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.18 $ 15.84 $ 16.99 $ 14.02 $ 11.48
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,188 5,917 1,725 410 1
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.94 $ 13.02 $ 12.39 $ 12.76 $ 11.50
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 4,156 1,755 978 714 17
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 13.39 $ 17.34 $ 20.10 $ 12.75 $ 10.84
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,126 2,033 771 422 4
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.75 $ 17.36 $ 21.20 $ 16.54 $ 12.33
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,221 1,658 576 282 --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.90 $ 10.86 $ 11.42 $ 9.61 --
- ------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 1,535 1,382 522 211 --
- ------------------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Elite(SM) QP contract should discuss with their tax advisers whether this is an
appropriate investment vehicle for the employer's plan. Trustees should consider
whether the plan provisions permit the investment of plan assets in the QP
contract, the distribution of such an annuity, the purchase of the guaranteed
minimum income benefit, and the payment of death benefits in accordance with the
requirements of the federal income tax rules. The QP contract and this
prospectus should be reviewed in full, and the following factors, among others,
should be noted. Assuming continued plan qualification and operation, earnings
on qualified plan assets will accumulate value on a tax-deferred basis even if
the plan is not funded by the Equitable Accumulator(R) Elite(SM) QP contract or
another annuity. Therefore, you should purchase an Equitable Accumulator(R)
Elite(SM) QP contract to fund a plan for the contract's features and benefits
other than tax deferral, after considering the relative costs and benefits of
annuity contracts and other types of arrangements and funding vehicles. This QP
contract accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
We will not accept defined benefit plans. For defined contribution plans, we
will only accept transfers from another defined contribution plan or a change
of investment vehicles in the plan. Only one additional transfer contribution
may be made per contract year. If overfunding of a plan occurs or amounts
attributable to an excess contribution must be withdrawn, withdrawals from the
QP contract may be required. A withdrawal charge and/or market value adjustment
may apply.
Equitable Life will not perform or provide any plan recordkeeping services with
respect to the QP contracts. The plan's administrator will be solely
responsible for performing or providing for all such services. There is no loan
feature offered under the QP contracts, so if the plan provides for loans and a
participant/employee takes a loan from the plan, other plan assets must be used
as the source of the loan and any loan repayments must be credited to other
investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70-1/2; and
o the guaranteed minimum income benefit under Living Benefit may not be an
appropriate feature for annuitants who are older than age 60-1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,914 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
Hypothetical assumed rate to maturity on February 15, 2007
5.00% 9.00%
- -------------------------------------------------------------------------------------------------------------------------------
As of February 15, 2007 (before withdrawal)
- -------------------------------------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,082 $ 119,503
- -------------------------------------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,104 $ 131,104
- -------------------------------------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,978 $ (11,601)
- -------------------------------------------------------------------------------------------------------------------------------
On February 15, 2007 (after withdrawal)
- -------------------------------------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,504 $ (4,854)
- -------------------------------------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,496 $ 54,854
- -------------------------------------------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,608 $ 76,250
- -------------------------------------------------------------------------------------------------------------------------------
(7) Maturity value $120,091 $ 106,965
- -------------------------------------------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,082 $ 69,503
- -------------------------------------------------------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized. The market value is computed differently
if you withdraw amounts on a date other than the anniversary of the
establishment of the fixed maturity option.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Appendix IV: Enhanced death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the enhanced death benefit, if elected.
The following illustrates the enhanced death benefit calculation. Assuming
$100,000 is allocated to the variable investment options (with no allocation to
the EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market,
the guaranteed interest option or the fixed maturity options), no additional
contributions, no transfers, no withdrawals and no loans under a Rollover TSA
contract, the enhanced death benefit for an annuitant age 45 would be
calculated as follows:
- --------------------------------------------------------------------------------------
End of 6% Roll-up to age 85 Annual ratchet to age 85
contract enhanced enhanced
year Account value death benefit(1) death benefit
- --------------------------------------------------------------------------------------
1 $105,000 $ 106,000(1) $ 105,000(3)
- --------------------------------------------------------------------------------------
2 $115,500 $ 112,360(2) $ 115,500(3)
- --------------------------------------------------------------------------------------
3 $129,360 $ 119,102(2) $ 129,360(3)
- --------------------------------------------------------------------------------------
4 $103,488 $ 126,248(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
5 $113,837 $ 133,823(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
6 $127,497 $ 141,852(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
7 $127,497 $ 150,363(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
6% ROLL-UP TO AGE 85
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the enhanced death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current enhanced death benefit.
ANNUAL RATCHET TO AGE 85
(3) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(4) At the end of contract years 4 through 7, the enhanced death benefit is the
enhanced death benefit at the end of the prior year since it is equal to or
higher than the current account value.
GREATER OF THE 6% ROLL-UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85
The enhanced death benefit under this option for each year shown would be the
greater of the amounts shown under the 6% Roll-up to age 85 or the Annual
ratchet to age 85.
Appendix IV: Enhanced death benefit example D-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 23
Custodian and Independent Accountants 24
Yield Information for the EQ/Alliance Money Market Option, EQ/Alliance
Quality Bond Option and EQ/High Yield Option 24
Distribution of the contracts 25
Financial Statements 26
How to obtain an Equitable Accumulator(R) Elite(SM) Statement of Additional
Information for Separate Account No. 49
Send this request form to:
Equitable Accumulator(R) Elite(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Please send me an Equitable Accumulator(R) Elite(SM) SAI for Separate Account
No. 49 dated May 1, 2002.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
Equitable Accumulator(R) Select(SM)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) SELECTSM
Equitable Accumulator(R) Select(SM) is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options, the guaranteed interest option or fixed maturity
options ("investment options"). There is no withdrawal charge under the
contract. However, we deduct a distribution charge calculated as a percentage
of the amounts in the variable investment options. We deduct this charge for
the life of the contract. Certain features and benefits described in this
prospectus may vary in your state; all features and benefits may not be
available in all states.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate o EQ/Marsico Focus*
Government Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager(2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
- --------------------------------------------------------------------------------
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"). Your
investment results in a variable investment option will depend on the
investment performance of the related portfolio.
GUARANTEED INTEREST OPTION. You may allocate amounts to the guaranteed interest
option. This option is part of our general account and pays interest at
guaranteed rates.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
processing office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be
obtained from the SEC's Web site at http://www.sec.gov. The table of contents
for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
X00293/Select New Series 2002 Portfolio
Contents of this prospectus
- --------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) SELECT(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Select(SM) at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 22
Your benefit base 23
Annuity purchase factors 24
Our Living Benefit option 24
Guaranteed minimum death benefit 25
Your right to cancel within a certain number of days 26
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 27
- --------------------------------------------------------------------------------
Your account value and cash value 27
Your contract's value in the variable investment options 27
Your contract's value in the guaranteed interest option 27
Your contract's value in the fixed maturity options 27
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 28
- --------------------------------------------------------------------------------
Transferring your account value 28
Disruptive transfer activity 28
Rebalancing your account value 28
- ----------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 30
- --------------------------------------------------------------------------------
Withdrawing your account value 30
How withdrawals are taken from your account value 31
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 31
Loans under Rollover TSA contracts 31
Surrendering your contract to receive its cash value 32
When to expect payments 32
Your annuity payout options 32
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5. CHARGES AND EXPENSES 34
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 34
Charges that the Trusts deduct 35
Group or sponsored arrangements 35
Other distribution arrangements 35
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 36
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 36
How death benefit payment is made 36
Beneficiary continuation option 37
- --------------------------------------------------------------------------------
7. TAX INFORMATION 38
- --------------------------------------------------------------------------------
Overview 38
Buying a contract to fund a retirement arrangement 38
Transfers among investment options 38
Taxation of nonqualified annuities 38
Individual retirement arrangements (IRAs) 40
Contributions 40
Withdrawals and Distributions 41
Tax-Sheltered Annuity contracts (TSAs) 41
Federal and state income tax withholding and
information reporting 43
Impact of taxes to Equitable Life 44
- --------------------------------------------------------------------------------
8. MORE INFORMATION 45
- --------------------------------------------------------------------------------
About Separate Account No. 49 45
About the Trusts 45
About our fixed maturity options 45
About the general account 46
About other methods of payment 47
Dates and prices at which contract events occur 47
About your voting rights 47
About legal proceedings 48
About our independent accountants 48
Financial statements 48
Transfers of ownership, collateral assignments, loans
and borrowing 48
Distribution of the contracts 48
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9. INVESTMENT PERFORMANCE 50
- --------------------------------------------------------------------------------
Communicating performance data 53
- --------------------------------------------------------------------------------
10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 54
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Market value adjustment example A-1
II -- Enhanced death benefit example B-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE IN
TERM PROSPECTUS
account value 27
annuitant 17
annuity payout options 32
annuity purchase factors 24
beneficiary 36
benefit base 23
business day 47
cash value 27
contract date 9
contract date anniversary 9
contract year 9
contributions to traditional IRAs 40
regular contributions 40
rollovers and transfers 40
disruptive transfer activity 28
EQAccess 6
ERISA 31
fixed maturity options 21
guaranteed interest option 21
guaranteed minimum death benefit 25
guaranteed minimum income benefit 24
IRA 40
PAGE IN
TERM PROSPECTUS
IRS 38
investment options 17
Living Benefit 24
loan reserve account 31
market adjusted amount 21
market timing 28
market value adjustment 21
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
rate to maturity 21
Rollover IRA 40
Roth IRA 40
SAI cover
SEC cover
TOPS 6
Trusts cover
traditional IRA 40
unit 27
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your financial professional can provide further explanation about
your contract or supplemental materials.
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
Living Benefit Guaranteed Minimum Income Benefit
Guaranteed Interest Option Guaranteed Interest Account
- --------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
P.O. Box 13014
Newark, NJ 07188-0014
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR
MAIL
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options (not available through
EQAccess);
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith, or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) 12 month dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Select(SM) at a glance -- key features
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL INVESTMENT Equitable Accumulator(R) Select(SM)'s variable investment options invest in different portfolios
MANAGEMENT managed by professional investment advisers.
- ----------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY OPTIONS o Fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any value
that you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
- ----------------------------------------------------------------------------------------------------------------------------------
GUARANTEED INTEREST o Principal and interest guarantees.
OPTION o Interest rates set periodically.
- ----------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), or tax sheltered
annuity (TSA) you should be aware that such annuities do not provide tax deferral benefits beyond
those already provided by the Internal Revenue Code. Before purchasing one of these annuities, you
should consider whether its features and benefits beyond tax deferral meet your needs and goals. You
may also want to consider the relative features, benefits and costs of these annuities compared with
any other investment that you may use in connection with your retirement plan or arrangement. (For
more information, see "Tax information," later in this Prospectus and in the SAI.)
- ----------------------------------------------------------------------------------------------------------------------------------
LIVING BENEFIT PROTECTION Living Benefit provides a guaranteed minimum income benefit. The guaranteed minimum income benefit
provides income protection for you while the annuitant lives.
- ----------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $500
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
Maximum contribution limitations may apply.
- ----------------------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur income tax and a tax penalty.
- ----------------------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit options
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
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8 Equitable Accumulator(R) Select(SM) at a glance -- key features
- ----------------------------------------------------------------------------------------------------------------------------------
FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality and expense
risks, administrative charges and distribution charges at an annual rate of 1.70%.
o The charges for the guaranteed minimum death benefits range from 0.0% to 0.45%, annually, of the
applicable benefit base. The benefit base is described under "Your benefit base" in "Contract features
and benefits" later in this Prospectus.
o Annual 0.45% of the applicable benefit base charge for the optional Living Benefit until you
exercise your guaranteed minimum income benefit, elect another annuity payout option or the contract
date anniversary after the annuitant reaches age 85, whichever occurs first.
o If your account value at the end of the contract year is less than $50,000, we deduct an annual
administrative charge equal to $30 or during the first two contract years 2% of your account value, if
less. If your account value, on the contract date anniversary, is $50,000 or more, we will not deduct
the charge
o Annual 0.35% Protection Plus charge for this optional death benefit.
o No sales charge deducted at the time you make contributions and no withdrawal charge.
------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we receive
the properly completed and signed application, along with any other required documents, and your
initial contribution. Your contract date will be shown in your contract. The 12-month period beginning
on your contract date and each 12-month period after that date is a "contract year." The end of each
12-month period is your "contract date anniversary."
------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. This charge is generally deducted from the amount applied to an annuity payout
option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.20%
annually, 12b-1 fees of 0.25% annually and other expenses.
- ----------------------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-85
Rollover IRA, Roth Conversion IRA and Rollover TSA: 20-85
- ------------------------------------------------------------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional or call us, if you have questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Select(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this Prospectus.
The fixed maturity options, guaranteed interest option and the 12-month dollar
cost averaging account are not covered by the fee table and examples. However,
the annual administrative charge does apply to the fixed maturity options and
the guaranteed interest option. A market value adjustment (up or down) may
apply as a result of a withdrawal, transfer, or surrender of amounts from a
fixed maturity option.
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks 1.10%
Administrative 0.25%
Distribution 0.35%
----
Total annual expenses 1.70%
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary is less than $50,000(1) $ 30
If your account value on a contract date anniversary is $50,000 or more $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Charge if you elect a Variable Immediate Annuity payout option $350
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- ------------------------------------------------------------------------------------------------------------------------------------
GUARANTEED MINIMUM DEATH BENEFIT CHARGE (calculated as a percentage of the applicable
benefit base. Deducted annually on each contract date anniversary.)
Standard death benefit 0.00%
Annual Ratchet to age 85 0.20% of the Annual Ratchet to age 85
benefit base
6% Roll-up to age 85 0.35% of the 6% roll-up to age 85
benefit base
Greater of 6% Roll-up to age 85 or Annual Ratchet to age 85 0.45% of the greater of the 6% roll-up
to age 85 benefit base or the Annual
Ratchet to age 85 benefit base, as
applicable
- ------------------------------------------------------------------------------------------------------------------------------------
LIVING BENEFIT CHARGE (calculated as a percentage of the applicable benefit base. Deducted
annually on each contract date anniversary.) 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
PROTECTION PLUS BENEFIT charge (calculated as a percentage of the account value. Deducted
annually on each contract date anniversary.) 0.35%
- ------------------------------------------------------------------------------------------------------------------------------------
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
Net
total annual
Management Fees Other expenses expenses (After
(After expense (After expense expense
Portfolio Name limitation)(2) 12b-1 Fees(3) limitation)(4) limitation)(5)
- ------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- ------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.08% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- ------------------------------------------------------------------------------------------------------------------
Notes:
(1) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(2) The management fees for each Portfolio cannot be increased without a vote
of that Portfolio's shareholders. See footnote (5) for any expense
limitation agreement information.
Fee table 11
(3) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(4) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Also, initial seed capital was invested for the
Portfolios of the AXA Premier VIP Trust on December 31, 2001, thus, "Other
Expenses" shown are estimated. See footnote (5) for any expense limitation
agreement information.
(5) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each Portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
AXA PREMIER VIP TRUST:
- ----------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- ----------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ----------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- ----------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- ----------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected Living Benefit, the enhanced death benefit option based on the
greater of the 6% roll up to age 85 or the annual ratchet to age 85 and
Protection Plus) would pay in the situation illustrated. We assume that a
$1,000 contribution is invested in one of the variable investment options
listed and a 5% annual return is earned on the assets in that option.(1) The
annual administrative charge is based on the charges that apply to a mix of
estimated contract sizes, resulting in an estimated administrative charge for
the purpose of these examples of $0.05 per $1,000.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods (as applicable) included in the
examples.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
At the end of each period shown,
the expenses would be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
AXA Premier VIP Core Bond $ 31.55 $ 115.13 $ 202.16 $ 435.92
AXA Premier VIP Health Care $ 41.00 $ 142.56 $ 246.26 $ 515.41
AXA Premier VIP International Equity $ 40.47 $ 141.05 $ 243.86 $ 511.20
AXA Premier VIP Large Cap Core Equity $ 35.75 $ 127.39 $ 221.97 $ 472.19
AXA Premier VIP Large Cap Growth $ 35.75 $ 127.39 $ 221.97 $ 472.19
AXA Premier VIP Large Cap Value $ 35.75 $ 127.39 $ 221.97 $ 472.19
AXA Premier VIP Small/Mid Cap Growth $ 38.37 $ 134.99 $ 234.19 $ 494.09
AXA Premier VIP Small/Mid Cap Value $ 38.37 $ 134.99 $ 234.19 $ 494.09
AXA Premier VIP Technology $ 41.00 $ 142.56 $ 246.26 $ 515.41
EQ/Aggressive Stock $ 31.44 $ 114.82 $ 201.66 $ 435.00
EQ/Alliance Common Stock $ 29.76 $ 109.89 $ 193.63 $ 420.04
EQ/Alliance Global $ 33.12 $ 119.74 $ 209.63 $ 449.70
EQ/Alliance Growth and Income $ 30.81 $ 112.97 $ 198.65 $ 429.42
EQ/Alliance Growth Investors $ 30.81 $ 112.97 $ 198.65 $ 429.42
EQ/Alliance Intermediate Government
Securities $ 30.71 $ 112.67 $ 198.15 $ 428.49
EQ/Alliance International $ 35.75 $ 127.39 $ 221.97 $ 472.19
EQ/Alliance Money Market $ 28.40 $ 105.87 $ 187.06 $ 407.70
EQ/Alliance Premier Growth $ 33.65 $ 121.27 $ 212.11 $ 454.25
EQ/Alliance Quality Bond $ 30.50 $ 112.05 $ 197.15 $ 426.62
EQ/Alliance Small Cap Growth $ 32.70 $ 118.51 $ 207.64 $ 446.05
EQ/Alliance Technology $ 33.65 $ 121.27 $ 212.11 $ 454.25
EQ/AXP New Dimensions $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/AXP Strategy Aggressive $ 32.07 $ 116.67 $ 204.65 $ 440.54
EQ/Balanced $ 31.02 $ 113.59 $ 199.65 $ 431.28
EQ/Bernstein Diversified Value $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/Calvert Socially Responsible $ 32.60 $ 118.20 $ 207.14 $ 445.14
EQ/Capital Guardian International $ 34.17 $ 122.80 $ 214.58 $ 458.77
EQ/Capital Guardian Research $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/Capital Guardian U.S. Equity $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/Emerging Markets Equity $ 40.47 $ 141.05 $ 243.86 $ 511.20
EQ/Equity 500 Index $ 27.46 $ 103.08 $ 182.49 $ 399.06
EQ/Evergreen Omega $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/FI Mid Cap $ 32.07 $ 116.67 $ 204.65 $ 440.54
EQ/FI Small/Mid Cap Value $ 33.12 $ 119.74 $ 209.63 $ 449.70
EQ/High Yield $ 31.23 $ 114.21 $ 200.65 $ 433.14
EQ/International Equity Index $ 33.12 $ 119.74 $ 209.63 $ 449.70
EQ/J.P. Morgan Core Bond $ 29.97 $ 110.51 $ 194.63 $ 421.93
EQ/Janus Large Cap Growth $ 33.65 $ 121.27 $ 212.11 $ 454.25
EQ/Lazard Small Cap Value $ 33.12 $ 119.74 $ 209.63 $ 449.70
EQ/Marsico Focus $ 33.65 $ 121.27 $ 212.11 $ 454.25
EQ/Mercury Basic Value Equity $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/MFS Emerging Growth Companies $ 31.76 $ 115.75 $ 203.15 $ 437.77
EQ/MFS Investors Trust $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/MFS Research $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/Putnam Growth & Income Value $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/Putnam International Equity $ 34.70 $ 124.33 $ 217.05 $ 463.27
Fee table 13
At the end of each period shown,
the expenses would be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
EQ/Putnam Voyager $ 31.55 $ 115.13 $ 202.16 $ 435.92
EQ/Small Company Index $ 30.50 $ 112.05 $ 197.15 $ 426.62
(1) The amount accumulated from the $1,000 contribution could not be paid in the
form of an annuity payout option at the end of any of the periods shown in
the examples. This is because if the amount applied to purchase an annuity
payout option is less than $2,000, or the initial payment is less than $20,
we may pay the amount to you in a single sum instead of payments under an
annuity payout option. See "Accessing your money," later in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $5.44 based on the average amount
applied to annuity payout options in 2001. See "Annuity administrative fee" in
"Charges and expenses," later in this Prospectus.
14 Fee table
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you
to purchase a contract. You may make additional contributions of at least $500
each, subject to limitations noted below. The following table summarizes our
rules regarding contributions to your contract. All ages in the table refer to
the age of the annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
Available
Contract for annuitant Limitations on
type issue ages Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 85 o After-tax money. o No additional contributions after age 86.
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue Code.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 85 o Eligible rollover distributions from TSA con- o No rollover or direct transfer
tracts or other 403(b) arrangements, qualified contributions after age 86.
plans, and governmental EDC plans.
o Rollovers from another traditional o Contributions after age 70-1/2 must
individual retirement arrangement. be net of required minimum distributions.
o Direct custodian-to-custodian transfers
from another traditional individual o Although we accept regular IRA
retirement arrangement. contributions (limited to $3,000 for
calendar year 2002) under the Rollover
o Regular IRA contributions. IRA contracts, we intend that this
contract be used primarily for rollover
o For the calendar year 2002 and later, addi- and direct transfer contributions.
tional "catch-up" contributions.
o Additional catch-up contributions
totalling up to $500 can be made for
calendar year 2002 where the owner is at
least age 50 but under age 70-1/2 at any
time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct
IRA transfer con-tributions after age 86.
o Conversion rollovers after age
o Conversion rollovers from a traditional 70-1/2 must be net of required
IRA. minimum distributions for the
traditional IRA you are rolling
o Direct transfers from another Roth IRA. over.
o Regular Roth IRA contributions. o You cannot roll over funds from a
traditional IRA if your adjusted
o For the calendar year 2002 and later, addi- gross income is $100,000 or more.
tional catch-up contributions.
o Although we accept regular Roth IRA
contributions (limited to $3,000
for the calendar year 2002) under
the Roth IRA contracts, we intend
that this contract be used primarily
for rollover and direct transfer
contributions.
o Additional catch-up contributions
totalling up to $500 can be made for
the calendar year 2002 where the
owner is at least age 50 at any time
during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
Available
Contract for annuitant Limitations on
type issue ages Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o Direct transfers of pre-tax o No additional rollover or direct
funds from another contract or transfer contributions after age 86.
arrangement under Section
403(b) of the Internal Revenue o Rollover or direct transfer
Code, complying with IRS Revenue Ruling contributions after age 70-1/2
90-24. must be net of any required
mini- mum distributions.
o Eligible rollover distributions of pre-tax
funds from other 403(b) plans, qualified o Employer-remitted contributions are not
plans, governmental EDC plans and tradi- permitted.
tional IRAs.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Select(SM)contracts with the
same annuitant would then total more than $1,500,000. We reserve the right to
limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be owners/joint owners.
Non-natural owners include but are not limited to trusts, partnerships,
corporations and foundations.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant. This
option may not be available under your contract.
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the guaranteed
interest option and the fixed maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options, the guaranteed
interest option and the fixed maturity options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
Portfolios of the Trusts
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Select(SM) contract. These portfolios may even have the same manager(s) and/or
a similar name. However, there are numerous factors that can contribute to
differences in performance between two investments, particularly over short
periods of time. Such factors include the timing of stock purchases and sales;
differences in fund cash flows; and specific strategies employed by the
portfolio manager.
- ------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high BlackRock Advisors, Inc.
current income and capital Pacific Investment Management Company LLC
appreciation consistent with a
prudent level of risk
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Bank of Ireland Asset Management (U.S.)
OppenheimerFunds, Inc.
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital Management L.P.
Institutional Capital Corporation
MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management L.P.
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management, LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth Alliance Capital Management L.P.
of capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth Alliance Capital Management L.P.
of capital and increased income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total Alliance Capital Management L.P.
return consistent with the
Adviser's determination of
reasonable risk
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current Alliance Capital Management L.P.
Government Securities* income consistent with relative
stability of principal
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P.
(including through its Bernstein Investment
Research and Management Unit)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of Alliance Capital Management L.P.
current income, preserve its
assets and maintain liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current Alliance Capital Management L.P.
income consistent with moderate
risk of capital
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of Alliance Capital Management L.P.
capital. Current income is
incidental to the Portfolio's
objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return Alliance Capital Management L.P.
through both appreciation of Capital Guardian Trust Company
capital and current income Jennison Associates, LLC
Prudential Investments LLC
Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment Research and
Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before Alliance Capital Management L.P.
expenses that approximates the
total return performance of the
S&P 500 Index, including
reinvestment of dividends, at a
risk level consistent with that of
the S&P 500 Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management Company,
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total Alliance Capital Management L.P.
return through a combination of
current income and capital
appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as Deutsche Asset Management Inc.
possible (before deduction of Portfolio
expenses) the total return of the MSCI
EAFE Index
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total J.P. Morgan Investment Management, Inc.
return consistent with moderate
risk of capital and maintenance of
liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of Marsico Capital Management, LLC
capital
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and Mercury Advisors
secondarily, income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital MFS Investment Management
Companies growth
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with a MFS Investment Management
secondary objective to seek reasonable
current income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of MFS Investment Management
capital and future income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is Putnam Investment Management, LLC
Value a secondary objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital Putnam Investment Management, LLC
and any increased income that
results from this growth
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as Deutsche Asset Management Inc.
possible (before deduction of
Portfolio expenses) the total
return of the Russell 2000 Index
- ------------------------------------------------------------------------------------------------------------------------------------
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays interest
at guaranteed rates. We discuss our general account under "More information"
later in this Prospectus.
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period.
Therefore, different interest rates may apply to different amounts in the
guaranteed interest option.
We credit interest daily to amounts in the guaranteed interest option. There
are three levels of interest in effect at the same time in the guaranteed
interest option:
(1) the minimum interest rate guaranteed over the life of the contract,
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
We set current interest rates periodically, according to our procedures that we
have in effect at the time. We reserve the right to change these procedures.
All interest rates are effective annual rates, but before deduction of annual
administrative charges.
The minimum yearly guaranteed interest rate is 3% for 2002. The yearly rates we
set will never be less than the minimum guaranteed interest rate of 3% for the
life of the contract. Current interest rates will never be less than the yearly
guaranteed interest rate.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options, however, you may not have more than 12 different maturities
running during any contract year. These amounts become part of a non-unitized
separate account. They will accumulate interest at the "rate to maturity" for
each fixed maturity option. The total amount you allocate to and accumulate in
each fixed maturity option is called the "fixed maturity amount." The fixed
maturity options are not available in all states. Check with your financial
professional to see if fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We offer fixed maturity options with
maturity dates ranging from one to ten years. Not all of these fixed maturity
options will be available for annuitant ages 76 and older. See "Allocating your
contributions" below.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied the rate to maturity is 3% or less.
Each new contribution is applied to a new fixed maturity option. When you apply
for an Accumulator(R) Select(SM) contract, a 60-day rate lock-in will apply from
the date the application is signed. Any contributions received and designated
for a fixed maturity option during this period will receive the then current
maturity option rate or the rate that was in effect on the date that the
application was signed, whichever is greater. There is no rate lock available
for transfers from the variable investment options or the guaranteed interest
option into a fixed maturity option, from one fixed maturity option to another
or for subsequent contributions to the contract.
YOUR CHOICES AT THE MATURITY DATE. We will notify you between 15 and 45 days
before each of your fixed maturity options is scheduled to mature. At that
time, you may choose to have one of the following take place on the maturity
date, as long as none of the conditions listed in "Allocating your
contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option,
any of the variable investment options or the guaranteed interest option;
or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
shortest available maturity option beginning on that date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate in effect at that time for new fixed maturity
options, (adjusted to reflect a similar maturity date) and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it
Contract features and benefits 21
is possible that the market value adjustment could greatly reduce your value in
the fixed maturity options, particularly in the fixed maturity options with
later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix I at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options, guaranteed interest option and fixed maturity options.
Allocations must be in whole percentages and you may change your allocations at
any time. However, the total of your allocations must equal 100%. If the
annuitant is age 76 or older, you may allocate contributions to fixed maturity
options if their maturities are five years or less. Also, you may not allocate
amounts to fixed maturity options with maturity dates that are later than the
date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options and guaranteed interest option
however you choose.
For example, if your initial contribution is $25,000, and on February 15, 2002
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $14,507.17 to that fixed maturity option and the balance to your
choice of the variable investment options and guaranteed interest option. On
the maturity date your value in the fixed maturity option would be $25,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA or
Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options and guaranteed interest option,
or your other traditional IRA or TSA funds are sufficient to meet your required
minimum distributions. See "Tax information" later in this Prospectus and in
the SAI.
Please check with your financial professional if the principal assurance
allocation feature is available in your state. Also, you may not elect
principal assurance if the 12 month dollar cost averaging program is in effect.
DOLLAR COST AVERAGING
We offer three dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually transfer amounts from
the EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the other
variable investment options you select. This will cause you to purchase more
units if the unit value is low and fewer units if the unit value is high.
Therefore, you may get a lower average cost per unit over the long term. These
plans of investing, however, do not guarantee that you will earn a profit or be
protected against losses. You may not make transfers to the fixed maturity
options.
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Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
12 MONTH DOLLAR COST AVERAGING PROGRAM. Subject to state availability, you may
dollar cost average from the EQ/Alliance Money Market option into any of the
other variable investment options. You may not make transfers to the guaranteed
interest option. You may elect to participate in the 12 month dollar cost
averaging program at any time subject to the age limitation on contributions
described in Section 1 of this prospectus. Contributions into the account for
12 month dollar cost averaging may not be transfers from other investment
options. You must allocate your entire initial contribution into the
EQ/Alliance Money Market option if you are selecting the 12 month dollar cost
averaging program at application to purchase an Accumulator(R) Select(SM)
contract; thereafter initial allocations to any new 12 month dollar cost
averaging program time period must be at least $2,000 and any subsequent
contribution to that same time period must be at least $250. You may only have
one time period in effect at any time. We will transfer your value in the
EQ/Alliance Money Market option into the other variable investment options that
you select over the next 12 months or such other period we may offer. Once the
time period then in effect has run, you may then select to participate in the
dollar cost averaging program for an additional time period. At that time, you
may also select a different allocation for transfers to the variable investment
options, or, if you wish, we will continue to use the selection that you have
previously made.
Currently, the transfer date will be the same day of the month as the contract
date, but not later than the 28th. For a 12 month dollar cost averaging program
selected after application, the first transfer date and each subsequent
transfer date for the time period selected will be one month from the date the
first contribution is made into the 12 month dollar cost averaging program, but
not later than the 28th of the month. All amounts will be transferred out by
the end of the time period then in effect. Under this program we will not
deduct the mortality and expense risks, administrative, and distribution
charges from assets in the EQ/Alliance Money Market option.
You may not transfer amounts to the EQ/Alliance Money Market option established
for this program that are not part of the 12 month
22 Contract features and benefits
dollar cost averaging program. The only amounts that should be transferred from
the EQ/Alliance Money Market option are your regularly scheduled transfers to
the other variable investment options. If you request to transfer or withdraw
any other amounts from the EQ/Alliance Money Market option, we will transfer
all of the value that you have remaining in the account for 12 month dollar
cost averaging to the investment options according to the allocation
percentages we have on file for you. You may ask us to cancel your
participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options and the guaranteed interest
option. You can select to have transfers made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the transfers
until all amounts in the EQ/Alliance Money Market option have been transferred
out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
FIXED-DOLLAR OPTION. Under this option you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the variable
investment options of your choice on a monthly basis. You can specify the
number of monthly transfers or instruct us to continue to make monthly
transfers until all available amounts in the guaranteed interest option have
been transferred out.
In order to elect the fixed-dollar option, you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at our
processing office. Transfers may be made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
contract date but not later than the 28th day of the month. The minimum
transfer amount is $50. The fixed-dollar option is subject to the guaranteed
interest option transfer limitations described under "Transferring your account
value" in "Transferring your money among investment options" later in this
Prospectus. While the program is running, any transfer that exceeds those
limitations will cause the program to end for that contract year. You will be
notified. You must send in a request form to resume the program in the next or
subsequent contract years.
If, on any transfer date your value in the guaranteed interest option is equal
to or less than the amount you have elected to have transferred, the entire
amount will be transferred, and the program will end. You may change the
transfer amount once each contract year or cancel this program at any time.
----------------------------------
You may not elect general dollar cost averaging, 12 month dollar cost averaging
or the fixed-dollar option if you are participating in the rebalancing program.
See "Transferring your money among investment options" later in this
Prospectus.
YOUR BENEFIT BASE
A benefit base is used to calculate the guaranteed minimum income benefit and
any death benefit as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Living Benefit option" and
"Guaranteed minimum death benefit" below.
STANDARD DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money" later in this Prospectus).
6% ROLL UP TO AGE 85 ENHANCED DEATH BENEFIT. Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money" later in this Prospectus).
The effective annual interest rate credited to this benefit base is:
o 6% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/Alliance Money Market) and monies
allocated to the 12 month dollar cost averaging program; and
o 3% with respect to the EQ/Alliance Intermediate Government Securities and
EQ/Alliance Money Market, the fixed maturity options, the guaranteed
interest option and the loan reserve account under Rollover TSA (if
applicable).
No interest is credited to the benefit base after the contract anniversary
following the annuitant's 85th birthday.
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT. Your benefit base is equal to
the greater of:
o your initial contribution to the contract (plus any additional
contributions),
or
o your highest account value on any contract anniversary up to the contract
anniversary following the annuitant's 85th birthday,
each less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money" later in this Prospectus).
Contract features and benefits 23
GREATER OF THE 6% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85 ENHANCED
DEATH BENEFIT AND THE GUARANTEED MINIMUM INCOME BENEFIT. Your benefit base is
equal to the greater of the benefit base computed for the 6% Roll up to age 85
or the Annual ratchet to age 85, as described immediately above, on each
contract anniversary.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our Living
Benefit option" and annuity payout options are discussed in "Accessing your
money" later in this Prospectus. The guaranteed annuity purchase factors are
those factors specified in your contract. The current annuity purchase factors
are those factors that are in effect at any given time. Annuity purchase
factors are based on interest rates, mortality tables, frequency of payments,
the form of annuity benefit, and the annuitant's (and any joint annuitant's)
age and sex in certain instances.
OUR LIVING BENEFIT OPTION
The Living Benefit option offers you a guaranteed minimum income benefit. The
Living Benefit is available if the annuitant is age 20 through 75 at the time
the contract is issued. There is an additional charge for the Living Benefit
which is described under "Living Benefit charge" in "Charges and expenses"
later in this Prospectus. Living Benefit is currently not available in some
states. Please ask your financial professional if Living Benefit is available
in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability. You choose which of these payout options you want and
whether you want the option to be paid on a single or joint life basis at the
time you exercise your guaranteed minimum income benefit. The maximum period
certain available under the Income Manager payout option is 10 years. This
period may be shorter, depending on the annuitant's age when you exercise your
guaranteed minimum income benefit and the type of contract you own. We may also
make other forms of payout options available. For a description of payout
options, see "Your annuity payout options" in "Accessing your money" later in
this Prospectus.
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The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your guaranteed minimum income benefit base less, outstanding loan
plus accrued interest (applies to Rollover TSA only) at guaranteed annuity
purchase factors, or (ii) the income provided by applying your actual account
value at our then current annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. You will
begin receiving payments one payment period after the annuity payout option is
issued. Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death. There is no continuation of benefits
following the annuitant's (or joint annuitant's, if applicable) death.
Before you elect Living Benefit, you should consider the fact that the
guaranteed minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under Living Benefit are more
conservative than the guaranteed annuity purchase factors we use for the Income
Manager payout annuity option. This means that, assuming the same amount is
applied to purchase the benefit and that we use guaranteed annuity purchase
factors to compute the benefit, each periodic payment under the Living Benefit
Income Manager will be smaller than each periodic payment under the Income
Manager payout annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 6% Roll up to
age 85 benefit base, the table below illustrates the guaranteed minimum income
benefit amounts per $100,000 of initial contribution, for a male annuitant age
60 (at issue) on the contract date anniversaries indicated, who has elected the
life annuity fixed payout option, using the guaranteed annuity purchase factors
as of the date of this prospectus, assuming no additional contributions,
withdrawals or loans under Rollover TSA contracts, and assuming there were no
allocations to the EQ/Alliance Intermediate Government Securities, EQ/Alliance
Money Market, the guaranteed interest option, the fixed maturity options or the
loan reserve account.
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Guaranteed minimum income
Contract date benefit -- annual income pay-
anniversary at exercise able for life
- ------------------------------------------------------------------
10 $11,891
15 $18,597
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date
anniversary that you are eligible to exercise the guaranteed minimum income
benefit, we will send you an eligibility notice illustrating how much income
could be provided as of the contract date anniversary. You may notify us within
30 days following the contract date anniversary if you want to exercise the
guaranteed minimum income benefit. You must return your contract to us in order
to exercise this benefit. The amount of income you actually receive will be
determined when we receive your request to exercise the benefit. You will begin
receiving payments one payment period after the annuity payout contract is
issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed
24 Contract features and benefits
minimum income benefit within 30 days following each contract date
anniversary beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
after the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 85th
birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only
time you may exercise the guaranteed minimum income benefit is within
30 days following the first contract date anniversary that it becomes
available;
(iii) if the annuitant was older than age 60 at the time an IRA or Rollover
TSA contract was issued, the Living Benefit may not be an appropriate
feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can
be exercised; and
(iv) for Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in
such contract to a Rollover IRA contract. You will be the owner of the
Rollover IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
Your contract provides a death benefit. If you do not elect one of the enhanced
death benefits described below, the death benefit is equal to your account
value (without adjustment for any otherwise applicable negative market value
adjustment) as of the date we receive satisfactory proof of death, any required
instructions for the method of payment, information and forms necessary to
effect payment OR the standard death benefit, whichever provides the highest
amount. The standard death benefit is equal to your total contributions (less
any withdrawals and any withdrawal charges, and any taxes that apply).
If you elect one of the enhanced death benefits, the death benefit is equal to
your account value as of the date we receive satisfactory proof of the
annuitant's death, any required instructions for the method of payment,
information and forms necessary to effect payment OR your elected enhanced
death benefit on the date of the annuitant's death, less any subsequent
withdrawals, withdrawal charges and taxes that apply, whichever provides the
highest amount.
OPTIONAL ENHANCED DEATH BENEFITS APPLICABLE FOR ANNUITANT AGES 0 THROUGH 84 AT
ISSUE OF NQ CONTRACTS; AND 20 THROUGH 84 AT ISSUE OF ROLLOVER IRA, ROTH
CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
Subject to state availability, you may elect one of the following enhanced
death benefits:
6% ROLL UP TO AGE 85.
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 6% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85.
Each enhanced death benefit is equal to its corresponding benefit base
described earlier in "Your benefit base." Once you have made your enhanced
death benefit election, you may not change it.
The standard death benefit is the only death benefit available for annuitants
age 85 at issue of NQ, Rollover IRA, Roth Conversion IRA and Rollover TSA
contracts.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix II at the end of this Prospectus for an example of how we
calculate an enhanced death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus for the
potential tax consequences of electing to purchase the Protection Plus feature
in an NQ, IRA or Rollover TSA contract.
If the annuitant is 70 or younger when we issue your Contract (or if the
successor owner/annuitant is 70 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 40% of such death benefit less total net contributions.
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including surrender charges and loans). Reduction on a pro rata basis means
that we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
Contract features and benefits 25
If the annuitant is age 71 through 79 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 and 79 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable death benefit
Increased by:
o 25% of such death benefit (as described above) less total net
contributions.
The value of the Protection Plus death benefit is frozen on the first contract
date anniversary after the annuitant turns age 80, except that the benefit will
be reduced for withdrawals on a pro rata basis. Protection Plus must be elected
when the contract is first issued: neither the owner nor the successor
owner/annuitant can add it subsequently. Ask your financial professional if
this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), (ii) any guaranteed interest in the
guaranteed interest option, and (iii) any positive or negative market value
adjustments in the fixed maturity options through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i), (ii) or (iii) above). For any IRA contract
returned to us within seven days after you receive it, we are required to
refund the full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your financial professional, can provide you with the
cancellation instructions.
26 Contract features and benefits
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) the guaranteed interest option; (iii) market adjusted
amounts in the fixed maturity options; and (iv) value you have in the loan
reserve account (applicable to Rollover TSA contracts only). These amounts are
subject to certain fees and charges discussed under "Charges and expenses"
later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge; and
(ii) the amount of any outstanding loan plus accrued interest (applicable to
Rollover TSA contracts only). Please see "Surrendering your contract to receive
its cash value" in "Accessing your money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal;
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the enhanced death benefit, Living Benefit and/or
the Protection Plus benefit charges the number of units credited to your
contract will be reduced. Your units are also reduced when we deduct the annual
administrative charge. A description of how unit values are calculated is found
in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED
INTEREST OPTION
Your value in the guaranteed interest option at any time will equal: your
contributions and transfers to that option, plus interest, minus withdrawals
out of the option, and charges we deduct.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
Determining your contract's value 27
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that has a rate to maturity
of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the date annuity payments are to
begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date, the transfer may cause a market value adjustment.
The maximum amount that may be transferred from the guaranteed interest option
to any investment option (including amounts transferred pursuant to the
fixed-dollar option dollar cost averaging program described earlier in this
Prospectus) in any contract year is the greatest of:
(a) 25% of the amount you have in the guaranteed interest option on the last
day of the prior contract year; or
(b) the total of all amounts transferred at your request from the guaranteed
interest option to any of the Investment options in the prior contract
year; or
(c) 25% of amounts transferred or allocated to the guaranteed interest option
during the current contract year.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Select(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis).
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
- --------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing. There is no charge for the rebalancing
feature.
28 Transferring your money among investment options
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging, 12 month dollar cost averaging or the
fixed-dollar option dollar cost averaging program. Rebalancing is not available
for amounts you have allocated to the guaranteed interest option or the fixed
maturity options.
Transferring your money among investment options 29
4. Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
- --------------------------------------------------------------------------
Method of withdrawal
- --------------------------------------------------------------------------
Lifetime
required
Substantially minimum
Contract Lump sum Systematic equal distribution
- --------------------------------------------------------------------------
NQ Yes Yes No No
Rollover IRA Yes Yes Yes Yes
Roth
Conversion IRA Yes Yes Yes No
Rollover TSA* Yes Yes No Yes
- --------------------------------------------------------------------------
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value, we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Under Rollover TSA contracts, if a loan is outstanding, you may only take lump
sum withdrawals as long as the cash value remaining after any withdrawal equals
at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA and Rollover TSA contracts only -- See "Tax information" later in
this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum
30 Accessing your money
distribution withdrawal payments will be made annually. See the "Required
minimum distributions" section in "Tax information" later in this Prospectus
and in the SAI for your specific type of retirement arrangement.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA and Rollover TSA contracts, we will send a form outlining the
distribution options available in the year you reach age 70-1/2 (if you have not
begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options and the guaranteed
interest option. If there is insufficient value or no value in the variable
investment options, and the guaranteed interest option, any additional amount
of the withdrawal required or the total amount of the withdrawal will be
withdrawn from the fixed maturity options in order of the earliest maturity
date(s) first. A market value adjustment may apply to withdrawals from the
fixed maturity options. If those amounts are insufficient, we will deduct all
or a portion of the charge from amounts in the 12 month dollar cost averaging
program.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
Your applicable benefit base will be reduced on a dollar-for-dollar basis as
long as the sum of your withdrawals in a contract year is 6% or less of the
applicable benefit base on the most recent contract date anniversary. Any
portion of a withdrawal that causes the sum of your withdrawals in a contract
year to exceed 6% of the applicable benefit base on the most recent contract
date anniversary, and any subsequent withdrawals in that same contract year
will reduce your applicable benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 6% threshold
described above can have significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your death benefit was $40,000 before
the withdrawal, it would be reduced by $16,000 ($40,000 x .40) and your new
death benefit after the withdrawal would be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options and the guaranteed interest option. If these amounts are
insufficient, any additional amount of the loan will be subtracted from the
fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
Accessing your money 31
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw and, upon surrender, payment of the cash value. We may postpone such
payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the guaranteed interest
option and fixed maturity options (other than for death benefits) for up to six
months while you are living. We also may defer payments for a reasonable amount
of time (not to exceed 10 days) while we are waiting for a contribution check
to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Select(SM) offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under Living Benefit, your choice of payout options are those
that are available under Living Benefit (see "Our Living Benefit option"
earlier in this Prospectus).
- ------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
- ------------------------------------------------------------------------
Variable Immediate Annuity Life annuity
payout options (not available in New York)
Life annuity with period certain
- ------------------------------------------------------------------------
Income Manager payout options Life annuity with period certain
(available for annuitants age 83 Period certain annuity
or less at contract issue)
- ------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with a
period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
32 Accessing your money
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only).
For Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Select(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Select(SM). For the tax consequences of withdrawals, see "Tax
information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Select(SM) contract date.
Except with respect to the Income Manager annuity payout options, where
payments are made on the 15th day of each month, you can change the date your
annuity payments are to begin anytime before that date as long as you do not
choose a date later than the 28th day of any month. Also, that date may not be
later than the annuity maturity date described below.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 95th birthday. For
contracts issued in New York, the maturity date is the contract date that
follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- -------------------------------------
Maximum
Issue age annuitization age
- -------------------------------------
0-75 85
76 86
77 87
78-80 88
81-85 90
- -------------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
(subject to a market value adjustment) if an Income Manager payout option is
chosen.
Accessing your money 33
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary -- an annual administrative charge, if
applicable.
o On each contract date anniversary -- a charge if you elect a death benefit
(other than the Standard death benefit).
o On each contract date anniversary -- a charge for the Living Benefit, if
you elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to
approximate certain taxes that may be imposed on us, such as premium taxes
in your state. An annuity administrative fee may also apply.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the Standard
guaranteed minimum death benefit. The daily charge is equivalent to an annual
rate of 1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.35% of the net assets in each
variable investment option.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on each contract
date anniversary. We deduct the charge if your account value on the last
business day of the contract year is less than $50,000. If your account value
on such date is $50,000 or more, we do not deduct the charge. During the first
two contract years, the charge is equal to $30 or, if less, 2% of your account
value. The charge is $30 for contract years three and later.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option (if permitted in your state) on a pro rata
basis. If those amounts are insufficient, we will deduct all or a portion of
the charge from the fixed maturity options in order of the earliest maturity
date(s) first. A market value adjustment may apply. If those amounts are
insufficient, we will deduct all or a portion of the charge from amounts in the
12 month dollar cost averaging program. If you surrender your contract during
the contract year, we will deduct a pro rata portion of the charge.
GUARANTEED MINIMUM DEATH BENEFIT CHARGE
Annual ratchet to age 85. If you elect the Annual ratchet to age 85 enhanced
death benefit, we deduct a charge annually from your account value on each
contract date anniversary. The charge is equal to 0.20% of the Annual ratchet
to age 85 benefit base.
6% Roll up to age 85. If you elect the 6% Roll up to age 85 enhanced death
benefit, we deduct a charge annually from your account value on each contract
date anniversary. The charge is equal to 0.35% of the 6% Roll up to age 85
benefit base.
Greater of 6% Roll up to age 85 or Annual ratchet to age 85. If you elect this
enhanced death benefit, we deduct a charge annually from your account value on
each contract date anniversary. The charge is equal to 0.45% of the greater of
the 6% Roll up to age 85 or the Annual ratchet to age 85 benefit base.
There is no additional charge for the Standard death benefit.
LIVING BENEFIT CHARGE
If you elect the Living Benefit, we deduct a charge annually from your account
value on each contract date anniversary until such time as you
34 Charges and expenses
exercise the guaranteed minimum income benefit, elect another annuity payout
option, or the contract date anniversary after the annuitant reaches 85,
whichever occurs first. The charge is equal to 0.45% of the applicable benefit
base in effect on the contract date anniversary.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options in order of the earliest maturity date(s) first. A market
value adjustment may apply. If those amounts are insufficient, we will deduct
all or a portion of the charge from the account for 12 month dollar cost
averaging.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.35% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment options and
the guaranteed interest option on a pro rata basis. If those amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options in the order of the earliest maturity date(s) first. A market
value adjustment may apply. If those amounts are insufficient, we will deduct
all or a portion of the charge from the account for 12 month dollar cost
averaging.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (the rate is
1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the mortality and
expense risks charge or change the minimum initial contribution requirements.
We also may change the guaranteed minimum income benefit or the guaranteed
minimum death benefit, or offer variable investment options that invest in
shares of either Trust that are not subject to the 12b-1 fee. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase
under such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
Charges and expenses 35
6. Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
applicable guaranteed minimum death benefit. We determine the amount of the
death benefit (other than the applicable guaranteed minimum death benefit) and
any amount applicable under the Protection Plus feature, as of the date we
receive satisfactory proof of the annuitant's death, any required instructions
for the method of payment, information and forms necessary to effect payment.
The amount of the applicable guaranteed minimum death benefit will be such
guaranteed minimum death benefit as of the date of the annuitant's death,
adjusted for any subsequent withdrawals. The death benefit will be less a
deduction for any outstanding loan plus accrued interest on the date that the
death benefit payment is made (applies to Rollover TSA only).
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive this death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will
pay any cash value five years after your death (or the death of the first
owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor owner/annuitant
feature, we will increase the account value to equal your elected guaranteed
minimum death benefit as of the date of your
36 Payment of death benefit
death if such death benefit is greater than such account value, plus any amount
applicable under the Protection Plus feature and adjusted for any subsequent
withdrawals. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. In determining whether your applicable guaranteed minimum death
benefit option will continue to grow, we will use your surviving spouse's age
(as of the date we receive satisfactory proof of your death, any required
instructions and the information and forms necessary to effect the successor
owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. We require this election to be
made within nine months following the date we receive proof of your death and
before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the applicable guaranteed
minimum death benefit as of the date of your death, if such death benefit is
greater than such account value, plus any amount applicable under the
Protection Plus feature, and adjusted for any subsequent withdrawals. The
beneficiary continuation option is available if we have received regulatory
clearance in your state. Where an IRA contract is owned in a custodial
individual retirement account, the custodian may reinvest the death benefit in
an Accumulator(R) Select(SM) individual retirement annuity contract, using the
account beneficiary as the annuitant. Please contact our processing office for
further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in
effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected
by the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
Payment of death benefit 37
7. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Select(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans.
In addition to increasing the amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b) Arrangements
("TSAs"), respectively: an IRA or 403(b) annuity contract such as this one, or
an IRA or 403(b)(7) custodial or other qualified account. How these arrangements
work, including special rules applicable to each, are described in the specific
sections for each type of arrangement, below. More information on IRAs and TSAs
is provided in the SAI. You should be aware that the funding vehicle for a
qualified arrangement does not provide any tax deferral benefit beyond that
already provided by the Code for all permissible funding vehicles. Before
choosing an annuity contract, therefore, you should consider the annuity's
features and benefits, such as Accumulator(R) Select(SM)'s 12 Month Dollar Cost
Averaging, choice of death benefits, selection of investment funds, guaranteed
interest option, fixed maturity options and its choices of pay-out options, as
well as the features and benefits of other permissible funding vehicles and the
relative costs of annuities and other arrangements. You should be aware that
cost may vary depending on the features and benefits made available and the
charges and expenses of the investment options or funds that you elect.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse); and
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multi-
38 Tax information
plying the result by the amount of the payment. For variable annuity payments,
your tax-free portion of each payment is your investment in the contract
divided by the number of expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which is part of the contract and which should have no adverse tax effect, it
is possible that the IRS could take a contrary position or assert that the
Protection Plus rider is not part of the contract. In such a case the charges
for the Protection Plus rider could be treated for federal income tax purposes
as a partial withdrawal from the contract. If this were so, such a deemed
withdrawal could be taxable, and for contract owners under age 59-1/2, also
subject to a tax penalty. Were the IRS to take this position, Equitable would
take all reasonable steps to attempt to avoid this result, which would include
amending the contract (with appropriate notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Select(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Select(SM) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER
YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
currently included in your gross income for federal income tax purposes.
Incidents of investment control could include among other items, the number of
investment options available under a contract and/or the frequency of transfers
available under the contract. In connection with the issuance of regulations
concerning investment diversification in 1986, the Treasury Department
announced that the diversification regulations did not provide guidance on
investor control but that guidance would be issued in the form of regulations
or rulings. As of the date of this prospectus, no such guidance has been
issued. It is not known whether such guidelines, if in fact issued, would have
retroactive adverse effect on existing contracts. We can not provide assurance
as to the terms or scope of any future guidance nor any assurance that such
guidance would not be imposed on a retroactive basis to contracts issued under
this prospectus. We reserve the right to modify the contract as necessary to
attempt to prevent you from being considered the owner of the assets of the
separate account for tax purposes.
Tax information 39
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets funding the account
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account. In an
individual retirement annuity, an insurance company issues an annuity contract
that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Select(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Select(SM) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) SELECT(SM)
CONTRACT AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE PARAGRAPH
ABOVE DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We have filed a
request with the IRS that the contract with the Protection Plus feature
qualifies as to form for use as a traditional IRA and Roth IRA, respectively.
THERE IS NO ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS
THE IRS QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may not invest in
life insurance contracts. Although we view the optional Protection Plus benefit
as an investment protection feature which should have no adverse tax effect and
not as life insurance, it is possible that the IRS could take a contrary
position regarding tax qualification or assert that the Protection Plus rider is
not a permissible part of an individual retirement annuity contract. We further
view the optional Protection Plus benefit as part of the contract. There is also
a risk that the IRS may take the position that the optional Protection Plus
benefit is not part of the annuity contract. In such a case, the charges for the
Protection Plus rider could be treated for federal income tax purposes as a
partial withdrawal from the contract. If this were so, such a deemed withdrawal
could be taxable, and for contract owners under age 59-1/2, also subject to a
tax penalty. Were the IRS to take any adverse position, Equitable would take all
reasonable steps to attempt to avoid any adverse result, which would include
amending the contract (with appropriate notice to you). YOU SHOULD DISCUSS WITH
YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER PURCHASING AN ACCUMULATOR(R)
SELECT(SM) IRA OR ACCUMULATOR(R) SELECT(SM) ROTH IRA WITH THE OPTIONAL
PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
40 Tax information
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer related to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach age 70-1/2.
Regular contributions for any year to a Roth IRA can be made at any time during
your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA, surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time home buyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally there are two types of funding vehicles available for 403(b)
arrangements -- an annuity contract under Section 403(b)(1) of the Code or a
custodial account which invests only in mutual funds and which is treated as an
annuity contract under Section 403(b)(7) of which the Code. Both types of
403(b) arrangements qualify for tax deferral.
PROTECTION PLUS FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR ROLLOVER TSA CONTRACTS, SUBJECT TO
STATE AND CONTRACT AVAILABILITY. THERE IS NO ASSURANCE THAT THE CONTRACT WITH
THE PROTECTION PLUS FEATURE MEETS THE QUALIFICATION REQUIREMENTS FOR TSAS.
There is a limit to the amount of life insurance benefits that TSAs may offer.
Although we view the optional Protection Plus benefit as an investment
protection feature which should have no adverse tax effect and not as a life
insurance benefit, it is possible that the IRS could take a contrary position
regarding tax qualification or assert that the Protection Plus rider is not a
permissible part of a TSA contract. If the IRS were to take the position that
the optional Protection Plus benefit is not part of the contract, in such a
case, the charges for the Protection Plus rider could
Tax information 41
be treated for federal income tax purposes as a partial withdrawal from the
contract. If this were so, such a deemed withdrawal could affect the tax
qualification of the TSA and could be taxable. Were the IRS to take any adverse
position, Equitable would take all reasonable steps to attempt to avoid any
adverse result, which would include amending the contract (with appropriate
notice to you). YOU SHOULD DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD
CONSIDER PURCHASING AN ACCUMULATOR(R) SELECT(SM) ROLLOVER TSA CONTRACT WITH THE
OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Select(SM) Rollover TSA contract:
o a rollover from another eligible retirement plan; or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
Contributions to TSAs are discussed in greater detail in the SAI.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another, because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) Select(SM) contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Select(SM) Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not need employer authorization.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Select(SM) Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to withdrawal restrictions may depend on the source
of the funds used to establish the Accumulator(R) Select(SM) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
42 Tax information
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation from service, if later. These rules are discussed in greater
detail in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA to the extent it is reasonable for us to believe that a
distribution is includable in your gross income. This may result in tax
being withheld even though the Roth IRA distribution is ultimately not
taxable. You can elect out of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
Tax information 43
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
44 Tax information
8. More information
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ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. The results of Separate Account's operations are accounted
for without regard to Equitable Life's other operations.
The Separate Account is registered under the Investment Company Act of 1940 and
is classified by that act as a "unit investment trust." The SEC, however, does
not manage or supervise Equitable Life or the Separate Account.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in class IB shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from the Separate Account or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate the Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against the Separate Account or
a variable investment option directly);
(5) to deregister the Separate Account under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Account; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999 EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. AXA Premier
VIP Trust commenced operations on December 31, 2001.
The Trusts do not impose sales charges or "loads" for buying and selling its
shares. All dividends and other distributions on Trust shares are reinvested in
full. The Board of Trustees of the Trusts may establish additional portfolios
or eliminate existing portfolios at any time. More detailed information about
each Trust, its portfolio investment objectives, policies, restrictions, risks,
expenses, its Rule 12b-1 Plan relating to Class IB shares, and other aspects of
its operations, appears in the prospectuses for each Trust which are attached
at the end of this prospectus, or in their respective SAIs which are available
upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table below are illustrative
only and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your financial professional.
For example the rates to maturity for new allocations as of February 15, 2002
and the related price per $100 of maturity value were as shown below:
- ----------------------------------------------------------------------
Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100 of
maturity year February 15, 2002 maturity value
- ----------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
2009 5.08% $ 70.67
2010 5.29% $ 66.19
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More information 45
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Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100 of
maturity year February 15, 2002 maturity value
- -----------------------------------------------------------------------
2011 5.47% $ 61.90
2012 5.59% $ 58.03
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date by adjusting rates on new fixed maturity options
established on that date to reflect a similar maturity date as the
fixed maturity option from which the withdrawal is being made (unless
the withdrawal is being made on an anniversary of the original
contribution to the fixed maturity option, in which case the amount
will be based on the then current rate to maturity).
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. See Appendix I at the end of
this Prospectus for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We expect the rates to maturity for the fixed maturity options to be influenced
by, but not necessarily correspond to, among other things, the yields that we
can expect to realize on the separate account's investments from time to time.
Our current plans are to invest in fixed-income obligations, including
corporate bonds, mortgage-backed and asset-backed securities, and government
and agency issues having durations in the aggregate consistent with those of
the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the guaranteed interest option and fixed maturity
options, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
46 More information
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits" earlier in
this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form. Until we receive the signed application or the signed
Acknowledgement of Receipt form, your ability to perform financial transactions
may be limited.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT
EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to the guaranteed interest option will receive the
crediting rate in effect on that business day for the specified time
period.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day
(unless a rate lock-in is applicable).
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
o Transfers to the guaranteed interest option will receive the crediting rate
in effect on that business day for the specified time period.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in each prospectus for the Trusts or requiring
a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We
More information 47
will also vote any shares that we are entitled to vote directly because of
amounts we have in a portfolio in the same proportions that contract owners
vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Account require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001 in this prospectus by
reference to the 2001 Annual Report on Form 10-K are incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI is
available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA or
Rollover TSA contract except by surrender to us. If your individual retirement
annuity contract is held in your custodial individual retirement account, you
may only assign or transfer ownership of such an IRA contract to yourself.
Loans are not available and you cannot assign Rollover IRA, Roth Conversion IRA
or Rollover TSA contracts as security for a loan or other obligation. If the
employer that provided the funds does not restrict them, loans are available
under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA or Rollover TSA contract to another similar arrangement under
federal income tax rules. In the case of such a transfer which involves a
surrender of your contract, we will impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC ("AXA Advisors") and
AXA Distributors, LLC ("AXA Distributors"). Both AXA Advisors and AXA
Distributors serve as principal underwriters of Separate Account No. 49. The
offering of the contracts is intended to be continuous.
AXA Advisors (the successor to EQ Financial Consultants, Inc.), an affiliate of
Equitable Life, and AXA Distributors, an indirect wholly owned subsidiary of
Equitable Life, are registered with the SEC as broker dealers and are members
of the National Association of Securities Dealers, Inc. Their principal
business address is 1290 Avenue of the Americas, New York, NY 10104. Both
broker dealers also act as distributors for other Equitable Life annuity
products.
AXA Distributors is a successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. ("EDI"). Like AXA Distributors, EDI
was owned by Equitable Holdings, LLC.
The contracts are sold by financial professionals of AXA Advisors and its
affiliates and by financial professionals of AXA Distributors, as well as by
affiliated and unaffiliated broker dealers who have entered into selling
agreements with AXA Distributors.
48 More information
We pay broker-dealer sales compensation that will generally not exceed an
amount equal to 2.0% annually of the account value on a contract date
anniversary. AXA Distributors may also receive compensation and reimbursement
for its marketing services under the terms of its distribution agreement with
Equitable Life. Broker-dealers receiving sales compensation will generally pay
a portion of it to their financial professionals as commissions related to
sales of the contracts.
More information 49
9. Investment performance
- --------------------------------------------------------------------------------
The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the highest optional enhanced death benefit charge, the optional Living Benefit
charge, the charge for Protection Plus and the annual administrative charge,
but does not reflect the charges designed to approximate certain taxes imposed
on us, such as premium taxes in your state or any applicable annuity
administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts will be offered
for the first time in 2002.
For the EQ/"Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. The results shown for the EQ/Alliance Money
Market and EQ/Alliance Common Stock options for periods before March 22, 1985
reflect the results of the variable investment options that preceded them. The
"Since portfolio inception" figures for these options are based on the date of
inception of the preceding variable investment options. We have adjusted these
results to reflect the maximum investment advisory fee payable for the
portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
50 Investment performance
TABLE
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- -------------------------------------------------------------------------------
EQ/Aggressive Stock (26.45)% (5.85)% ( 2.53)%
EQ/Alliance Common Stock (12.28)% 6.73% 10.30%
EQ/Alliance Global (21.64)% 1.02% 3.01%
EQ/Alliance Growth Investors (14.12)% 4.38% 5.94%
EQ/Alliance Money Market 1.80% 2.01% 2.28%
EQ/Alliance Premier Growth (25.26)% -- (13.17)%
EQ/Alliance Small Cap Growth (14.73)% -- 6.37%
EQ/Alliance Technology (25.73)% -- (35.49)%
EQ/Bernstein Diversified Value 1.33% -- ( 1.69)%
EQ/Capital Guardian International (22.25)% -- ( 1.01)%
EQ/Capital Guardian Research ( 3.70)% -- 1.30%
EQ/Capital Guardian U.S. Equity ( 3.69)% -- ( 0.76)%
EQ/Emerging Markets Equity ( 6.79)% -- ( 7.83)%
EQ/Equity 500 Index (13.66)% 6.97% 10.22%
EQ/Evergreen Omega (18.44)% -- ( 9.43)%
EQ/FI Mid Cap (14.90)% -- (11.69)%
EQ/FI Small/Mid Cap Value 2.21% -- 3.24%
EQ/High Yield ( 1.03)% (3.08)% 0.34%
EQ/International Equity Index (26.75)% -- ( 4.19)%
EQ/J.P. Morgan Core Bond 6.10% -- ( 1.04)%
EQ/Janus Large Cap Growth (24.29)% -- (29.20)%
EQ/Lazard Small Cap Value 15.72% -- ( 1.04)%
EQ/Mercury Basic Value Equity 3.73% -- 10.73%
EQ/MFS Emerging Growth Companies (35.19)% -- 6.47%
EQ/MFS Investors Trust (17.43)% -- ( 5.67)%
EQ/MFS Research (23.17)% -- 3.07%
EQ/Putnam Growth & Income Value ( 8.40)% -- 2.60%
EQ/Putnam International Equity (22.88)% -- ( 1.22)%
EQ/Putnam Voyager (25.75)% -- ( 1.22)%
EQ/Small Company Index 0.30% -- 1.06%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- ----------------------------------------------------------------------------------------
EQ/Aggressive Stock (10.77)% (5.85)% 0.94% 8.84%
EQ/Alliance Common Stock ( 4.05)% 6.73% 9.35% 10.58%
EQ/Alliance Global ( 6.19)% 1.02% 5.36% 5.50%
EQ/Alliance Growth Investors ( 1.71)% 4.38% 5.79% 8.66%
EQ/Alliance Money Market 2.08% 2.01% 1.32% 3.21%
EQ/Alliance Premier Growth -- -- -- (13.17)%
EQ/Alliance Small Cap Growth 5.24% -- -- 6.37%
EQ/Alliance Technology -- -- -- (35.49)%
EQ/Bernstein Diversified Value ( 1.10)% -- -- 3.05%
EQ/Capital Guardian International -- -- -- ( 6.44)%
EQ/Capital Guardian Research -- -- -- 1.29%
EQ/Capital Guardian U.S. Equity -- -- -- ( 0.77)%
EQ/Emerging Markets Equity 0.78% -- -- (12.49)%
EQ/Equity 500 Index ( 4.19)% 6.97% -- 10.28%
EQ/Evergreen Omega ( 9.42)% -- -- ( 9.42)%
EQ/FI Mid Cap -- -- -- (12.37)%
EQ/FI Small/Mid Cap Value 0.97% -- -- 0.83%
EQ/High Yield ( 6.57)% (3.08)% 3.72% 4.06%
EQ/International Equity Index (10.25)% -- -- ( 4.19)%
EQ/J.P. Morgan Core Bond 3.07% -- -- 3.76%
EQ/Janus Large Cap Growth -- -- -- (29.71)%
EQ/Lazard Small Cap Value 9.54% -- -- 4.22%
EQ/Mercury Basic Value Equity 9.14% -- -- 10.73%
EQ/MFS Emerging Growth Companies ( 4.96)% -- -- 6.47%
EQ/MFS Investors Trust ( 5.67)% -- -- ( 5.67)%
EQ/MFS Research ( 5.51)% -- -- 3.07%
EQ/Putnam Growth & Income Value ( 3.19)% -- -- 2.60%
EQ/Putnam International Equity 0.64% -- -- 5.16%
EQ/Putnam Voyager ( 9.25)% -- -- 4.05%
EQ/Small Company Index 3.27% -- -- 1.06%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October
16, 1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity,
EQ/MFS Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1,
1997); EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap
Value and EQ/Janus Large Cap Growth (September 5, 2000); EQ/Balanced (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Growth and Income, EQ/Alliance
International, EQ/Alliance Quality Bond, EQ/AXP New Dimensions and EQ/AXP
Strategy Aggressive (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Calvert Socially
Responsible (September 1, 1999); EQ/Alliance Technology (May 1, 2000);
EQ/AXP New
Investment performance 51
Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap
Growth (September 1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier
VIP Core Bond, AXA Premier VIP Health Care, AXA Premier VIP International
Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap
Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap Growth,
AXA Premier VIP Small/Mid Cap Value and AXA Premier VIP Technology (December
31, 2001). No performance information is provided for portfolios and/or
variable investment options with inception dates after December 31, 2000.
52 Investment performance
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's
Morningstar's Variable Annuity Sourcebook
Business Week
Forbes
Fortune
Institutional Investor
Money
Kiplinger's Personal Finance
Financial Planning
Investment Adviser
Investment Management Weekly
Money Management Letter
Investment Dealers Digest
National Underwriter
Pension & Investments
USA Today
Investor's Business Daily
The New York Times
The Wall Street Journal
The Los Angeles Times
The Chicago Tribune
- --------------------------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commissions or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks of
the Equitable Accumulator(R) Select(SM) performance relative to other variable
annuity products. The Lipper Survey contains two different universes, which
reflect different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses, the optional
enhanced death benefit charge, the optional Living Benefit charge, the optional
Protection Plus benefit charge, the annual administrative charge and any charge
designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. The yields and effective yields for the
EQ/Alliance Money Market option, when used for the 12 month dollar cost
averaging program, assume that no contract charges are deducted. For more
information, see "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option" in the SAI.
Investment performance 53
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2001, is considered to be a part of this prospectus because they are
incorporated by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
54 Incorporation of certain documents by reference
Appendix I: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,914 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- --------------------------------------------------------------------------------
Hypothetical assumed
rate to maturity on
-------------------
February 15, 2007
5.00% 9.00%
- --------------------------------------------------------------------------------
As of February 15, 2007 (before withdrawal)
(1) Market adjusted amount $144,082 $ 119,503
(2) Fixed maturity amount $131,104 $ 131,104
(3) Market value adjustment:
(1) - (2) $ 12,978 $ (11,601)
- --------------------------------------------------------------------------------
On February 15, 2007 (after withdrawal)
- --------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with
withdrawal:
(3) x [$50,000/(1)] $ 4,504 $ (4,854)
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,496 $ 54,854
(6) Fixed maturity amount: (2) - (5) $ 85,608 $ 76,250
(7) Maturity value $120,091 $ 106,965
(8) Market adjusted amount of (7) $ 94,082 $ 69,503
- --------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized. The market value is computed differently
if you withdraw amounts on a date other than the anniversary of the
establishment of the fixed maturity option.
Appendix I: Market value adjustment example A-1
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Appendix II: Enhanced death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the enhanced death benefit if elected.
The following illustrates the enhanced death benefit calculation. Assuming
$100,000 is allocated to the variable investment options (with no allocation to
the EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market,
the guaranteed interest option or the fixed maturity options), no additional
contributions, no transfers, no withdrawals and no loans under a Rollover TSA
contract, the enhanced death benefit for an annuitant age 45 would be
calculated as follows:
- ------------------------------------------------------------------------------------
End of
contract 6% roll up to age 85 Annual ratchet to age 85
year Account value enhanced death benefit(1) enhanced death benefit
- ------------------------------------------------------------------------------------
1 $105,000 $ 106,000(1) $ 105,000(3)
2 $115,500 $ 112,360(2) $ 115,500(3)
3 $129,360 $ 119,102(2) $ 129,360(3)
4 $103,488 $ 126,248(1) $ 129,360(4)
5 $113,837 $ 133,823(1) $ 129,360(4)
6 $127,497 $ 141,852(1) $ 129,360(4)
7 $127,497 $ 150,363(1) $ 129,360(4)
- ------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
6% ROLL-UP TO AGE 85
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the enhanced death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current enhanced death benefit.
ANNUAL RATCHET TO AGE 85
(3) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(4) At the end of contract years 4 through 7, the enhanced death benefit is the
enhanced death benefit at the end of the prior year since it is equal to or
higher than the current account value.
GREATER OF THE 6% ROLL-UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85
The enhanced death benefit under this option for each year shown would be the
greater of the amounts shown under the 6% roll-up to age 85 or the Annual
ratchet to age 85.
Appendix II: Enhanced death benefit example B-1
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Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 23
Custodian and Independent Accountants 24
Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option 24
Distribution of the contracts 26
Financial Statements 26
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR(R) SELECT(SM) STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator(R) Select(SM)
P.O. Box 1547 Secaucus, NJ 07096-1547
Please send me an Equitable Accumulator(R) Select(SM) SAI for SEPARATE ACCOUNT
NO. 49 dated May 1, 2002.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
(SAI 4ACS(5/02))
X00293/Select New Series 2002 Portfolio
Equitable Accumulator(R) Advisor(SM)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectuses for each Trust, which contain important information about their
portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) ADVISOR(SM)
Equitable Accumulator(R) Advisor(SM) is a deferred annuity contract issued by
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers death
benefit protection. It also offers a number of payout options. You invest to
accumulate value on a tax-deferred basis in one or more of our variable
investment options and the fixed maturity options ("investment options"). This
contract may not currently be available in all states.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager (2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
- --------------------------------------------------------------------------------
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 45 and
Separate Account No. 49. Each variable investment option, in turn, invests in a
corresponding securities portfolio of EQ Advisors Trust or AXA Premier VIP Trust
(the "Trusts"). Your investment results in a variable investment option will
depend on the investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
A contribution of at least $10,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
X00289
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) ADVISOR(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Advisor(SM) at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 21
Your right to cancel within a certain number of days 22
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 23
- --------------------------------------------------------------------------------
Your account value and cash value 23
Your contract's value in the variable investment options 23
Your contract's value in the fixed maturity options 23
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 24
- --------------------------------------------------------------------------------
Transferring your account value 24
Disruptive transfer activity 24
Dollar cost averaging 24
Rebalancing your account value 24
"We," "our," and "us" refer to Equitable Life.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 26
- --------------------------------------------------------------------------------
Withdrawing your account value 26
How withdrawals are taken from your account value 27
How withdrawals affect your minimum death benefit 27
Surrendering your contract to receive its cash value 27
When to expect payments 27
Annuity purchase factors 27
Your annuity payout options 27
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 30
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 30
Charges that the Trusts deduct 30
Group or sponsored arrangements 30
Other distribution arrangements 30
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 31
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 31
How death benefit payment is made 31
Beneficiary continuation option 32
- --------------------------------------------------------------------------------
7. TAX INFORMATION 34
- --------------------------------------------------------------------------------
Overview 34
Buying a contract to fund a retirement arrangement 34
Transfers among investment options 34
Taxation of nonqualified annuities 34
Individual retirement arrangements (IRAs) 36
Special rules for contracts funding qualified plans 37
Federal and state income tax withholding and
information reporting 37
Impact of taxes to Equitable Life 38
- --------------------------------------------------------------------------------
8. MORE INFORMATION 39
- --------------------------------------------------------------------------------
About Separate Account No. 45 and Separate Account No. 49 39
About the Trusts 39
About our fixed maturity options 39
About the general account 40
About other methods of payment 41
Dates and prices at which contract events occur 41
About your voting rights 41
About legal proceedings 42
About our independent accountants 42
Financial statements 42
Transfers of ownership, collateral assignments,
loans and borrowing 42
Distribution of the contracts 42
- --------------------------------------------------------------------------------
9. INVESTMENT PERFORMANCE 44
- --------------------------------------------------------------------------------
Communicating performance data 47
- --------------------------------------------------------------------------------
10. INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE 48
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I--Condensed financial information A-1
II--Purchase considerations for QP contracts B-1
III--Market value adjustment example C-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
Page
account value 23
annuitant 15
annuity payout options 27
beneficiary 32
business day 41
cash value 23
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 36
regular contributions 36
rollovers and direct transfers 36
conversion contributions 36
contributions to traditional IRAs 36
regular contributions 36
rollovers and transfers 36
disruptive transfer activity 24
EQAccess 6
fixed maturity amount 21
fixed maturity options 21
IRA 36
IRS 34
Page
investment options 17
market adjusted amount 21
market timing 24
market value adjustment 21
maturity value 21
minimum death benefit 32
NQ cover
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Roth Conversion IRA cover
Roth IRA 36
SAI cover
SEC cover
TOPS 6
traditional IRA 36
Trusts cover
unit 23
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract.
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed
Interest Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
- --------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). AXA, a French holding company for an
international group of insurance and related financial services companies, is
the sole shareholder of AXA Financial, Inc. As the sole shareholder, and under
its other arrangements with Equitable Life and Equitable Life's parent, AXA
exercises significant influence over the operations and capital structure of
Equitable Life and its parent. No company other than Equitable Life, however,
has any legal responsibility to pay amounts that Equitable Life owes under the
contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile service
may not be available at all times and/or we may be unavailable due to emergency
closing). In addition, the level and type of service available may be restricted
based on criteria established by us.
-------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
-------------------------------------------------------
Equitable Accumulator(R) Advisor(SM)
P.O. Box 13014
Newark, NJ 07188-0014
-------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
-------------------------------------------------------
Equitable Accumulator(R) Advisor(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
-------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR
MAIL:
-------------------------------------------------------
Equitable Accumulator(R) Advisor(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
-------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY:
-------------------------------------------------------
Equitable Accumulator(R) Advisor(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
-------------------------------------------------------
REPORTS WE PROVIDE:
-------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
-------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
-------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Website at http://www.equitable.com. Of course, for reasons beyond
our control, these services may sometimes be unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus)
-------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
-------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
You should send all contributions, notices, and requests to our processing
office at the address above.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA contract to a Roth Conversion IRA;
(3) election of the rebalancing program;
(4) tax withholding elections;
(5) election of the beneficiary continuation option;
6 Who is Equitable Life?
(6) IRA contribution recharacterizations;
(7) certain section 1035 exchanges; and
(8) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) dollar cost averaging;
(2) rebalancing;
(3) substantially equal withdrawals;
(4) systematic withdrawals; and
(5) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners, all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Advisor(SM) at a glance -- key features
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PROFESSIONAL INVESTMENT Equitable Accumulator(R) Advisor(SM) variable investment options invest in different portfolios managed by
MANAGEMENT professional investment advisers.
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY OPTIONS o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to state
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to maturity.
----------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a market
value adjustment due to differences in interest rates. This may increase or decrease any value that you
have left in that fixed maturity option. If you surrender your contract, a market value adjustment may
also apply.
- ------------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among variable investment options.
contract
----------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), or to fund an
employer retirement plan (QP or Qualified Plan), you should be aware that such annuities do not provide
tax deferral benefits beyond those already provided by the Internal Revenue Code. Before purchasing one of
these annuities, you should consider whether its features and benefits beyond tax deferral meet your needs
and goals. You may also want to consider the relative features, benefits and costs of these annuities
compared with any other investment that you may use in connection with your retirement plan or
arrangement. (For more information, see "Tax information," later in this Prospectus and in the SAI.)
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $10,000
o Additional minimum: $ 1,000
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Contract surrender
You may incur income tax and a tax penalty for certain withdrawals.
- ------------------------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Dollar cost averaging
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
- ------------------------------------------------------------------------------------------------------------------------------------
8 Equitable Accumulator(R) Advisor(SM) at a glance -- key features
FEES AND CHARGES o Daily charges on amounts invested in variable investment
options for mortality and expense risks charge and
administrative charge at an annual rate of up to 0.50%.
-----------------------------------------------------------------
The "contract date" is the effective date of a contract.
This usually is the business day we receive the properly
completed and signed application, along with any other
required documents, and your initial contribution. Your
contract date will be shown in your contract. The 12-month
period beginning on your contract date and each 12-month
period after that date is a "contract year." The end of each
12-month period is your "contract date anniversary."
-----------------------------------------------------------------
o We deduct a charge designed to approximate certain
taxes that may be imposed on us, such as premium taxes in
your state. This charge is generally deducted from the
amount applied to an annuity payout option.
o Annual expenses of the Trusts' portfolios are
calculated as a percentage of the average daily net assets
invested in each portfolio. These expenses include management
fees ranging from 0.25% to 1.20% annually, 12b-1 fees of 0.25%
annually and other expenses.
- --------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-83
Rollover IRA: 20-83; Roth Conversion IRA: 20-83; QP: 20-75.
- --------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
CURRENTLY, YOU MAY PURCHASE A CONTRACT ONLY IF YOU ARE A PARTICIPANT IN AN
ACCOUNT ESTABLISHED UNDER A FEE-BASED PROGRAM SPONSORED AND MAINTAINED BY A
REGISTERED BROKER-DEALER OR OTHER FINANCIAL INTERMEDIARY WE APPROVE (INCLUDING
AXA ADVISORS, LLC, ONE OF THE DISTRIBUTORS OF THE CONTRACTS AND AN AFFILIATE OF
EQUITABLE LIFE). WE MAY, IN THE FUTURE, OFFER THIS CONTRACT THROUGH OTHER MEANS.
THE FEES AND EXPENSES OF A FEE-BASED PROGRAM ARE SEPARATE FROM AND IN ADDITION
TO THE FEES AND EXPENSES OF THE CONTRACT AND GENERALLY PROVIDE FOR VARIOUS
BROKERAGE SERVICES. IF YOU PURCHASE THIS CONTRACT THROUGH A FEE-BASED
ARRANGEMENT AND LATER TERMINATE THE ARRANGEMENT, YOUR CONTRACT WILL CONTINUE IN
FORCE. THERE MAY BE CHARGES ASSOCIATED WITH THE FEE-BASED ARRANGEMENT SHOULD YOU
DECIDE TO NO LONGER PARTICIPATE IN THE ARRANGEMENT. PLEASE CONSULT WITH YOUR
PROGRAM SPONSOR FOR MORE DETAILS ABOUT YOUR FEE-BASED PROGRAM.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Advisor(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Each of the
charges and expenses is more fully described in "Charges and expenses" later in
this Prospectus. For a complete description of portfolio charges and expenses,
please see the attached prospectuses for each Trust. The table does not reflect
any fees and charges imposed by your fee-based program.
The fixed maturity options are not covered by the fee table and examples.
However, a market value adjustment (up or down) may apply as a result of a
withdrawal, transfer or surrender of amounts from a fixed maturity option.
- --------------------------------------------------------------------------------
Charges we deduct from your variable investment options expressed as an
annual percentage of daily net assets
- --------------------------------------------------------------------------------
Mortality and expense risks charge and administrative charge(1) 0.50%
Total annual expenses 0.50%
- --------------------------------------------------------------------------------
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- -----------------------------------------------------------------------------------------------------------------
Net Total
Management Other Annual
Fees Expenses Expenses
(After expense (After expense (After expense
limitation)(2) 12b-1 Fees(3) limitation)(4) limitation)(5)
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- -----------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- -----------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- -----------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- -----------------------------------------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) The management fees for each portfolio cannot be increased without a vote
of each portfolio's shareholders. See footnote (5) for any expense
limitation agreement information.
(3) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
Fee table 11
(4) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Also, initial seed capital was invested for the
Portfolios of the AXA Premier VIP Trust on December 31, 2001, thus "Other
Expenses" shown are estimated. See footnote (5) for any expense limitation
agreement information.
(5) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios, if
necessary, in an amount that limits each Portfolio's Total Annual Expenses
(exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the management
fees waived or limited and other expenses assumed and paid by Equitable
Life pursuant to the expense limitation agreement provided that the
Portfolio's current annual operating expenses do not exceed the operating
expense limit determined for such Portfolio. For more information see the
prospectus for each Trust. The following chart indicates management fees
and other expenses before any fee waivers and/or expense reimbursements
that would have applied to each Portfolio. Portfolios that are not listed
below do not have an expense limitation arrangement in effect or the
expense limitation arrangement did not result in a fee waiver or
reimbursement.
- ----------------------------------------------------------------------------
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- ----------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ----------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- ----------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ----------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- ----------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- ----------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution is
invested in one of the variable investment options listed and a 5% annual return
is earned on the assets in that option.(1)
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the examples.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
- --------------------------------------------------------------------------------------
At the end of each period
shown, the expenses would be:
- --------------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 15.22 $ 47.28 $ 81.61 $ 178.42
AXA Premier VIP Health Care $ 24.68 $ 75.92 $ 129.78 $ 276.86
AXA Premier VIP International Equity $ 24.15 $ 74.34 $ 127.16 $ 271.62
AXA Premier VIP Large Cap Core Equity $ 19.43 $ 60.07 $ 103.25 $ 223.28
AXA Premier VIP Large Cap Growth $ 19.43 $ 60.07 $ 103.25 $ 223.28
AXA Premier VIP Large Cap Value $ 19.43 $ 60.07 $ 103.25 $ 223.28
AXA Premier VIP Small/Mid Cap Growth $ 22.05 $ 68.02 $ 116.59 $ 250.41
AXA Premier VIP Small/Mid Cap Value $ 22.05 $ 68.02 $ 116.59 $ 250.41
AXA Premier VIP Technology $ 24.68 $ 75.92 $ 129.78 $ 276.86
EQ/Aggressive Stock $ 15.12 $ 46.96 $ 81.06 $ 177.28
EQ/Alliance Common Stock $ 13.44 $ 41.81 $ 72.30 $ 158.81
EQ/Alliance Global $ 16.80 $ 52.09 $ 89.77 $ 195.46
EQ/Alliance Growth and Income $ 14.49 $ 45.03 $ 77.78 $ 170.39
EQ/Alliance Growth Investors $ 14.49 $ 45.03 $ 77.78 $ 170.39
EQ/Alliance Intermediate Government
Securities $ 14.39 $ 44.71 $ 77.23 $ 169.24
EQ/Alliance International $ 19.43 $ 60.07 $ 103.25 $ 223.28
EQ/Alliance Money Market $ 12.08 $ 37.62 $ 65.13 $ 143.59
EQ/Alliance Premier Growth $ 17.33 $ 53.69 $ 92.47 $ 201.08
EQ/Alliance Quality Bond $ 14.18 $ 44.07 $ 76.14 $ 166.93
EQ/Alliance Small Cap Growth $ 16.38 $ 50.81 $ 87.60 $ 190.94
EQ/Alliance Technology $ 17.33 $ 53.69 $ 92.47 $ 201.08
EQ/AXP New Dimensions $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/AXP Strategy Aggressive $ 15.75 $ 48.89 $ 84.33 $ 184.13
EQ/Balanced $ 14.70 $ 45.68 $ 78.88 $ 172.69
EQ/Bernstein Diversified Value $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/Calvert Socially Responsible $ 16.27 $ 50.49 $ 87.05 $ 189.81
EQ/Capital Guardian International $ 17.85 $ 55.29 $ 95.18 $ 206.67
EQ/Capital Guardian Research $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/Capital Guardian U.S. Equity $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/Emerging Markets Equity $ 24.15 $ 74.34 $ 127.16 $ 271.62
EQ/Equity 500 Index $ 11.13 $ 34.70 $ 60.15 $ 132.93
EQ/Evergreen Omega $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/FI Mid Cap $ 15.75 $ 48.89 $ 84.33 $ 184.13
EQ/FI Small/Mid Cap Value $ 16.80 $ 52.09 $ 89.77 $ 195.46
EQ/High Yield $ 14.91 $ 46.32 $ 79.97 $ 174.99
EQ/International Equity Index $ 16.80 $ 52.09 $ 89.77 $ 195.46
EQ/J.P. Morgan Core Bond $ 13.65 $ 42.46 $ 73.40 $ 161.14
EQ/Janus Large Cap Growth $ 17.33 $ 53.69 $ 92.47 $ 201.08
EQ/Lazard Small Cap Value $ 16.80 $ 52.09 $ 89.77 $ 195.46
EQ/Marsico Focus $ 17.33 $ 53.69 $ 92.47 $ 201.08
EQ/Mercury Basic Value Equity $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/MFS Emerging Growth Companies $ 15.43 $ 47.92 $ 82.70 $ 180.71
EQ/MFS Investors Trust $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/MFS Research $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/Putnam Growth & Income Value $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/Putnam International Equity $ 18.38 $ 56.89 $ 97.87 $ 212.23
EQ/Putnam Voyager $ 15.22 $ 47.28 $ 81.61 $ 178.42
EQ/Small Company Index $ 14.18 $ 44.07 $ 76.14 $ 166.93
- --------------------------------------------------------------------------------------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods shown
in the example. This is because if the amount applied to purchase an
annuity payout option is less than $2,000, or the initial payment is less
than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money" later
in this Prospectus.
Fee table 13
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
14 Fee table
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount of $10,000 to purchase
a contract. You may make additional contributions of at least $1,000 each,
subject to limitations noted below. The following table summarizes our rules
regarding contributions to your contract. All ages in the table refer to the age
of the annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
FOR ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 83 o After-tax money. o No additional contributions after age 84.
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue
Code.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 83 o Eligible rollover distributions from TSA o No rollover or direct transfer contributions
contracts or other 403(b) arrangements, after age 84.
qualified plans, and governmental EDC
plans. o Contributions after age 70-1/2 must be net of
required minimum distributions.
o Rollovers from another traditional indi- o Although we accept regular IRA contribu-
vidual retirement arrangement. tions (limited to $3,000 for the calendar
year 2002) under Rollover IRA contracts, we
intend that this contract be used primarily
for rollover and direct transfer contributions.
o Direct custodian-to-custodian transfers
from another traditional individual retire- o Additional catch-up contributions totalling
ment arrangement. up to $500 can be made for the calendar
year ending 2002 where the owner is at least age
o Regular IRA contributions. 50 but under age 70-1/2 at any time during
2002.
o For the calendar year 2002 and later, addi-
tional "catch-up" contributions.
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 83 o Rollovers from another Roth IRA. o No rollover or direct transfer
IRA contributions after age 84.
o Conversion rollovers from a traditional
IRA. o Conversion rollovers after age 70-1/2 must be
net of required minimum distributions for
o Direct transfers from another Roth IRA. the traditional IRA you are rolling over.
o Regular Roth IRA contributions. o You cannot roll over funds from a traditional
IRA if your adjusted gross income is
o For the calendar year 2002 and later, addi- $100,000 or more.
tional catch-up contributions.
o Although we accept regular Roth IRA con-
tributions (limited to $3,000 for the
calendar year 2002) under Roth IRA con-
tracts, we intend that this contract be used
primarily for rollover and direct transfer
contributions.
o Additional catch-up contributions totalling
up to $500 can be made for the calendar
year 2002 where the owner is at least age
50 at any time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- ------------------------------------------------------------------------------------------------------------------------------------
Available
Contract for annuitant Limitations on
type issue ages Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o Only transfer contributions from an exist- o Regular ongoing payroll contributions are
ing qualified plan trust as a change of not permitted.
investment vehicle under the plan.
o Only one additional transfer contribution
o The plan must be qualified under Section may be made during a contract year.
401(a) of the Internal Revenue Code.
o No additional transfer contributions after
o For 401(k) plans, transferred contributions age 76.
may only include employee pre-tax
contributions. o For defined benefit plans, employee contri-
butions are not permitted and we will not
accept contributions that fund more than
80% of the actuarial value of the plan
participant/employee's normal retirement
benefit.
o Contributions after age 70-1/2 must be net of any
any required minimum distributions.
See Appendix II at the end of this Prospectus for a discussion of purchase
considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information," later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Advisor(SM) contracts with the
same annuitant would then total more than $1,500,000. We may also refuse to
accept any contribution if the sum of all contributions under all Equitable Life
annuity accumulation contracts that you own would then total more than
$2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later in
this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA contracts, the owner and annuitant must be the same person. In
some cases, an IRA contract may be held in a custodial individual retirement
account for the benefit of the individual annuitant.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer. We
do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Methods of payment are discussed in detail in "More information"
later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any of the variable investment options will depend on
the investment performance of the underlying portfolios. You can lose your
principal when investing in the variable investment options. In periods of poor
market performance, the net return, after charges and expenses, may result in
negative yields, including for the EQ/Alliance Money Market variable investment
option. Listed below are the currently available portfolios, their investment
objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among variable investment options and the fixed maturity
options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
Portfolios of the Trusts
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Advisor(SM). These portfolios may even have the same manager(s) and/or a similar
name. However, there are numerous factors that can contribute to differences in
performance between two investments, particularly over short periods of time.
Such factors include the timing of stock purchases and sales; differences in
fund cash flows; and specific strategies employed by the portfolio manager.
- ----------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital Pacific Investment Management Company LLP
appreciation consistent with a
prudent level of risk
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital management L.P.
Institutional Capital Corporation
MFS Investment Management
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management LLC
TCW Investment Management Company
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and
increased income
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent Alliance Capital Management L.P.
with the Adviser's determination of reasonable risk
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income consistent Alliance Capital Management L.P.
Government Securities* with relative stability of principal
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P.
(including through its Bernstein
Investment Research and Management Unit)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current income, Alliance Capital Management L.P.
preserve its assets and maintain liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income consistent Alliance Capital Management L.P.
with moderate risk of capital
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Current Alliance Capital Management L.P.
income is incidental to the Portfolio's objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through both Alliance Capital Management L.P.
appreciation of capital and current income Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment
Research and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses that approximates Alliance Capital Management L.P.
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level
consistent with that of the S&P 500 Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management
Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return through a combina- Alliance Capital Management L.P.
tion of current income and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod- J.P. Morgan Investment Management, Inc.
erate risk of capital and maintenance of liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of capital Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth MFS Investment Management
Companies
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary MFS Investment Management
objective to seek reasonable current income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of capital and future MFS Investment Management
income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary Putnam Investment Management, LLC
Value objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and any increased Putnam Investment Management, LLC
income that results from this growth
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the Russell
2000 Index
- ------------------------------------------------------------------------------------------------------------------------------------
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are not
available in all states. Check with your financial professional to see if fixed
maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. This rate will never be less than
3%. If you make any withdrawals or transfers from a fixed maturity option before
the maturity date, we will make a "market value adjustment" that may increase or
decrease any fixed maturity amount you have left in that fixed maturity option.
We will discuss the market value adjustment below and in greater detail later in
this prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2003 through
2012. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December 31st
of the year before each of your fixed maturity options is scheduled to mature.
At that time, you may choose to have one of the following take place on the
maturity date, as long as none of the conditions listed above or in "Allocating
your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option, or
into any of the variable investment options; or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the next
available fixed maturity option with the earliest maturity date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount being
withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose either of two ways to allocate your contributions under your
contract: self-directed and principal assurance.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
You can elect this allocation program with a minimum initial contribution of
$10,000. You select a fixed maturity option and we specify the
Contract features and benefits 21
portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years or earlier
than 7 years from your contract date. You allocate the rest of your contribution
to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on February 15, 2002
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.84% on February 15, 2002, we would have
allocated $5,667.17 to that fixed maturity option and the balance to your choice
of variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA or QP
contract, before you select a maturity year that would extend beyond the year in
which you will reach age 70-1/2, you should consider whether your value in the
variable investment options, or your other traditional IRA funds, are sufficient
to meet your required minimum distributions. See "Tax information" later in this
Prospectus and in the SAI.
Please check with your financial professional if the principal assurance
allocation feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our processing office within 10 days after you receive it. If state
law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options (less
the daily charges we deduct), and (ii) any positive or negative market value
adjustments in the fixed maturity options through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) and (ii) above). For any IRA contract returned
to us within seven days after you receive it, we are required to refund the full
amount of your contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office or your financial professional can provide you with the
cancellation instructions.
Please note that if you are holding your traditional or Roth individual
retirement annuity contract in a custodial individual retirement account, your
contract and your account must match: you cannot hold a Roth individual
retirement annuity in a traditional individual retirement account and vice
versa.
22 Contract features and benefits
2. Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of (i) the values you have in the variable
investment options and (ii) the market adjusted amounts in the fixed maturity
options. These amounts are subject to certain fees and charges discussed in
"Charges and expenses" later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value. Please see
"Surrendering your contract to receive its cash value" in "Accessing your money"
later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the charges that we deduct under the contract.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option less daily charges for mortality and expense risks
and administrative expenses.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal; and/or
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option.
A description of how unit values are calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
Determining your contract's value 23
3. Transferring your money among investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Advisor(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer instructions
of an agent acting under a power of attorney or otherwise who is acting on
behalf of one or more owners. In making these determinations, we may consider
the combined transfer activity of annuity contracts and life insurance policies
that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However, we
may not continue to provide such letters. We may also, in our sole discretion
and without further notice, change what we consider disruptive transfer
activity, as well as change our procedures to restrict this activity.
DOLLAR COST AVERAGING
Dollar cost averaging allows you to gradually transfer amounts from the
EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the other
variable investment options you select. This will cause you to purchase more
units if the unit's value is low and fewer units if the unit's value is high.
Therefore, you may get a lower average cost per unit over the long term. This
plan of investing, however, does not guarantee that you will earn a profit or be
protected against losses. You may not make transfers to the fixed maturity
options.
If your value in the EQ/Alliance Money Market option is at least $5,000, you may
choose, at any time, to have a specified dollar amount of your value transferred
from that option to the other variable investment options. You can select to
have transfers made on a monthly, quarterly or annual basis. The transfer date
will be the same calendar day of the month as the contract date, but not later
than the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the
EQ/Alliance Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers scheduled
to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The dollar cost averaging program will then
end. You may change the transfer amount once each contract year, or cancel this
program at any time.
----------------------------------
You may not elect dollar cost averaging if you are participating in the
rebalancing program. There is no charge for the dollar cost averaging feature.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually on a contract year basis).
24 Transferring your money among investment options
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date. Your
entire account value in the variable investment options must be included in the
rebalancing program.
- --------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the dollar
cost averaging program. Rebalancing is not available for amounts you have
allocated in the fixed maturity options. There is no charge for the rebalancing
feature.
Transferring your money among investment options 25
4. Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals, see
"Tax information" later in this Prospectus and in the SAI.
- --------------------------------------------------------------------------------
Method of withdrawal
- --------------------------------------------------------------------------------
Lifetime
required
Substan- minimum
Contract Lump sum Systematic tially equal distribution
- --------------------------------------------------------------------------------
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Roth Conversion
IRA Yes Yes Yes No
- --------------------------------------------------------------------------------
QP Yes No No Yes
- --------------------------------------------------------------------------------
We impose no withdrawal charge for withdrawals from the Equitable Accumulator(R)
Advisor(SM) variable annuity contract. However, withdrawals, including
withdrawals made to pay all or part of any fee that may be associated with the
fee-based program, may be subject to income tax and a 10% penalty tax, as
described in "Tax information" later in this Prospectus and in the SAI. In
addition, the fee-based program sponsor may apply a charge if you decide to no
longer participate in the program. You should consult with your program sponsor
for more details about your particular fee-based arrangement.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time. The
minimum amount you may withdraw is $300. If you request to withdraw more than
90% of a contract's current cash value, after a withdrawal, we will treat it as
a request to surrender the contract for its cash value. See "Surrendering your
contract to receive its cash value" below.
SYSTEMATIC WITHDRAWALS
(NQ and all IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would be
less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, or amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change the
amount or percentage in any contract year in which you have already taken a lump
sum withdrawal. You can cancel the systematic withdrawal option at any time.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus. Once you begin to take substantially
equal withdrawals, you should not stop them or change the pattern of your
withdrawals until after the later of age 59-1/2 or five full years after the
first withdrawal. If you stop or change the withdrawals or take a lump sum
withdrawal, you may be liable for the 10% federal tax penalty that would have
otherwise been due on prior withdrawals made under this option and for any
interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump sum
withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you to
cancel this option, you have completed at least 5 years of payments and attained
age 59-1/2 or you take a lump sum withdrawal. You may elect to start receiving
substantially equal withdrawals again, but the payments may not restart in the
same contract year in which you took a lump sum withdrawal. We will calculate
the new withdrawal amount.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA and QP contracts only -- See "Tax information" later in this
Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250 or, if less, your account value. If your account value is
less than $500 after the withdrawal, we will treat it as a request to surrender
the contract for its
26 Accessing your money
cash value. See "Surrendering your contract to receive its cash value" below.
You may elect the method you want us to use to calculate your minimum
distribution withdrawals from the choices we offer. Currently, minimum
distribution withdrawal payments will be made annually. See the "Required
minimum distributions" section in "Tax information" later in this Prospectus and
in the SAI.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
- --------------------------------------------------------------------------------
For Rollover IRA and QP contracts, we will send a form outlining the
distribution options available in the year you reach age 70-1/2 (if you have not
begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR MINIMUM DEATH BENEFIT
Withdrawals will reduce your minimum death benefit on a pro rata basis.
Reduction on a pro rata basis means that we calculate the percentage of your
current account value that is being withdrawn and we reduce your current benefit
by that same percentage. For example, if your account value is $30,000 and you
withdraw $12,000, you have withdrawn 40% of your account value. If your minimum
death benefit was $40,000 before the withdrawal, it would be reduced by $16,000
($40,000 x .40) and your new minimum death benefit after the withdrawal would be
$24,000 ($40,000 - $16,000).
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. For a
surrender to be effective, we must receive your written request and your
contract at our processing office. We will determine your cash value on the date
we receive the required information. All benefits under the contract will
terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below. For
the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you withdraw
and, upon surrender, payment of the cash value. We may postpone such payments or
applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the annuity payout options. The annuity payout options are
discussed under "Your annuity payout options" below. The guaranteed annuity
purchase factors are those factors specified in your contract. The current
annuity purchase factors are those factors that are in effect at any given time.
Annuity purchase factors are based on interest rates, mortality tables,
frequency of payments, the form of annuity benefit, and the annuitant's (and any
joint annuitant's) age and sex in certain instances.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Advisor(SM) offers you several choices of annuity
payout options. Some enable you to receive fixed annuity payments, which can be
either level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue.
Accessing your money 27
- --------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- --------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not
payout options available in New York)
Life annuity with period
certain
- --------------------------------------------------------------------
Income Manager payout options Life annuity with a
(available for annuitants period certain
age 83 or less at Period certain annuity
contract issue)
- --------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the annuitant
is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A fixed life annuity with a
period certain is the form of annuity under the contract that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years even if the annuitant dies
before the end of the period certain. The guaranteed period may not exceed
the annuitant's life expectancy. This option does not guarantee payments for
the rest of the annuitant's life. It does not permit any repayment of the
unpaid principal, so you cannot elect to receive part of the payments as a
single sum payment with the rest paid in monthly annuity payments. This
payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
the annuitant's life and, after the annuitant's death, payments continue to the
survivor. We may offer other payout options not outlined here. Your financial
professional can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments that will be based
either on the tables of guaranteed annuity purchase factors in your contract or
on our then current annuity purchase factors, whichever is more favorable for
you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout annuity
contracts. The other payout annuity contracts provide higher or lower income
levels, but do not have all the features of the Income Manager payout annuity
contract. You may request an illustration of the Income Manager payout annuity
contract from your financial professional. Income Manager payout options are
described in a separate prospectus that is available from your financial
professional. Before you select an Income Manager payout option, you should read
the prospectus which contains important information that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and IRA
contracts). The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only).
For QP contracts, if you want to elect an Income Manager payout option, we will
first roll over amounts in such contract to a Rollover IRA contract. You will be
the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Advisor(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Advisor(SM) contract. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on the
payout option that you choose and the timing of your purchase as it relates to
any market value adjustments.
28 Accessing your money
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return your
contract before annuity payments begin unless you are applying only some of your
account value to an Income Manager contract. The contract owner and annuitant
must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Advisor(SM) contract date.
Except with respect to the Income Manager annuity payout options, where payments
are made on the 15th day of each month, you can change the date your annuity
payments are to begin anytime before that date as long as you do not choose a
date later than the 28th day of any month.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity and the applicable annuity purchase factors, discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less than
$2,000 or the initial payment under the form elected is less than $20 monthly,
we reserve the right to pay the account value in a single sum rather than as
payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- ----------------------------------
Maximum
Issue age annuitization age
- ----------------------------------
0-75 85
76 86
77 87
78-80 88
81-83 90
- ----------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments have
begun, no change can be made other than: (i) transfers (if permitted in the
future) among the variable investment options if a Variable Immediate Annuity
payout option is selected; and (ii) withdrawals or contract surrender if an
Income Manager annuity payout option is chosen.
Accessing your money 29
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
MORTALITY AND EXPENSE RISKS CHARGE AND ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the minimum death
benefit, as well as administrative expenses under the contract. The daily charge
is equivalent to an annual rate of up to 0.50% of the net assets in each
variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables, shown
in each contract, will differ from actual mortality experience. Lastly, we
assume a mortality risk to the extent that at the time of death, the minimum
death benefit exceeds the account value of the contract. The expense risk we
assume is the risk that it will cost us more to issue and administer the
contracts than we expect.
The administrative charge is to compensate us for administrative expenses under
the contract.
We may reduce or eliminate the mortality and expense risks charge and
administrative charge if we believe that the risks or administrative expenses
for which this charge are imposed are reduced or eliminated. We will not permit
a reduction or elimination of this charge where it would be unfairly
discriminatory.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain applicable taxes that may be
imposed on us, such as premium taxes in your state. Generally, we deduct the
charge from the amount applied to provide an annuity payout option. The current
charge that might be imposed by us varies by state and ranges from 0% to 3.5%
(the rate is 1% in Puerto Rico).
FEE-BASED EXPENSES
The fees and expenses of a fee-based program are separate from and in addition
to the fees and expenses of the contract. Please consult with your program
sponsor for more details about your fee-based program.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges, please
refer to the prospectuses for the Trusts following this Prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the mortality and
expense risks charge and administrative charge or change the minimum
contribution requirements. We also may offer variable investment options that
invest in shares of either Trust that are not subject to the 12b-1 fee. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for IRA contracts. Sponsored arrangements include
those in which an employer allows us to sell contracts to its employees or
retirees on an individual basis.
Our costs for mortality generally vary with the size and stability of the group
or sponsoring organization, among other factors. We take all these factors into
account when reducing charges. To qualify for reduced charges, a group or
sponsored arrangement must meet certain requirements, such as requirements for
size and number of years in existence. Group or sponsored arrangements that have
been set up solely to buy contracts or that have been in existence less than six
months will not qualify for reduced charges.
We also may establish different rates to maturity for the fixed maturity options
under different classes of contracts for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules, the
Employee Retirement Income Security Act of 1974 ("ERISA") or both. We make no
representations with regard to the impact of these and other applicable laws on
such programs. We recommend that employers, trustees and others purchasing or
making contracts available for purchase under such programs seek the advice of
their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as
30 Charges and expenses
sales through persons who are compensated by clients for recommending
investments and who receive no commission or reduced commissions in connection
with the sale of the contracts. We will not permit a reduction or elimination of
charges where it would be unfairly discriminatory.
Charges and expenses 31
6. Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you a written confirmation when we receive your request. Under jointly
owned contracts, the surviving owner is considered the beneficiary, and will
take the place of any other beneficiary. In a QP contract, the beneficiary must
be the trustee.
Where an IRA contract is owned in a custodial individual retirement account, the
custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
minimum death benefit. The minimum death benefit is equal to your total
contributions less withdrawals. See "How withdrawals affect your minimum death
benefit" earlier in this Prospectus. We determine the amount of the death
benefit as of the date we receive satisfactory proof of the annuitant's death,
any required instructions for the method of payment, information and forms
necessary to effect payment.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually owned IRA contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner can change after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive the death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes the
sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
successor owner for this purpose, the entire interest in the contract must be
distributed under the following rules:
o The cash value of the contract must be fully paid to the designated
beneficiary successor owner (new owner) within five years after your death
(or in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will pay
any cash value five years after your death (or the death of the first owner
to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor owner/annuitant feature,
we will increase the account value to equal your minimum death benefit as of the
date of your death if such death benefit is greater than such account value
(adjusted for any subsequent withdrawals). The increase in the account value
will be allocated to the investment options according to the allocation
percentages we have on file for your contract. In determining whether the
minimum
32 Payment of death benefit
death benefit will continue to grow, we will use your surviving spouse's age (as
of the date we receive satisfactory proof of your death, any required
instructions and the information and forms necessary to effect the successor
owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account, and
your spouse is the sole primary beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to keep
the contract in your name and receive distributions under the contract instead
of receiving the death benefit in a single sum. In order to elect this option,
the beneficiary must be an individual. Certain trusts with only individual
beneficiaries will be treated as individuals. We require this election to be
made within nine months following the date we receive proof of your death and
before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the minimum death benefit
as of the date of your death, if such death benefit is greater than such account
value (adjusted for any subsequent withdrawals). The beneficiary continuation
option is available if we have received regulatory approval in your state. Where
an IRA contract is owned in a custodial individual retirement account, the
custodian may reinvest the death benefit in an Accumulator(R) Advisor(SM)
individual retirement annuity contract, using the account beneficiary as the
annuitant. Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The death benefit (including the minimum death benefit) provisions will no
longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value. Any partial withdrawal must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected by
the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your death,
and determined on a term certain basis). These payments must begin no later than
December 31st of the calendar year after the year of your death. However, if you
die before your Required Beginning Date for Required Minimum Distributions, as
discussed in "Tax information" later in this Prospectus and in the SAI, your
beneficiary may choose the "5-year rule" instead of annual payments over life
expectancy. If your beneficiary chooses this, your beneficiary may take
withdrawals as desired, but the entire account value must be fully withdrawn by
December 31st on the 5th calendar year after your death.
Payment of death benefit 33
7. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Advisor(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA or QP. Therefore, we
discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax and withholding rules for non-U.S.
taxpayers or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans. In
addition to increasing amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs"): an IRA annuity contract such as
this one, or an IRA custodial account. Annuity contracts can also be purchased
in connection with retirement plans qualified under Code Section 401 ("QP
contracts"). How these arrangements work, including special rules applicable to
each, are described in the specific sections for each type of arrangement below.
More information on IRAs is provided in the SAI. You should be aware that the
funding vehicle for a qualified arrangement does not provide any tax deferral
benefit beyond that already provided by the Code for all permissible funding
vehicles. Before choosing an annuity contract, therefore, you should consider
the annuity's features and benefits, such as the guaranteed minimum death
benefit, selection of investment funds and fixed maturity options and choices of
pay-out options available in Accumulator(R) Advisor(SM), as well as the features
and benefits of other permissible funding vehicles and the relative costs of
annuities and other arrangements. You should be aware that cost may vary
depending on the features and benefits made available and the charges and
expenses of the investment options or funds that you elect. See also Appendix II
for a discussion of QP contracts at the end of this Prospectus.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew that
were not taxable.
34 Tax information
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
This includes withdrawals to pay all or a part of any fee that may be associated
with the fee-based program. See "Withdrawing your account value" in "Accessing
your money" earlier in this prospectus. Generally, earnings are your account
value less your investment in the contract. If you withdraw an amount which is
more than the earnings in the contract as of the date of the withdrawal, the
balance of the distribution is treated as a return of your investment in the
contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o The contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Advisor(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured under the life
insurance or endowment contract must be the same as the owner and annuitant,
respectively under the Equitable Accumulator(R) Advisor(SM) contract.
The tax basis, also referred to as your tax basis in the contract, of the source
contract carries over to the Equitable Accumulator(R) Advisor(SM) NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as ordinary
income (not capital gain) to the extent it exceeds your investment in the
contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. Some
of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity. If you were to be considered the owner of the underlying shares, income
and gains attributable to such portfolio shares would be currently included in
your gross income for federal income tax purposes. Incidents of investment
control could include among other items, the number of investment options
available under a contract and/or the frequency of transfers available under the
contract. In connection with the issuance of regulations concerning investment
diversification in 1986, the Treasury Department announced that the
diversification regulations did not provide guidance on investor control but
that guidance would be issued in the form of regulations or rulings. As of the
date of this prospectus, no such guidance has been issued. It is not known
whether such guidelines, if in fact issued, would have retroactive adverse
effect on existing contracts. We can not provide assurance as to the terms or
scope of any future guidance nor any assurance that such guidance would not be
imposed on a retroactive basis to contracts issued under this prospectus. We
reserve the right to modify the contract as necessary to attempt to prevent you
from being considered the owner of the assets of the separate account for tax
purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of
Tax information 35
amounts distributed from a contract may differ in the two jurisdictions.
Therefore, you might have to file both U.S. and Puerto Rico tax returns, showing
different amounts of income from the contract for each tax return. Puerto Rico
generally provides a credit against Puerto Rico tax for U.S. tax paid. Depending
on your personal situation and the timing of the different tax liabilities, you
may not be able to take full advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets funding the account for the benefit of the IRA owner. The assets
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account. In an
individual retirement annuity, an insurance company issues an annuity contract
that serves as the IRA.
There are two basic types of IRAs, as follows:
o "traditional IRAs," typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Advisor(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Advisor(SM) traditional IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances, your
nonworking spouse, former spouse or surviving spouse may contribute to an IRA.
You can make regular contributions for any year to a traditional IRA within
federal tax law limits up until the calendar year you reach the age 70-1/2.
Regular contributions for any year to a Roth IRA can be made at any time during
your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether such
contributions are eligible for special tax treatment (for example, deductibility
from income or a special credit) may vary, depending on your income, age and
whether you participate in an employer-sponsored retirement plan. Roth IRA
contributions are not tax deductible. The maximum regular contribution that can
be made to all of your IRAs (whether traditional or Roth) for 2002 is $3,000.
The maximum regular contribution for 2002 is increased to $3,500 if you are at
least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to
36 Tax information
another because the funds will generally be subject to the rules of the
recipient plan and the features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs is
contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your beneficiary.
Withdrawals from an IRA , surrender of an IRA, death benefits from an IRA and
annuity payments from an IRA may be fully or partially taxable. Withdrawals and
distributions from IRAs are taxable as ordinary income (not capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also have
to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the IRA
after the owner reaches age 70-1/2. These rules also require distributions after
the owner's death. No distributions are required to be made from Roth IRAs until
after the Roth IRA owner's death, but then the required minimum distribution
rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution is
includable in your gross income. This may result in tax being withheld even
though the Roth IRA distribution is ultimately not taxable. You can elect out
of withholding as described below.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here in
detail. However, we may require additional documentation in the case of payments
made to non-United States persons and United States persons living abroad prior
to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective unless
and until you revoke it. You may revoke or change your withholding election at
any time.
Tax information 37
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an "eligible rollover
distribution" from a qualified plan. If a non-periodic distribution from a
qualified plan is not an "eligible rollover distribution" then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans are subject to mandatory 20% withholding. The
plan administrator is responsible for withholding from qualified plan
distributions. An eligible rollover distribution from a qualified plan can be
rolled over to another eligible retirement plan. All distributions from a
qualified plan are eligible rollover distributions unless they are on the
following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you and
your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 and Separate
Account No. 49 for taxes. We do not now, but may in the future set up reserves
for such taxes.
38 Tax information
8. More information
- --------------------------------------------------------------------------------
ABOUT SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 45 in 1994 and Separate Account No. 49 in 1996
under special provisions of the New York Insurance Law. These provisions prevent
creditors from any other business we conduct from reaching the assets we hold in
our variable investment options for owners of our variable annuity contracts,
including these contracts. We are the legal owner of all of the assets in
Separate Account No. 45 and Separate Account No. 49 and may withdraw any amounts
that exceed our reserves and other liabilities with respect to variable
investment options under our contracts. The results of the Separate Accounts'
operations are accounted for without regard to Equitable Life's other
operations.
Each Separate Account is registered under the Investment Company Act of 1940 and
is classified by that act as a "unit investment trust." The SEC, however, does
not manage or supervise Equitable Life or the Separate Accounts.
Each subaccount (variable investment option) within the Separate Accounts
invests solely in Class IB/B shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from either Separate Account, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate each Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against each Separate Account or a
variable investment option directly);
(5) to deregister the Separate Accounts under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Accounts and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999, EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the Alliance portfolios (other than EQ/Alliance Premier Growth
and EQ/Alliance Technology) were part of The Hudson River Trust. On October 18,
1999, these portfolios became corresponding portfolios of EQ Advisors Trust. AXA
Premium VIP Trust commenced operations on December 31, 2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish additional
portfolios or eliminate existing portfolios at any time. More detailed
information about each Trust, its portfolio investment objectives, policies,
restrictions, risks, expenses, its Rule 12b-1 Plan relating to its Class IB/B
shares, and other aspects of its operations, appear in the prospectuses for each
Trust, which are attached at the end of this Prospectus, or in the respective
SAIs which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table are illustrative only and
will most likely differ from the rates applicable at time of purchase. Current
FMO rates can be obtained from your financial professional.
The rates to maturity for new allocations as of February 15, 2002 and the
related price per $100 of maturity value were as shown below:
- --------------------------------------------------------------------------------
Fixed maturity
options with
February 15th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 15, 2002 maturity value
- --------------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.16% $ 93.97
2005 3.88% $ 89.20
2006 4.32% $ 84.43
2007 4.74% $ 79.32
2008 5.07% $ 74.31
- --------------------------------------------------------------------------------
More information 39
- --------------------------------------------------------------------------------
Fixed maturity
options with
February 15th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 15, 2002 maturity value
- --------------------------------------------------------------------------------
2009 5.33% $ 69.50
2010 5.54% $ 64.94
2011 5.72% $ 60.60
2012 5.84% $ 56.67
- --------------------------------------------------------------------------------
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option
(based on the withdrawal date) and convert it to fractional years
based on a 365-day year. For example, three years and 12 days
becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity
option.
(d) We determine the present value of the fixed maturity amount payable
at the maturity date, using the period determined in (b) and the
rate determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive or
negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. See Appendix III at the end of this
Prospectus for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no longer
offering new fixed maturity options, the "current rate to maturity" will be
determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held in
this separate account. We may, subject to state law that applies, transfer all
assets allocated to the separate account to our general account. We guarantee
all benefits relating to your value in the fixed maturity options, regardless of
whether assets supporting fixed maturity options are held in a separate account
or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities, and government and agency issues having durations
in the aggregate consistent with those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our general
obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of
40 More information
the federal securities laws relating to the accuracy and completeness of
statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution into
an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA or QP contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described in "How you can
make your contributions" in "Contract features and benefits" earlier in this
Prospectus.
Even if we accept the wire order and essential information, a contract generally
will not be issued until we receive and accept a properly completed application.
In certain cases we may issue a contract based on information forwarded
electronically. In these cases, you must sign our Acknowledgment of Receipt
form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgment of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgment of Receipt
form.
After your contract has been issued, additional contributions may be transmitted
by wire.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all the
required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the unit value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the unit
value next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts, we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in each prospectus for the Trusts or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a portfolio for which no instructions have been received in the
same proportion as we vote shares of that portfolio for which we have received
instructions. We
More information 41
will also vote any shares that we are entitled to vote directly because of
amounts we have in a portfolio in the same proportions that contract owners
vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate accounts
and an affiliated qualified plan trust. In addition, shares of the Trusts are
held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the effect
of the voting instructions of the contract owners, we currently do not foresee
any disadvantages because of this. The Board of Trustees of each Trust intends
to monitor events in order to identify any material irreconcilable conflicts
that may arise and to determine what action, if any, should be taken in
response. If we believe that a response to any of those events insufficiently
protects our contract owners, we will see to it that appropriate action is
taken.
SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Accounts require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45 or Separate Account No. 49, our ability to meet
our obligations under the contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001 and
2000, and for the three years ended December 31, 2001, incorporated in this
prospectus by reference to the 2001 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45 and Separate Account
No. 49, as well as the consolidated financial statements of Equitable Life, are
in the applicable SAI. The SAI is available free of charge. You may request one
by writing to our processing office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive notification
of any change at our processing office. You cannot assign your NQ contract as
collateral or security for a loan. Loans are also not available under your NQ
contract. In some cases, an assignment or change of ownership may have adverse
tax consequences. See "Tax information" earlier in this Prospectus.
Loans are not available and you cannot assign IRA contracts as security for a
loan or other obligation. If your individual retirement annuity contract is held
in your custodial individual retirement account, you may only assign or transfer
ownership of such an IRA contract to yourself.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your IRA contract to another
similar arrangement under federal income tax rules.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC and AXA Distributors,
LLC. For this purpose, AXA Advisors, LLC serves as the principal underwriter of
Separate Account No. 45 and AXA Distributors, LLC serves as the principal
underwriter of Separate Account No. 49. The offering of the contracts is
intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for sales and
marketing functions for the contracts funded through Separate Account No. 45.
AXA Advisors also acts as distributor for other Equitable Life annuity products
with different features, expenses and fees. AXA Advisors is registered with the
SEC as a broker-dealer and is a member of the National Association of Securities
Dealers, Inc. AXA Advisors' principal business address is 1290 Avenue of the
Americas, New York, New York 10104.
These contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
DISTRIBUTION OF THE CONTRACTS BY AXA DISTRIBUTORS, LLC
AXA Distributors, LLC ("AXA Distributors"), an indirect, wholly owned subsidiary
of Equitable Life, has responsibility for sales and marketing
42 More information
functions for contracts funded through Separate Account No. 49. AXA Distributors
also acts as distributor for other Equitable Life annuity products with
different features, expenses, and fees. AXA Distributors is registered with the
SEC as a broker-dealer and is a member of the National Association of Securities
Dealers, Inc. AXA Distributors' principal business address is 1290 Avenue of the
Americas, New York, New York 10104.
AXA Distributors is the successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. Like AXA Distributors, Equitable
Distributors, Inc. was owned by Equitable Holdings, LLC.
These contracts are sold by financial professionals of AXA Distributors, as well
as by affiliated and unaffiliated broker-dealers who have entered into selling
agreements with AXA Distributors. We pay broker-dealer sales compensation that
will generally not exceed an amount equal to 7% of total contributions made
under the contracts. AXA Distributors may also receive compensation and
reimbursement for its marketing services, under the terms of its distribution
agreement with Equitable Life. Broker-dealers receiving sales compensation will
generally pay a portion of it to their financial professional as commissions
related to sales of the contracts. The offering of the contracts is intended to
be continuous.
More information 43
9. Investment performance
- --------------------------------------------------------------------------------
The table below shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
The table takes into account all fees and charges under the contract, but does
not reflect the charges for any applicable taxes such as premium taxes or the
applicable annuity administrative fee, if any. Any fees and expenses associated
with the fee-based program are also not included. If the charges were reflected
they would effectively reduce the rates of return shown.
The results shown are based on the actual historical investment experience of
the variable investment options under "length of option period" since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not yet
commenced operations. For those periods, we have adjusted the results of the
portfolios to reflect the charges under the contracts that would have applied
had the investment option been available. The contracts will be offered for the
first time in 2002.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985, reflect the results of the variable investment options that preceded them.
The "Since portfolio inception" figures for these options are based on the date
of inception of the preceding variable investment options. We have adjusted
these results to reflect the maximum investment advisory fee payable for the
portfolios, as well as an assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessor that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and performance
information for these portfolios is not available as of the date of this
Prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECTS PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
44 Investment performance
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------- ------ ------- ----------
EQ/Aggressive Stock (25.55)% (3.68)% (3.40)%
EQ/Alliance Common Stock (11.19)% 9.17% 9.89%
EQ/Alliance Global (20.66)% 3.34% 3.83%
EQ/Alliance Growth Investors (13.07)% 6.75% 7.02%
EQ/Alliance Money Market 3.05% 4.38% 4.39%
EQ/Alliance Premier Growth (24.34)% -- (11.18)%
EQ/Alliance Small Cap Growth (13.67)% -- 8.86%
EQ/Alliance Technology (24.82)% -- (33.99)%
EQ/Bernstein Diversified Value 2.58% -- 5.35%
EQ/Capital Guardian International (21.28)% -- (4.28)%
EQ/Capital Guardian Research (2.51)% -- 3.52%
EQ/Capital Guardian U.S. Equity (2.50)% -- 1.45%
EQ/Emerging Markets Equity (5.63)% -- (5.54)%
EQ/Equity 500 Index (12.60)% 9.40% 10.12%
EQ/Evergreen Omega (17.43)% -- (7.49)%
EQ/FI Mid Cap (13.85)% -- (9.72)%
EQ/FI Small/Mid Cap Value 3.48% -- 9.04%
EQ/High Yield 0.18% (0.72)% (0.20)%
EQ/International Equity Index (25.84)% -- (2.03)%
EQ/J.P. Morgan Core Bond 7.40% -- 6.07%
EQ/Janus Large Cap Growth (23.35)% -- (27.52)%
EQ/Lazard Small Cap Value 17.15% -- 6.64%
EQ/Mercury Basic Value Equity 5.00% -- 13.28%
EQ/MFS Emerging Growth Companies (34.38)% -- 9.00%
EQ/MFS Investors Trust (16.40)% -- (3.68)%
EQ/MFS Research (22.21)% -- 5.48%
EQ/Putnam Growth & Income Value (7.28)% -- 5.02%
EQ/Putnam International Equity (21.92)% -- 7.64%
EQ/Putnam Voyager (24.84)% -- 6.52%
EQ/Small Company Index 1.55% -- 3.32%
- --------------------------------------------------------------------------------
Length of portfolio period
------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- --------------------------- ------- ------- -------- -----------
EQ/Aggressive Stock (8.85)% (3.68)% 3.40% 11.53%
EQ/Alliance Common Stock (1.98)% 9.17% 11.98% 13.34%
EQ/Alliance Global (4.15)% 3.34% 7.90% 8.19%
EQ/Alliance Growth Investors 0.38% 6.75% 8.33% 11.38%
EQ/Alliance Money Market 4.23% 4.38% 3.96% 5.98%
EQ/Alliance Premier Growth -- -- -- (11.18)%
EQ/Alliance Small Cap Growth 7.43% -- -- 8.86%
EQ/Alliance Technology -- -- -- (33.99)%
EQ/Bernstein Diversified Value 1.02% -- -- 5.34%
EQ/Capital Guardian International -- -- -- (4.28)%
EQ/Capital Guardian Research -- -- -- 3.52%
EQ/Capital Guardian U.S. Equity -- -- -- 1.44%
EQ/Emerging Markets Equity 3.12% -- -- (9.91)%
EQ/Equity 500 Index (2.14)% 9.40% -- 12.92%
EQ/Evergreen Omega (7.48)% -- -- (7.48)%
EQ/FI Mid Cap -- -- -- (10.42)%
EQ/FI Small/Mid Cap Value 3.12% -- -- 3.34%
EQ/High Yield (4.49)% (0.72)% 6.29% 6.67%
EQ/International Equity Index (8.30)% -- -- (2.03)%
EQ/J.P. Morgan Core Bond 5.27% -- -- 6.06%
EQ/Janus Large Cap Growth -- -- -- (28.04)%
EQ/Lazard Small Cap Value 11.83% -- -- 6.64%
EQ/Mercury Basic Value Equity 11.40% -- -- 13.28%
EQ/MFS Emerging Growth Companies (2.89)% -- -- 9.00%
EQ/MFS Investors Trust (3.68)% -- -- (3.68)%
EQ/MFS Research (3.51)% -- -- 5.48%
EQ/Putnam Growth & Income Value (1.12)% -- -- 5.02%
EQ/Putnam International Equity 2.80% -- -- 7.64%
EQ/Putnam Voyager (7.28)% -- -- 6.52%
EQ/Small Company Index 5.45% -- -- 3.32
- ------------------------------------------------------------------------------------
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October 16,
1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Alliance Technology (May 1,
2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap Value and EQ/Janus Large Cap Growth
(September 5, 2000); EQ/Balanced (May 18, 2001); EQ/Calvert Socially
Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier VIP Core
Bond, AXA Premier VIP Health Care, AXA Premier VIP International Equity, AXA
Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA
Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA
Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology, EQ/Alliance
Growth and Income, EQ/Alliance International, EQ/Alliance Quality Bond,
EQ/AXP New Dimensions and EQ/AXP Strategy Aggressive (January 14, 2002);
EQ/Alliance Intermediate Government Securities (April 1, 2002). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
Investment performance 45
TABLE FOR SEPARATE ACCOUNT 45
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-----------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------- ------ ------- ----------
EQ/Aggressive Stock (25.55)% (3.68)% 3.40%
EQ/Alliance Common Stock (11.19)% 9.17% 13.55%
EQ/Alliance Global (20.66)% 3.34% 6.67%
EQ/Alliance Growth and Income ( 2.04)% 13.49% 15.41%
EQ/Alliance Growth Investors (13.07)% 6.75% 9.45%
EQ/Alliance Intermediate Government Securities 7.35% 5.65% 5.84%
EQ/Alliance International (23.69)% (3.37)% 0.05%
EQ/Alliance Money Market 3.05% 4.38% 4.45%
EQ/Alliance Premier Growth (24.34)% -- (11.18)%
EQ/Alliance Small Cap Growth (13.67)% -- 8.86%
EQ/Alliance Technology (24.82)% -- (33.99)%
EQ/AXP New Dimensions (15.94)% -- (22.83)%
EQ/AXP Strategy Aggressive (33.80)% -- (47.82)%
EQ/Capital Guardian Research (2.51)% -- 3.52%
EQ/Capital Guardian U.S. Equity (2.50)% -- 1.45%
EQ/Emerging Markets Equity (5.63)% -- (8.41)%
EQ/Equity 500 Index (12.60)% 9.40% 13.27%
EQ/Evergreen Omega (17.43)% -- (7.49)%
EQ/FI Mid Cap (13.85)% -- (9.72)%
EQ/FI Small/Mid Cap Value 3.48% -- 3.34%
EQ/High Yield 0.18% (0.72)% 4.03%
EQ/International Equity Index (25.84)% -- (2.03)%
EQ/Janus Large Cap Growth (23.35)% -- (27.52)%
EQ/Mercury Basic Value Equity 5.00% -- 13.28%
EQ/MFS Emerging Growth Companies (34.38)% -- 9.00%
EQ/MFS Investors Trust (16.40)% -- (3.68)%
EQ/MFS Research (22.21)% -- 5.48%
EQ/Putnam Growth & Income Value (7.28)% -- 5.02%
EQ/Small Company Index 1.55% -- 3.32%
- ------------------------------------------------------------------------------------------
Length of portfolio period
---------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- --------------------------- ------- ------- -------- -----------
EQ/Aggressive Stock (8.85)% (3.68)% 3.40% 11.53%
EQ/Alliance Common Stock (1.98)% 9.17% 11.98% 13.34%
EQ/Alliance Global (4.15)% 3.34% 7.90% 8.19%
EQ/Alliance Growth and Income 7.66% 13.49% -- 12.87%
EQ/Alliance Growth Investors 0.38% 6.75% 8.33% 11.38%
EQ/Alliance Intermediate Government Securities 4.95% 5.65% 5.23% 5.93%
EQ/Alliance International (7.25)% (3.37)% -- 0.24%
EQ/Alliance Money Market 4.23% 4.38% 3.96% 5.98%
EQ/Alliance Premier Growth -- -- -- (11.18)%
EQ/Alliance Small Cap Growth 7.43% -- -- 8.86%
EQ/Alliance Technology -- -- -- (33.99)%
EQ/AXP New Dimensions -- -- -- (23.62)%
EQ/AXP Strategy Aggressive -- -- -- (48.59)%
EQ/Capital Guardian Research -- -- -- 3.52%
EQ/Capital Guardian U.S. Equity -- -- -- 1.44%
EQ/Emerging Markets Equity 3.12% -- -- (9.91)%
EQ/Equity 500 Index (2.14)% 9.40% -- 12.92%
EQ/Evergreen Omega (7.48)% -- -- (7.48)%
EQ/FI Mid Cap -- -- -- (10.42)%
EQ/FI Small/Mid Cap Value 3.12% -- -- 3.34%
EQ/High Yield (4.49)% (0.72)% 6.29% 6.67%
EQ/International Equity Index (8.30)% -- -- (2.03)%
EQ/Janus Large Cap Growth -- -- -- (28.04)%
EQ/Mercury Basic Value Equity 11.40% -- -- 13.28%
EQ/MFS Emerging Growth Companies (2.89)% -- -- 9.00%
EQ/MFS Investors Trust (3.68)% -- -- (3.68)%
EQ/MFS Research (3.51)% -- -- 5.48%
EQ/Putnam Growth & Income Value (1.12)% -- -- 5.02%
EQ/Small Company Index 5.45% -- -- 3.32%
* The variable option inception dates are: EQ/Aggressive Stock, EQ/Alliance
Common Stock, EQ/Alliance Global, EQ/Alliance Growth and Income, EQ/Alliance
Growth Investors, EQ/Alliance Intermediate Government Securities, EQ/Alliance
International, EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High
Yield (May 1, 1995); EQ/Alliance Small Cap Growth, EQ/FI Small/Mid Cap Value,
EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth Companies, EQ/MFS
Research and EQ/Putnam Growth & Income Value (May 1, 1997); EQ/Emerging
Markets Equity (September 2, 1997); EQ/International Equity Index and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy
Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September 5, 2000);
EQ/Balanced and EQ/Bernstein Diversified Value (May 18, 2001); EQ/Calvert
Socially Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier
VIP Core Bond, AXA Premier VIP Health Care, AXA Premier VIP International
Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap
Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap
Growth, AXA Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology,
EQ/Alliance Quality Bond, EQ/Capital Guardian International, EQ/J.P. Morgan
Core Bond, EQ/Lazard Small Cap Value, EQ/Putnam International Equity and
EQ/Putnam Voyager (January 14, 2002). No performance information is provided
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
46 Investment performance
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------
Barron's
Morningstar's Variable Annuity
Sourcebook
Business Week
Forbes
Fortune
Institutional Investor
Money
Kiplinger's Personal Finance
Financial Planning
Investment Adviser
Investment Management Weekly
Money Management Letter
Investment Dealers Digest
National Underwriter
Pension & Investments
USA Today
Investor's Business Daily
The New York Times
The Wall Street Journal
The Los Angeles Times
The Chicago Tribune
- --------------------------------------------------
From time to time we may also use different measurements the investment
performance of the variable investment options and/or the portfolios, including
the measurements that compare the performance to market indices that serve as
benchmarks. Market indices are not subject to any charges for investment
advisory fees, brokerage commission or other operating expenses typically
associated with a managed portfolio. Also, they do not reflect other contract
charges such as the mortality and expense risks charge, administrative charge
and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks therefore may be of limited use. We use them
because they are widely known and may help you to understand the universe of
securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts. Lipper data provides a more accurate picture than market benchmarks
of the Equitable Accumulator(R) Adviser(SM) performance relative to other
variable annuity products. The Lipper Survey contains two different universes,
which reflect different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges applicable
under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive of
capital changes, and then "annualized" (assuming that the same seven-day result
would occur each week for 52 weeks). Current yields for the EQ/Alliance Quality
Bond and EQ/High Yield options will be based on net changes in a hypothetical
investment over a given 30-day period, exclusive of capital changes, and then
"annualized" (assuming that the same 30-day result would occur each month for 12
months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality Bond and
EQ/High Yield options. The current yields and effective yields assume the
deduction of all contract charges and expenses other than any charge designed to
approximate certain taxes that may be imposed on us in your state such as
premium taxes. See "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option" in the SAI.
Investment performance 47
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2001, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act") will be considered to
become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is, or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Report on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
48 Incorporation of certain documents by reference
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Accounts 45 and 49 with the same daily asset charges of
0.50%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001
For the years ending
December 31,
--------------------
2001 2000
---- ----
EQ/Aggressive Stock
Unit value $ 58.69 $ 78.83
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance Common Stock
Unit value $ 271.84 $ 306.09
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance Global
Unit value $ 31.62 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance Growth and Income
Unit value $ 27.40 --
Separate Account 45 number of units outstanding (000's) 4 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance Growth Investors
Unit value $ 38.15 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities
Unit value $ 18.84 --
Separate Account 45 number of units outstanding (000's) 8 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance International
Unit value $ 10.22 --
Separate Account 45 number of units outstanding (000's) 3 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance Money Market
Unit value $ 34.09 $ 33.08
Separate Account 45 number of units outstanding (000's) 19 --
Separate Account 49 number of units outstanding (000's) 124 --
- ----------------------------------------------------------------------------------
EQ/Alliance Premier Growth
Unit value $ 7.29 $ 9.63
Separate Account 45 number of units outstanding (000's) 3 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth
Unit value $ 14.86 $ 17.22
Separate Account 45 number of units outstanding (000's) 4 --
Separate Account 49 number of units outstanding (000's) -- --
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
For the years
ending December 31,
-------------------
2001 2000
---- ----
EQ/Alliance Technology
Unit value $ 5.00 $ 6.65
Separate Account 45 number of units outstanding (000's) 9 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/AXP New Dimensions
Unit value $ 6.99 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive
Unit value $ 4.12 --
Separate Account 45 number of units outstanding (000's) 4 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Balanced
Unit value $ 46.74 --
Separate Account 45 number of units outstanding (000's) 3 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Bernstein Diversified Value
Unit value $ 12.31 $ 12.01
Separate Account 45 number of units outstanding (000's) 10 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Calvert Socially Responsible
Unit value $ 8.85 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Capital Guardian International
Unit value $ 8.90 $ 11.30
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Capital Guardian Research
Unit value $ 10.97 $ 11.25
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Capital Guardian U. S. Equity
Unit value $ 10.39 $ 10.66
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Emerging Markets Equity
Unit value $ 6.34 $ 6.72
Separate Account 45 number of units outstanding (000's) 2 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Equity 500 Index
Unit value $ 26.11 $ 29.88
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Evergreen Omega
Unit value $ 7.92 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
For the years
ending December 31,
-------------------
2001 2000
---- ----
EQ/FI Mid Cap
Unit value $ 8.64 $ 10.03
Separate Account 45 number of units outstanding (000's) 6 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value
Unit value $ 11.66 $ 11.27
Separate Account 45 number of units outstanding (000's) 13 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/High Yield
Unit value $ 27.00 $ 26.95
Separate Account 45 number of units outstanding (000's) 2 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/International Equity Index
Unit value $ 9.21 $ 12.42
Separate Account 45 number of units outstanding (000's) 5 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond
Unit value $ 12.65 $ 11.78
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Janus Large Cap Growth
Unit value $ 6.45 $ 8.42
Separate Account 45 number of units outstanding (000's) 10 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Lazard Small Cap Value
Unit value $ 12.93 $ 11.04
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Marsico Focus
Unit value $ 11.37 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity
Unit value $ 17.90 --
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies
Unit value $ 14.96 $ 22.79
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/MFS Investors Trust
Unit value $ 8.94 $ 10.69
Separate Account 45 number of units outstanding (000's) 2 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/MFS Research
Unit value $ 12.83 $ 16.49
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
Appendix I: Condensed financial information A-3
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
For the years ending
December 31,
------------
2001 2000
---- ----
EQ/Putnam Growth & Income Value
Unit value $ 12.57 $ 13.56
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Putnam International Equity
Unit value $ 14.10 $ 18.06
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Putnam Investors Growth
Unit value $ 13.43 $ 17.87
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/Small Company Index
Unit value $ 11.40 $ 11.22
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
- ----------------------------------------------------------------------------------
EQ/T.Rowe Price International Stock
Unit value $ 9.17 --
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
A-4 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Advisor(SM) QP contract in conjunction with a fee-based program should discuss
with their tax advisers whether this is an appropriate investment vehicle for
the employer's plan. Trustees should consider whether the plan provisions permit
the investment of plan assets in the QP contract, the distribution of such an
annuity and the payment of death benefits in accordance with the requirements of
the federal income tax rules. The QP contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
Assuming continued plan qualification and operation, earnings on qualified plan
assets will accumulate value on a tax-deferred basis even if the plan is not
funded by the Equitable Accumulator(R) Advisor(SM) QP contract or another
annuity. Therefore, you should purchase an Equitable Accumulator(R) Advisor(SM)
QP contract to fund a plan for the contract's features and benefits other than
tax deferral, after considering the relative costs and benefits of annuity
contracts and other types of arrangements and funding vehicles. This QP contract
accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A market value
adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/ employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that the QP contract
may not be an appropriate purchase for annuitants approaching or over age
70-1/2.
Finally, because the method of purchasing the QP contract, including the large
initial contribution, and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age requirements,
plan trustees should discuss with their advisers whether the purchase of the QP
contract would cause the plan to engage in prohibited discrimination in
contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
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The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2003 to a fixed maturity option with a maturity date of February
15, 2012 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value at the maturity date of $183,846 on the maturity
date. We further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
Hypothetical assumed rate to maturity
on February 15, 2007
-------------------------------------
5.00% 9.00%
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As of February 15, 2007 (before withdrawal)
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(1) Market adjusted amount $ 144,048 $ 119,487
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(2) Fixed maturity amount $ 131,080 $ 131,080
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(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
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On February 15, 2007 (after withdrawal)
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(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
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(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
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(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
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(7) Maturity value $ 120,032 $ 106,915
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(8) Market adjusted amount of (7) $ 94,048 $ 69,487
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Statement of additional information
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TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 16
Custodian and Independent Accountants 17
Yield Information for the EQ/Alliance Money Market Option, EQ/Alliance Quality
Bond Option and EQ/High Yield Option 17
Distribution of the contracts 18
Financial Statements 18
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR(R) ADVISOR(SM) STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator(R) Advisor(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
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Please send me an Equitable Accumulator(R) Advisor(SM) SAI dated May 1, 2002.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
(SAI 9AMLF (5/02))
Equitable Accumulator(R)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
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WHAT IS THE EQUITABLE ACCUMULATOR(R)?
Equitable Accumulator(R) is a deferred annuity contract issued by The Equitable
Life Assurance Society of the United States. It provides for the accumulation
of retirement savings and for income. The contract offers income and death
benefit protection. It also offers a number of payout options. You invest to
accumulate value on a tax-deferred basis in one or more of our variable
investment options, fixed maturity options, or the account for special dollar
cost averaging ("investment options"). This contract may not currently be
available in all states.
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VARIABLE INVESTMENT OPTIONS
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o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager(2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
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* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S.
Equity and the EQ/Alliance Small Cap Growth investment options (the
"surviving options"), respectively, on or about July 12, 2002. After the
merger, the replaced options will no longer be available and any
allocation elections to either of them will be considered as allocation
elections to the applicable surviving option. We will notify you if the
replacements do not take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 45 and
Separate Account No. 49. Each variable investment option, in turn, invests in a
corresponding securities portfolio of EQ Advisors Trust or AXA Premier VIP
Trust (the "Trusts"). Your investment results in a variable investment option
will depend on the investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account pays fixed interest at
guaranteed rates.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA or Roth IRA.
We offer two versions of the traditional IRA: "Rollover IRA" and "Flexible
Premium IRA." We also offer two versions of the Roth IRA: "Roth Conversion IRA"
and "Flexible Premium Roth IRA."
o An annuity that is an investment vehicle for a qualified defined contribution
or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $5,000 is required to purchase an NQ, Rollover IRA,
Roth Conversion IRA, QP or Rollover TSA contract. For Flexible Premium IRA or
Flexible Premium Roth IRA contracts, we require a contribution of $2,000 to
purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
The SEC has not approved or disapproved these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense. The contracts are not insured by the FDIC or any other
agency. They are not deposits or other obligations of any bank and are not bank
guaranteed. They are subject to investment risks and possible loss of
principal.
X00274
2000 Portfolio
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) at a glance -- key features 8
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FEE TABLE 11
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Examples 14
Condensed Financial Information 15
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1. CONTRACT FEATURES AND BENEFITS 16
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How you can purchase and contribute to your contract 16
Owner and annuitant requirements 20
How you can make your contributions 20
What are your investment options under the contract? 20
Allocating your contributions 24
Your benefit base 26
Annuity purchase factors 26
Our baseBUILDER option 26
Guaranteed minimum death benefit 27
Your right to cancel within a certain number of days 28
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2. DETERMINING YOUR CONTRACT'S VALUE 30
- --------------------------------------------------------------------------------
Your account value and cash value 30
Your contract's value in the variable investment options 30
Your contract's value in the fixed maturity options 30
Your contract's value in the account for special dollar
cost averaging 30
- ----------------------
"We," "our," and "us" refer to Equitable Life.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
2 Contents of this prospectus
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3. TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 31
- --------------------------------------------------------------------------------
Transferring your account value 31
Disruptive transfer activity 31
Rebalancing your account value 31
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 32
- --------------------------------------------------------------------------------
Withdrawing your account value 32
How withdrawals are taken from your account value 33
How withdrawals affect your guaranteed minimum income benefit
and guaranteed minimum death benefit 33
Loans under Rollover TSA contracts 33
Surrendering your contract to receive its cash value 34
When to expect payments 34
Your annuity payout options 34
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5. CHARGES AND EXPENSES 37
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Charges that Equitable Life deducts 37
Charges that the Trusts deduct 39
Group or sponsored arrangements 39
Other distribution arrangements 39
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6. PAYMENT OF DEATH BENEFIT 40
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Your beneficiary and payment of benefit 40
How death benefit payment is made 40
Beneficiary continuation option 41
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7. TAX INFORMATION 42
- --------------------------------------------------------------------------------
Overview 42
Buying a contract to fund a retirement arrangement 42
Transfers among investment options 42
Taxation of nonqualified annuities 42
Individual retirement arrangements (IRAs) 44
Special rules for contracts funding qualified plans 45
Tax-Sheltered Annuity contracts (TSAs) 45
Federal and state income tax withholding and
information reporting 46
Impact of taxes to Equitable Life 47
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8. MORE INFORMATION 48
- --------------------------------------------------------------------------------
About Separate Account No. 45 and Separate Account No. 49 48
About the Trusts 48
About our fixed maturity options 48
About the general account 49
About other methods of payment 50
Dates and prices at which contract events occur 50
About your voting rights 50
About legal proceedings 51
About our independent accountants 51
Financial statements 51
Transfers of ownership, collateral assignments, loans
and borrowing 51
Distribution of the contracts 51
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9. INVESTMENT PERFORMANCE 53
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Communicating performance data 56
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10. INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE 57
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APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
Page
account for special dollar cost averaging 24
account value 30
annuitant 16
annuity payout options 34
baseBUILDER 26
beneficiary 40
benefit base 26
business day 50
cash value 30
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 44
regular contributions 44
rollover and direct transfers 45
conversion contributions 45
contributions to traditional IRAs 44
regular contributions 44
rollovers and transfers 45
disruptive transfer activity 31
EQAccess 6
ERISA 33
fixed maturity options 24
Flexible Premium IRA cover
Flexible Premium Roth IRA cover
guaranteed minimum death benefit 27
guaranteed minimum income benefit 26
Page
IRA cover
IRS 42
investment options 20
loan reserve account 34
market adjusted amount 24
market value adjustment 24
market timing 31
maturity value 24
NQ cover
participant 20
portfolio cover
processing office 6
QP cover
rate to maturity 24
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 44
SAI cover
SEC cover
TOPS 6
TSA cover
traditional IRA 44
Trusts cover
unit 30
variable investment options 20
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract.
- --------------------------------------------------------------------------------
Prospectus Contract or Supplemental Materials
- --------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed
Interest Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
- --------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481 .0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
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FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R)
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R)
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
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REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA or Flexible
Premium Roth IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA
contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals and;
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners, all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) at a glance -- key features
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PROFESSIONAL INVESTMENT Equitable Accumulator(R)'s variable investment options invest in different portfolios managed by
MANAGEMENT professional investment advisers.
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY OPTIONS o 10 fixed maturity options ("FMOs") with maturities ranging from approximately 1 to 10 years
(subject to availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
-------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any value
that you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
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ACCOUNT FOR SPECIAL DOLLAR Available for dollar cost averaging all or a portion of any eligible contribution to your contract.
COST AVERAGING
- ------------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
-------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), Tax Sheltered
Annuity (TSA) or to fund an employer retirement plan (QP or Qualified Plan), you should be aware that
such annuities do not provide tax deferral benefits beyond those already provided by the Internal
Revenue Code. Before purchasing one of these annuities, you should consider whether its features and
benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative
features, benefits and costs of these annuities compared with any other investment that you may use in
connection with your retirement plan or arrangement. (For more information, see "Tax information,"
later in this Prospectus and in the SAI.)
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BASEBUILDER(R) PROTECTION baseBUILDER combines a guaranteed minimum income benefit with a guaranteed minimum death benefit
provided under the contract. The guaranteed minimum income benefit provides income protection for you
while the annuitant lives. The guaranteed minimum death benefit provides a death benefit for the
beneficiary should the annuitant die.
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CONTRIBUTION AMOUNTS o NQ, Rollover IRA, Roth Conversion IRA, QP and Rollover TSA contracts
o Initial minimum: $5,000
o Additional minimum: $1,000
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
o Flexible Premium IRA and Flexible Premium Roth IRA contracts
o Initial minimum: $2,000
o Additional minimum: $50
Maximum contribution limitations may apply.
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8 Equitable Accumulator(R) at a glance -- key features
- ------------------------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract. You may also
incur income tax and a tax penalty.
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PAYOUT ALTERNATIVE o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBuilder
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness or confinement to a nursing home
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
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FEES AND CHARGES o Daily charges on amounts invested in variable investment options for mortality and expense risks and
administrative charges at a current annual rate of 1.55%.
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout or the contract date anniversary after the annuitant
reaches age 85, whichever occurs first. The benefit base is described under "Your benefit base" in
"Contract features and benefits" later in this Prospectus. If you do not elect baseBUILDER, you still
receive a guaranteed minimum death benefit under your contract at no additional charge.
o Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, if your account value at the end of the
contract year is less than $25,000, we deduct an annual administrative charge equal to $30 or during the
first two contract years 2% of your account value, if less. If your account value is $25,000 or more, we
will not deduct the charge.
o Annual 0.20% Protection Plus charge for this optional death benefit.
o No sales charge deducted at the time you make contributions. During the first seven contract years
following a contribution, a charge will be deducted from amounts that you withdraw that exceed 15% of your
account value. We use the account value on the most recent contract date anniversary to calculate the 15%
amount available. The charge begins at 7% in the first contract year following a contribution. It declines
by 1% each year to 1% in the seventh contract year. There is no withdrawal charge in the eighth and later
contract years following a contribution.
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The "contract date" is the effective date of a contract. This usually is the business day we receive the
properly completed and signed application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The end of each 12-month period
is your "contract date anniversary."
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o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. This charge is generally deducted from the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to purchase the Variable Immediate
Annuity payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net assets
invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses.
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Equitable Accumulator(R) at a glance -- key features 9
- ------------------------------------------------------------------------------------------------------------------------------------
Annuitant issue ages NQ: 0-90
Rollover IRA, Roth Conversion IRA, Flexible Premium Roth IRA and Rollover TSA: 20-90
Flexible Premium IRA: 20-70
QP: 20-75
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
10 Equitable Accumulator(R) at a glance -- key features
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this Prospectus.
The fixed maturity options and the account for special dollar cost averaging
are not covered by the fee table and examples. However, the annual
administrative charge and the withdrawal charge do apply to the fixed maturity
options and the account for special dollar cost averaging. A market value
adjustment (up or down) may apply as a result of a withdrawal, transfer or
surrender of amounts from a fixed maturity option.
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%
Administrative 0.25%
Distribution 0.20%
----
Total annual expenses 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA CONTRACTS ONLY:
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary is less than
$25,000(2) $30
If your account value on a contract date anniversary is $25,000
or more $0
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions (deducted if you Contract
surrender your contract or make certain withdrawals. The withdrawal year
charge percentage we use is determined by the contract year in which 1 ................................. 7.00%
you make the withdrawal or surrender your contract. For each contri- 2 ................................. 6.00%
bution, we consider the contract year in which we receive that 3 ................................. 5.00%
contribution to be "contract year 1")(3) 4 ................................. 4.00%
5 ................................. 3.00%
6 ................................. 2.00%
7 ................................. 1.00%
8+ ................................ 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- ------------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER BENEFIT CHARGE (calculated as a percentage of the
benefit base. Deducted annually on each contract date anniversary)(4) 0.30%
- ------------------------------------------------------------------------------------------------------------------------------------
PROTECTION PLUS BENEFIT CHARGE (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary) 0.20%
- ------------------------------------------------------------------------------------------------------------------------------------
Fee table 11
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- ------------------------------------------------------------------------------------------------------------------------------------
NET
TOTAL ANNUAL
MANAGEMENT FEES OTHER EXPENSES EXPENSES (AFTER
(AFTER EXPENSE (AFTER EXPENSE EXPENSE
PORTFOLIO NAME LIMITATION)(5) 12B-1 FEES(6) LIMITATION)(7) LIMITATION)(8)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- ------------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(3) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount and upon surrender of a contract.
12 Fee table
(4) This charge is for providing a guaranteed minimum income benefit in
combination with the guaranteed minimum death benefit available under the
contract. The benefit base is described under "Your benefit base" in
"Contract features and benefits" later in this Prospectus.
(5) The management fees for each Portfolio cannot be increased without a vote
of that Portfolio's shareholders. See footnote (8) for any expense
limitation agreement information.
(6) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(7) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Also, initial seed capital was invested for the
Portfolios of the AXA Premier VIP Trust on December 31, 2001, thus, "Other
Expenses" shown are estimated. See footnote (8) for any expense limitation
agreement information.
(8) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- --------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- --------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- --------------------------------------------------------------------------------
Fee table 13
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected baseBUILDER with a 5% roll up to age 80 or annual ratchet to age 80
guaranteed minimum death benefit and Protection Plus) would pay in the
situations illustrated. We assume that a $1,000 contribution is invested in one
of the variable investment options listed and a 5% annual return is earned on
the assets in that option.(1) The annual administrative charge is based on the
charges that apply to a mix of estimated contract sizes, resulting in an
estimated administrative charge for the purpose of these examples of $0.006 per
$1,000. Since the annual administrative charge and the Protection Plus feature
only apply under certain contracts, expenses would be lower for contracts that
do not have such charges or features.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the examples.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the example is not an
estimate or guarantee of future investment performance.
- ------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 99.41 $ 146.22 $ 195.80 $ 352.56
AXA Premier VIP Health Care $ 108.86 $ 173.96 $ 240.94 $ 436.87
AXA Premier VIP International Equity $ 108.33 $ 172.43 $ 238.48 $ 432.39
AXA Premier VIP Large Cap Core Equity $ 103.61 $ 158.62 $ 216.08 $ 391.01
AXA Premier VIP Large Cap Growth $ 103.61 $ 158.62 $ 216.08 $ 391.01
AXA Premier VIP Large Cap Value $ 103.61 $ 158.62 $ 216.08 $ 391.01
AXA Premier VIP Small/Mid Cap Growth $ 106.23 $ 166.31 $ 228.58 $ 414.24
AXA Premier VIP Small/Mid Cap Value $ 106.23 $ 166.31 $ 228.58 $ 414.24
AXA Premier VIP Technology $ 108.86 $ 173.96 $ 240.94 $ 436.87
EQ/Aggressive Stock $ 99.30 $ 145.91 $ 195.29 $ 351.58
EQ/Alliance Common Stock $ 97.62 $ 140.92 $ 187.07 $ 335.73
EQ/Alliance Global $ 100.98 $ 150.88 $ 203.45 $ 367.16
EQ/Alliance Growth and Income $ 98.67 $ 144.04 $ 192.21 $ 345.67
EQ/Alliance Growth Investors $ 98.67 $ 144.04 $ 192.21 $ 345.67
EQ/Alliance Intermediate Government Securities $ 98.57 $ 143.73 $ 191.70 $ 344.68
EQ/Alliance International $ 103.61 $ 158.62 $ 216.08 $ 391.01
EQ/Alliance Money Market $ 96.26 $ 136.86 $ 180.35 $ 322.66
EQ/Alliance Premier Growth $ 101.51 $ 152.43 $ 205.98 $ 371.98
EQ/Alliance Quality Bond $ 98.36 $ 143.11 $ 190.67 $ 342.70
EQ/Alliance Small Cap Growth $ 100.56 $ 149.64 $ 201.41 $ 363.29
EQ/Alliance Technology $ 101.51 $ 152.43 $ 205.98 $ 371.98
EQ/AXP New Dimensions $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/AXP Strategy Aggressive $ 99.93 $ 147.78 $ 198.35 $ 357.45
EQ/Balanced $ 98.88 $ 144.67 $ 193.24 $ 347.64
EQ/Bernstein Diversified Value $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/Calvert Socially Responsible $ 100.46 $ 149.33 $ 200.90 $ 362.32
EQ/Capital Guardian International $ 102.03 $ 153.98 $ 208.52 $ 376.77
EQ/Capital Guardian Research $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/Capital Guardian U.S. Equity $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/Emerging Markets Equity $ 108.33 $ 172.43 $ 238.48 $ 432.39
EQ/Equity 500 Index $ 95.31 $ 134.04 $ 175.68 $ 313.52
EQ/Evergreen Omega $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/FI Mid Cap $ 99.93 $ 147.78 $ 198.35 $ 357.45
EQ/FI Small/Mid Cap Value $ 100.98 $ 150.88 $ 203.45 $ 367.16
EQ/High Yield $ 99.09 $ 145.29 $ 194.26 $ 349.61
EQ/International Equity Index $ 100.98 $ 150.88 $ 203.45 $ 367.16
EQ/J.P. Morgan Core Bond $ 97.83 $ 141.55 $ 188.10 $ 337.73
EQ/Janus Large Cap Growth $ 101.51 $ 152.43 $ 205.98 $ 371.98
EQ/Lazard Small Cap Value $ 100.98 $ 150.88 $ 203.45 $ 367.16
EQ/Marsico Focus $ 101.51 $ 152.43 $ 205.98 $ 371.98
EQ/Mercury Basic Value Equity $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/MFS Emerging Growth Companies $ 99.62 $ 146.85 $ 196.82 $ 354.52
EQ/MFS Investors Trust $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/MFS Research $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/Putnam Growth & Income Value $ 99.41 $ 146.22 $ 195.80 $ 352.56
EQ/Putnam International Equity $ 102.56 $ 155.53 $ 211.04 $ 381.54
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
-----------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 29.41 $ 96.22 $ 165.80 $ 352.56
AXA Premier VIP Health Care $ 38.86 $ 123.96 $ 210.94 $ 436.87
AXA Premier VIP International Equity $ 38.33 $ 122.43 $ 208.48 $ 432.39
AXA Premier VIP Large Cap Core Equity $ 33.61 $ 108.62 $ 186.08 $ 391.01
AXA Premier VIP Large Cap Growth $ 33.61 $ 108.62 $ 186.08 $ 391.01
AXA Premier VIP Large Cap Value $ 33.61 $ 108.62 $ 186.08 $ 391.01
AXA Premier VIP Small/Mid Cap Growth $ 36.23 $ 116.31 $ 198.58 $ 414.24
AXA Premier VIP Small/Mid Cap Value $ 36.23 $ 116.31 $ 198.58 $ 414.24
AXA Premier VIP Technology $ 38.86 $ 123.96 $ 210.94 $ 436.87
EQ/Aggressive Stock $ 29.30 $ 95.91 $ 165.29 $ 351.58
EQ/Alliance Common Stock $ 27.62 $ 90.92 $ 157.07 $ 335.73
EQ/Alliance Global $ 30.98 $ 100.88 $ 173.45 $ 367.16
EQ/Alliance Growth and Income $ 28.67 $ 94.04 $ 162.21 $ 345.67
EQ/Alliance Growth Investors $ 28.67 $ 94.04 $ 162.21 $ 345.67
EQ/Alliance Intermediate Government Securities $ 28.57 $ 93.73 $ 161.70 $ 344.68
EQ/Alliance International $ 33.61 $ 108.62 $ 186.08 $ 391.01
EQ/Alliance Money Market $ 26.26 $ 86.86 $ 150.35 $ 322.66
EQ/Alliance Premier Growth $ 31.51 $ 102.43 $ 175.98 $ 371.98
EQ/Alliance Quality Bond $ 28.36 $ 93.11 $ 160.67 $ 342.70
EQ/Alliance Small Cap Growth $ 30.56 $ 99.64 $ 171.41 $ 363.29
EQ/Alliance Technology $ 31.51 $ 102.43 $ 175.98 $ 371.98
EQ/AXP New Dimensions $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/AXP Strategy Aggressive $ 29.93 $ 97.78 $ 168.35 $ 357.45
EQ/Balanced $ 28.88 $ 94.67 $ 163.24 $ 347.64
EQ/Bernstein Diversified Value $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/Calvert Socially Responsible $ 30.46 $ 99.33 $ 170.90 $ 362.32
EQ/Capital Guardian International $ 32.03 $ 103.98 $ 178.52 $ 376.77
EQ/Capital Guardian Research $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/Capital Guardian U.S. Equity $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/Emerging Markets Equity $ 38.33 $ 122.43 $ 208.48 $ 432.39
EQ/Equity 500 Index $ 25.31 $ 84.04 $ 145.68 $ 313.52
EQ/Evergreen Omega $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/FI Mid Cap $ 29.93 $ 97.78 $ 168.35 $ 357.45
EQ/FI Small/Mid Cap Value $ 30.98 $ 100.88 $ 173.45 $ 367.16
EQ/High Yield $ 29.09 $ 95.29 $ 164.26 $ 349.61
EQ/International Equity Index $ 30.98 $ 100.88 $ 173.45 $ 367.16
EQ/J.P. Morgan Core Bond $ 27.83 $ 91.55 $ 158.10 $ 337.73
EQ/Janus Large Cap Growth $ 31.51 $ 102.43 $ 175.98 $ 371.98
EQ/Lazard Small Cap Value $ 30.98 $ 100.88 $ 173.45 $ 367.16
EQ/Marsico Focus $ 31.51 $ 102.43 $ 175.98 $ 371.98
EQ/Mercury Basic Value Equity $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/MFS Emerging Growth Companies $ 29.62 $ 96.85 $ 166.82 $ 354.52
EQ/MFS Investors Trust $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/MFS Research $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/Putnam Growth & Income Value $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/Putnam International Equity $ 32.56 $ 105.53 $ 181.04 $ 381.54
- ------------------------------------------------------------------------------------------------
14 Fee table
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES THE END OF EACH PERIOD SHOWN, THE
WOULD BE: EXPENSES WOULD BE:
-------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager $ 99.41 $ 146.22 $ 195.80 $ 352.56 $ 29.41 $ 96.22 $ 165.80 $ 352.56
EQ/Small Company Index $ 98.36 $ 143.11 $ 190.67 $ 342.70 $ 28.36 $ 93.11 $ 160.67 $ 342.70
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money" later
in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $5.44 based on the average amount applied to annuity payout
options in 2001. See "Annuity administrative fee" in "Charges and expenses"
later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
Fee table 15
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount for each type of
contract purchased. The following table summarizes our rules regarding
contributions to your contract. All ages in the table refer to the age of the
annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
FOR ANNUITANT MINIMUM
CONTRACT TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS LIMITATIONS ON CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
NQ
o through 90 o $5,000 (initial) o After-tax money. o For annuitants up to age 83
at contract issue, additional
o through 85 in New York o $1,000 (additional) o Paid to us by check or contributions may be made
and Pennsylvania transfer of contract value in up to age 84.
a tax-deferred exchange
under Section 1035 of the o For annuitants age 84 and
Internal Revenue Code. older at contract issue
additional contributions may
be made up to one year
beyond the annuitant's issue
age.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover IRA
20 through 90 o $5,000 (initial) o Eligible rollover distribu- o For annuitants up to age 83
tions from TSA contracts or at contract issue, additional
20 through 85 in New York o $1,000 (additional) other 403(b) arrangements, contributions may be made
and Pennsylvania qualified plans, and govern- up to age 84.
mental EDC plans.
o For annuitants age 84 and
o Rollovers from another older at contract issue addi-
traditional individual tional contributions may be
retirement ment arrangement. made up to one year beyond
your issue age.
o Direct custodian-to-
custodian transfers from o Contributions after age 70-1/2
another traditional indi- must be net of required
vidual retirement minimum distributions.
arrangement.
o Although we accept regular
o Regular IRA contributions. IRA contributions (limited to
$3,000 for the calendar year
o For the calendar year 2002 2002) under rollover IRA
and later, additional contracts, we intend that
"catuch-up" contributions. this contract be used prima-
rily for rollover and direct
transfer contributions.
o Additional catch-up contri-
butions totalling up to $500
can be made for the calen-
dar year 2002 where the
owner is at least age 50 but
under age 70-1/2 at any time
during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
16 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
FOR ANNUITANT MINIMUM
CONTRACT TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS LIMITATIONS ON CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion
IRA 20 through 90 o $5,000 (initial) o Rollovers from another o For annuitants up to age 83
Roth IRA. at contract issue, additional
20 through 85 in New York o $1,000 (additional) contributions may be made
and Pennsylvania o Conversion rollovers from a up to age 84.
traditional IRA.
o For annuitants age 84 and
o Direct transfers from older at contract issue addi-
another Roth IRA. tional contributions may be
made up to one year beyond
o Regular Roth IRA your issue age.
contributions.
o Conversion rollovers after
o For the calendar year 2002 age 70-1/2 must be net of
and later, additional required minimum distribu-
catch-up contributions. tions for the traditional IRA
you are rolling over.
o You cannot roll over funds
from a traditional IRA if your
adjusted gross income is
$100,000 or more.
o Although we accept regular
Roth IRA contributions (lim-
ited to $3,000 for the
calendar year 2002) under
Roth IRA contracts, we
intend that this contract be
used primarily for rollover
and direct transfer
contributions.
o Additional catch-up contri-
butions totalling up to $500
can be made for the calen-
dar year 2002 where the
owner is at least age 50 at
any time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA
20 through 90 o $5,000 (initial) o Direct transfers of pretax o For annuitants up to age 83
funds from another contract at contract issue, additional
20 through 85 in New York o $1,000 (additional) or arrangement under Sec- contributions may be made
and Pennsylvania tion 403(b) of the Internal up to age 84.
Revenue Code, complying
with IRS Revenue Ruling o For annuitants age 84 and
90-24. older at contract issue addi-
tional contributions may be
o Eligible rollover distribu- made up to one year beyond
tions from other 403(b) your issue age.
plans, qualified plans, gov-
ernmental EDC plans and o Rollover or direct transfer
Traditional IRAs. contributions after age 70-1/2
must be net of any required
minimum distributions.
o Employer-remitted contribu-
tions are not permitted.
This contract may not be available in your state.
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Contract features and benefits 17
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AVAILABLE
FOR ANNUITANT MINIMUM
CONTRACT TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS LIMITATIONS ON CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
QP
20 through 75 o $5,000 (initial) o Only transfer contributions o Regular ongoing payroll
from an existing qualified contributions are not
o $1,000 (additional) plan trust as a change of permitted.
investment vehicle under
the plan. o Only one additional transfer
contribution may be made
o The plan must be qualified during a contract year.
under Section 401(a) of the
Internal Revenue Code. o No additional transfer con-
tributions after age 76.
o For 401(k) plans, trans-
ferred contributions may o For defined benefit plans,
only include employee pre- employee contributions are
tax contributions. not permitted and will not
accept contributions that
fund more than 80% of the
actuarial value of the plan
participant/employee's nor-
mal retirement benefit.
o Contributions after age 70-1/2
must be net of any required
minimum distributions.
See Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
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Flexible Premium
IRA 20 through 70 o $2,000 (initial) o Regular traditional IRA o No regular IRA contributions
contributions. in the calendar year you turn
o $50 (additional age 70-1/2 and thereafter.
after the first o For the calendar year 2002
contract year) and later, additional o Total regular contributions
catch-up contributions. may not exceed $3,000 for
the calendar year 2002.
o Eligible rollover distribu-
tions from TSA contracts or o Rollover and direct transfer
other 403(b) arrangements, contributions after age 70-1/2
qualified plans, and govern- must be net of required
mental EDC plans. minimum distributions.
o Rollovers from another o Although we accept rollover
traditional individual and direct transfer contribu-
retirement arrangement. tions under the Flexible
Premium IRA contract, we
o Direct custodian- intend that this contract be
to-custodian transfers from used for ongoing regular
another traditional indi- contributions.
vidual retirement
arrangement. o Additional catch-up contri-
butions totalling up to $500
can be made for the calen-
dar year 2002 where the
owner is at least age 50 but
under age 70-1/2 at any time
during 2002.
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18 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
FOR ANNUITANT MINIMUM
CONTRACT TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS LIMITATIONS ON CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Flexible Premium
Roth IRA 20 through 90 o $2,000 (initial) o Regular after-tax o For annuitants up to age 83
contributions. at contract issue, additional
20 through 85 in New York o $50 (additional contributions may be made
and Pennsylvania after the first o For the calendar year 2002 up to age 84.
contract year) and later, additional
catch-up contributions. o For annuitants age 84 and
older at contract issue addi-
o Rollovers from another tional contributions may be
Roth IRA. made up to one year beyond
your issue age.
o Conversion rollovers from a
traditional IRA. o Total regular contributions
may not exceed $3,000 for
o Direct transfers from the calendar year 2002.
another Roth IRA.
o Contributions are subject to
income limits and other tax
rules.
o Although we accept rollover
and direct transfer contribu-
tions under the Flexible
Premium Roth IRA contract,
we intend that this contract
be used for ongoing regular
Roth IRA contributions.
o Additional catch-up contri-
butions totalling up to $500
can be made for the calen-
dar year 2002 where the
owner is at least age 50 at
any time during 2002.
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See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) contracts with the same
annuitant would then total more than $1,500,000. We reserve the right to limit
aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
Contract features and benefits 19
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the fixed maturity
options and the account for special dollar cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options and the fixed
maturity options.
- --------------------------------------------------------------------------------
20 Contract features and benefits
PORTFOLIOS OF THE TRUSTS
You should note that some portfolios have objectives and strategies that are substantially similar to those of certain funds that
are purchased directly rather than under a variable insurance product such as the Accumulator(R) contract. These portfolios may even
have the same manager(s) and/or a similar name. However, there are numerous factors that can contribute to differences in
performance between two investments, particularly over short periods of time. Such factors include the timing of stock purchases and
sales; differences in fund cash flows; and specific strategies employed by the portfolio manager.
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AXA PREMIER VIP TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
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AXA Premier VIP Core Bond* Seeks a balance of a high current income and capital BlackRock Advisors, Inc.
appreciation consistent with a prudent level of risk Pacific Investment Management Company LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P. through
Equity* its Bernstein Investment Research and
Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
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AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P. through
Equity* its Bernstein Investment Research and
Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital Management L.P.
Institutional Capital Corporation
MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management, LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
Marsico Capital Management LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of capital and Alliance Capital Management L.P.
increased income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 21
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent Alliance Capital Management L.P.
with the Adviser's determination of reasonable risk
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income consistent with Alliance Capital Management L.P.
Government Securities* relative stability of principal
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P.
(including through its Bernstein
Investment Research and Management Unit)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current income, Alliance Capital Management L.P.
preserve its assets and maintain liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income consistent with Alliance Capital Management L.P.
moderate risk of capital
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Current income is Alliance Capital Management L.P.
incidental to the Portfolio's objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through both Alliance Capital Management L.P.
appreciation of capital and current income Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment Research
and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses that approximates Alliance Capital Management L.P.
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level consis-
tent with that of the S&P 500 Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management Company,
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return through a Alliance Capital Management L.P.
combination of current income and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
22 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod- J.P. Morgan Investment Management, Inc.
erate risk of capital and maintenance of liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of capital Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth MFS Investment Management
Companies
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary MFS Investment Management
objective to seek reasonable current income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of capital and future MFS Investment Management
income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary Putnam Investment Management, LLC
Value objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and any increased Putnam Investment Management, LLC
income that results from this growth
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EQ/Small Company Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the Russell
2000 Index
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* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
Contract features and benefits 23
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in all states. Check with your financial professional to see if
fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options generally range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
Prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2003 through
2012. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the next
available fixed maturity option with the earliest maturity date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract, or when we make deductions for charges) from a
fixed maturity option before it matures we will make a market value adjustment,
which will increase or decrease any fixed maturity amount you have in that
fixed maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general account.
We pay interest at guaranteed rates in this account. We will credit interest to
the amounts that you have in the account for special dollar cost averaging
every day. We set the interest rates periodically, according to procedures that
we have. We reserve the right to change these procedures.
We guarantee to pay our current interest rate that is in effect on the date
that your contribution is allocated to this account. Your guaranteed interest
rate for the time period you select will be shown in your contract for an
initial contribution. The rate will never be less than 3%. See "Allocating your
contributions" below for rules and restrictions that apply to the special
dollar cost averaging program.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance or dollar cost averaging.
24 Contract features and benefits
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on February 15, 2002
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $5,802.87 to that fixed maturity option and the balance to your
choice of variable investment options. On the maturity date your value in the
fixed maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA,
Flexible Premium IRA, QP or Rollover TSA contract, before you select a maturity
year that would extend beyond the year in which you will reach age 70-1/2, you
should consider whether your value in the variable investment options, or your
other traditional IRA or TSA funds are sufficient to meet your required minimum
distributions. See "Tax information" later in this Prospectus and in the SAI.
Please check with your financial professional if the principal assurance
allocation feature is available in your state. Also, you may not elect
principal assurance if the special dollar cost averaging program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually allocate amounts to the
variable investment options by periodically transferring approximately the same
dollar amount to the variable investment options you select. This will cause
you to purchase more units if the unit value is low and fewer units if the unit
value is high. Therefore, you may get a lower average cost per unit over the
long term. These plans of investing, however, do not guarantee that you will
earn a profit or be protected against losses. You may not make transfers to the
fixed maturity options.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
SPECIAL DOLLAR COST AVERAGING PROGRAM. Subject to state availability, under the
special dollar cost averaging program, you may choose to allocate all or a
portion of any eligible contribution to the account for special dollar cost
averaging. You may elect to participate in the special dollar cost averaging
program at any time subject to the age limitation on contributions described in
Section 1 of this prospectus. Contributions into the account for special dollar
cost averaging may not be transfers from other investment options. Your initial
allocation to any special dollar cost averaging program time period must be at
least $2,000 and any subsequent contribution to that same time period must be
at least $250. You may only have one time period in effect at any time and once
you select a time period, you may not change it. In Pennsylvania, we refer to
this program as "enhanced rate dollar cost averaging."
You may have your account value transferred to any of the variable investment
options. We will transfer amounts from the account for special dollar cost
averaging into the variable investment options over an available time period
that you select. We offer time periods of 6, 12, or 18 months. We may also
offer other time periods. Your financial professional can provide information
on the time periods and interest rates currently available in your state, or
you may contact our processing office. If the special dollar cost averaging
program is selected at the time of application to purchase the Accumulator(R)
contract, a 90 day rate lock will apply from the date of application. Any
contribution(s) received during this 90 day period will be credited with the
interest rate offered on the date of application for the remainder of time
period selected at application. Any contribution(s) received after the 90 day
rate lock period has ended will be credited with the then current interest rate
for the remainder of the time period selected at application. Contribution(s)
made to a special dollar cost averaging program selected after the
Accumulator(R) contract has been issued will be credited with the then current
interest rate on the date the contribution is received by Equitable for the
time period initially selected by you. Once the time period you selected has
run, you may then select another time period for future contributions. At that
time, you may also select a different allocation for transfers to the variable
investment options, or, if you wish, we will continue to use the selection that
you have previously made. Currently, your account value will be transferred
from the account for special dollar cost averaging into the variable investment
options on a monthly basis. We may offer this program in the future with
transfers on a different basis.
We will transfer all amounts out of the account for special dollar cost
averaging by the end of the chosen time period. The transfer date will be the
same day of the month as the contract date, but not later than the 28th day of
the month. For a special dollar cost averaging program selected after
application, the first transfer date and each subsequent transfer date for the
time period selected will be one month from the date the first contribution is
made into the special dollar cost averaging program, but not later than the
28th of the month.
If you choose to allocate only a portion of an eligible contribution to the
account for special dollar cost averaging, the remaining balance of that
contribution will be allocated to the variable investment options or fixed
maturity options according to your instructions.
The only amounts that should be transferred from the account for special dollar
cost averaging are your regularly scheduled transfers to the variable
investment options. If you request to transfer or withdraw any
Contract features and benefits 25
other amounts from the account for special dollar averaging, we will transfer
all of the value that you have remaining in the account for special dollar cost
averaging to the investment options according to the allocation percentages we
have on file for you. You may ask us to cancel your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options. You can select to have
transfers made on a monthly, quarterly, or annual basis. The transfer date will
be the same calendar day of the month as the contract date, but not later than
the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the
EQ/Alliance Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------
You may not elect general dollar cost averaging or special dollar cost
averaging if you are participating in the rebalancing program. See "Transfers
among investment options" later in this Prospectus. You may not elect the
special dollar cost averaging program if the principal assurance program is in
effect.
YOUR BENEFIT BASE
The benefit base is used to calculate both the guaranteed minimum income
benefit and the 5% (3% in Washington) roll up to age 80 guaranteed minimum
death benefit. Your benefit base is not an account value or a cash value. See
"Our baseBUILDER option" and "Guaranteed minimum death benefit" below. The
benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money" later in this Prospectus); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit.
The effective annual interest rate credited to the benefit base is:
o 5% (3% in Washington for purposes of calculating the guaranteed minimum death
benefit only) for the benefit base with respect to the variable investment
options (other than the AXA Premier VIP Core Bond, EQ/Alliance
Intermediate Government Securities, EQ/Alliance Money Market and
EQ/Alliance Quality Bond options) and the account for special dollar cost
averaging; and
o 3% for the benefit base with respect to the AXA Premier VIP Core Bond,
EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market
and EQ/Alliance Quality Bond options, the fixed maturity options and the
loan reserve account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract date anniversary
following the annuitant's 80th birthday.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed under "Our
baseBUILDER option" and annuity payout options are discussed under "Your
annuity payout options" in "Accessing your money" later in this Prospectus. The
guaranteed annuity purchase factors are those factors specified in your
contract. The current annuity purchase factors are those factors that are in
effect at any given time. Annuity purchase factors are based on interest rates,
mortality tables, frequency of payments, the form of annuity benefit and the
annuitant's (and any joint annuitant's) age and sex in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses" later in this Prospectus.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option subject to state
availability. For contracts issued in Washington, the income manager payout
feature is not available. You choose which of these payout options you want and
whether you want the option to be paid on a single or joint life basis at the
time you exercise your guaranteed minimum income benefit. The maximum period
certain available under the Income Manager payout option is 10 years. This
period may be shorter, depending on the annuitant's age when you exercise your
guaranteed minimum income benefit and the type of contract you own. We may also
make other forms of payout options available. For a description of payout
options, see "Your annuity payout options" in "Accessing your money" later in
this Prospectus.
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The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity pay-
26 Contract features and benefits
out option will be the greater of (i) your guaranteed minimum income benefit
which is calculated by applying your benefit base less any outstanding loan
plus accrued interest (applies to Rollover TSA only) at guaranteed annuity
purchase factors or (ii) the income provided by applying your actual account
value at our then current annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the annuitant's (or joint annuitant's, if
applicable) death. There is no continuation of benefits following the
annuitant's (or joint annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below
illustrates the guaranteed minimum income benefit amounts per $100,000 of
initial contribution, for a male annuitant age 60 (at issue) on the contract
date anniversaries indicated, who has elected the life annuity fixed payout
option, using the guaranteed annuity purchase factors as of the date of this
prospectus, assuming no additional contributions, withdrawals or loans under
Rollover TSA contracts, and assuming there were no allocations to the AXA
Premier VIP Core Bond, EQ/Alliance Intermediate Government Securities,
EQ/Alliance Money Market or EQ/Alliance Quality Bond options, the fixed
maturity options or the loan reserve account.
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GUARANTEED MINIMUM
CONTRACT DATE INCOME BENEFIT -- ANNUAL
ANNIVERSARY AT EXERCISE INCOME PAYABLE FOR LIFE
- --------------------------------------------------------------------------------
10 $10,816
15 $16,132
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date
anniversary that you are eligible to exercise the guaranteed minimum income
benefit, we will send you an eligibility notice illustrating how much income
could be provided as of the contract anniversary. You may notify us within 30
days following the contract date anniversary if you want to exercise the
guaranteed minimum income benefit. You must return your contract to us in order
to exercise this benefit. The amount of income you actually receive will be
determined when we receive your request to exercise the benefit. You will begin
receiving payments one payment period after the annuity payout contract is
issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
after the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 85th birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 at the time an IRA, QP or
Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can be
exercised; and
(iv) For QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you do not elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, FLEXIBLE PREMIUM ROTH IRA AND ROLLOVER TSA CONTRACTS; 20 THROUGH 70 AT
ISSUE OF FLEXIBLE PREMIUM IRA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP
CONTRACTS.
You must elect either: the "5% (3% in Washington) roll up to age 80" or the
"annual ratchet to age 80" guaranteed minimum death benefit when you apply for
a contract. Once you have made your election, you may not change it.
Contract features and benefits 27
5% (3% IN WASHINGTON) ROLL UP TO AGE 80. This guaranteed minimum death benefit
is equal to the benefit base described earlier in "Your benefit base." This
guaranteed minimum death benefit is not available in New York.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum
death benefit to equal your account value. On the other hand, if your account
value on the contract date anniversary is less than your guaranteed minimum
death benefit, we will not adjust your guaranteed minimum death benefit either
up or down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on
the date the contribution is allocated to your investment options. If you take
a withdrawal from your contract, we will reduce your guaranteed minimum death
benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 90 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA, FLEXIBLE PREMIUM ROTH IRA AND
ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix IV at the end of this Prospectus for an example of how we
calculate the guaranteed minimum death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus for the
potential consequences of electing to purchase the Protection Plus feature in
an NQ or IRA contract.
If the annuitant is 69 or younger when we issue your contract (or if the
successor owner/annuitant is 69 or younger when he or she becomes the successor
owner/annuitant, the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
40% of the lesser of:
o the total net contributions or
o the death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including surrender charges and loans). Reduction on a pro rata basis means
that we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If the contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
If the annuitant is age 70 through 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 70 and 75 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
25% of the lesser of:
o the total net contributions (as described above) or
o the death benefit (as described above) less total net contributions
Protection Plus must be elected when the contract is first issued: neither the
owner nor the successor owner/annuitant can add it subsequently.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), (ii) any positive or negative market value
adjustments in the fixed maturity options and (iii) any guaranteed interest in
the account for special dollar cost averaging, through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i), (ii) or (iii) above). For any IRA contract
returned to us within seven days after you receive it, we are required to
refund the full amount of your contribution.
28 Contract features and benefits
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA or Flexible Premium
Roth IRA contract, you may cancel your Roth Conversion IRA or Flexible Premium
Roth IRA contract and return to a Rollover IRA or Flexible Premium IRA
contract, whichever applies. Our processing office, or your financial
professional, can provide you with the cancellation instructions.
Contract features and benefits 29
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
(iii) value in the account for special dollar cost averaging; and (iv) value
you have in the loan reserve account (applies for Rollover TSA contracts only).
These amounts are subject to certain fees and charges discussed under "Charges
and expenses" later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge
(applicable for Flexible Premium IRA and Flexible Premium Roth IRA contracts
only); (ii) any applicable withdrawal charges; and (iii) the amount of any
outstanding loan plus accrued interest (applicable to Rollover TSA contracts
only). Please see "Surrendering your contract to receive its cash value" in
"Accessing your money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option less daily charges for:
(i) mortality and expense risks;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER and/or Protection Plus benefit
charge, the number of units credited to your contract will be reduced. Your
units are also reduced under Flexible Premium IRA and Flexible Premium Roth IRA
contracts when we deduct the annual administrative charge. A description of how
unit values are calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time will
equal your contribution allocated to that option, plus interest, less the sum
of all amounts that have been transferred to the variable investment options
you have selected.
30 Determining your contract's value
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar cost
averaging.
o You may not transfer to a fixed maturity option that matures in the current
calendar year or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately
following the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually on a contract year basis).
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect we will process the
transfer as requested. The rebalancing program will remain in effect unless you
request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging or special dollar cost averaging program.
Rebalancing is not available for amounts you have allocated in the fixed
maturity options.
Transferring your money among investment options 31
4. Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
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METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------------
LIFETIME
REQUIRED
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------------
NQ Yes Yes No No
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Rollover IRA Yes Yes Yes Yes
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Flexible
Premium IRA Yes Yes Yes Yes
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Roth Conversion
IRA Yes Yes Yes No
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Flexible Premium
Roth IRA Yes Yes Yes No
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QP Yes No No Yes
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Rollover TSA* Yes Yes No Yes
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* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
later in the Prospectus.
Lump sum withdrawals will be subject to a withdrawal charge if they exceed the
15% free withdrawal amount (see "15% free withdrawal amount" in "Charges and
expenses" later in this Prospectus). Under Rollover TSA contracts, if a loan is
outstanding, you may only take lump sum withdrawals as long as the cash value
remaining after any withdrawal equals at least 10% of the outstanding loan plus
accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and all IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions.)
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, the amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the
32 Accessing your money
payments may not restart in the same contract year in which you took a lump sum
withdrawal. We will calculate the new withdrawal amount.
Substantially equal withdrawals are not subject to a withdrawal charge.
LIFETIME MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Flexible Premium IRA, QP and Rollover TSA contracts only -- See
"Tax information" later in this Prospectus and in the SAI.)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually. See the
"Required minimum distributions" section in "Tax information" later in this
Prospectus and in the SAI for your specific type of retirement arrangement.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 15% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, Flexible Premium IRA, QP and Rollover TSA contracts, we will
send a form outlining the distribution options available in the year you reach
age 70-1/2 (if you have not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first and then from the account for special dollar
cost averaging. A market value adjustment may apply to withdrawals from the
fixed maturity options. If those amounts are insufficient, we will deduct all
or a portion of the charge from the account for special dollar cost averaging.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% (3% in Washington) roll up to age 80 -- If you elect the 5% roll up to age
80 guaranteed minimum death benefit, your benefit base will be reduced on a
dollar-for-dollar basis as long as the sum of your withdrawals in a contract
year is 5% or less of the benefit base on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the benefit base on the most recent contract
date anniversary, that withdrawal and any subsequent withdrawals in that same
contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold,
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
benefit base and current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 90 -- If your contract was issued when the
annuitant was between ages 80 and 90, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000
x.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the
Accessing your money 33
federal income tax rules. The term of a loan is five years. However, if you use
the loan to acquire your primary residence, the term is 10 years. The term may
not extend beyond the earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charge) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
and the account for special dollar cost averaging (other than for death
benefits) for up to six months while you are living. We also may defer payments
for a reasonable amount of time (not to exceed 10 days) while we are waiting
for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) offers you several choices of annuity payout options.
Some enable you to receive fixed annuity payments, which can be either level or
increasing, and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if your are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under the baseBUILDER (see "Our baseBUILDER option" earlier in
this Prospectus).
- --------------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
- --------------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available in
payout options New York)
Life annuity with period certain
- --------------------------------------------------------------------------------
Income Manager payout options Life annuity with period certain
(available for annuitants age 83 Period certain annuity
or less at contract issue)
- --------------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain is the form of annuity under the contract that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
34 Accessing your money
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain and life annuity with refund
certain payout options are available on a single life or joint and survivor
life basis. The joint and survivor life annuity guarantees payments for the
rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator(R).
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) contract to an Income Manager payout annuity. In this case, we
will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) and we will deduct any applicable withdrawal charge. For the tax
consequences of withdrawals, see "Tax information" later in this Prospectus and
in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under
your Equitable Accumulator(R) is imposed if you select a period certain. If the
period certain is more than 5 years, then the withdrawal charge deducted will
not exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under
the Equitable Accumulator(R). If the withdrawal charge that otherwise would
have been applied to your account value under your Equitable Accumulator(R) is
greater than 2% of the contributions that remain in your contract at the time
you purchase your payout option, the withdrawal charges under the Income
Manager will apply. The year in which your account value is applied to the
payout option will be "contract year 1."
For contracts issued in New York where the annuitant was age 84 or 85 at
contract issue, any applicable withdrawal charge will be imposed if you select
a period certain annuity.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
Accessing your money 35
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) contract date. Except with
respect to the Income Manager annuity payout options, where payments are made
on the 15th day of each month, you can change the date your annuity payments
are to begin anytime before that date as long as you do not choose a date later
than the 28th day of any month.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
as follows:
(i) if the annuitant was not older than age 83 when the contract was issued,
the contract date anniversary that follows the annuitant's 90th birthday;
(ii) if the annuitant was age 84 but not older than age 88 when the contract
was issued the annuitant's age at issue plus seven years;
(iii) if the annuitant was age 89 or 90 when the contract was issued, age
95; and
(iv) for contracts issued in New York, by the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- --------------------------------------------------------------------------------
MAXIMUM
ISSUE AGE ANNUITIZATION AGE
- --------------------------------------------------------------------------------
0-75 85
76 86
77 87
78-80 88
81-85 90
- --------------------------------------------------------------------------------
The above may be different in some states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
36 Accessing your money
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary -- an annual administrative charge, if
applicable (Flexible Premium IRA and Flexible Premium Roth IRA contracts
only).
o At the time you make certain withdrawals or surrender your contract -- a
withdrawal charge.
o A charge for baseBUILDER, if you elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
o A charge for Protection Plus, if you elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" later in this Prospectus.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment
option. The charge, together with the annual administrative charge described
below, is to compensate us for administrative expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.20% of the net assets in each
variable investment option.
ANNUAL ADMINISTRATIVE CHARGE (FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH
IRA CONTRACTS ONLY)
Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, we deduct
an administrative charge from your account value on each contract date
anniversary. We deduct the charge if your account value on the last business
day of the contract year is less than $25,000. If your account value on such
date is $25,000 or more, we do not deduct the charge. During the first two
contract years, the charge is equal to $30 or, if less, 2% of your account
value. The charge is $30 for contract years three and later.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in order of the earliest maturity date(s) first, and then,
from the account for special dollar cost averaging. If you surrender your
contract during the contract year we will deduct a pro rata portion of the
charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
- --------------------------------------------------------------------------------
CONTRACT YEAR
- --------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- --------------------------------------------------------------------------------
Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
- --------------------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1."
Charges and expenses 37
Amounts withdrawn up to the free withdrawal amount are not considered
withdrawal of any contribution. We also treat contributions that have been
invested the longest as being withdrawn first. We treat contributions as
withdrawn before earnings for purposes of calculating the withdrawal charge.
However, federal income tax rules treat earnings under your contract as
withdrawn first. See "Tax information" later in this Prospectus and in the SAI.
Please note that you may incur a withdrawal charge if your contract was issued
in New York and your annuitant was age 84 or 85 at issue because you must
accept distribution of your cash value beginning with the contract anniversary
following the annuitant's 90th birthday.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to that
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover our sales expenses.
For annuitants that are ages 84 and 85 when the contract is issued in
Pennsylvania, the withdrawal charge will be computed in the same manner as for
other contracts, except that the withdrawal charge schedule will be different.
For these contracts, the withdrawal charge schedule will be 5% of each
contribution made in the first contract year, decreasing by 1% each subsequent
contract year to 0% in the sixth and later contract years.
The withdrawal charge does not apply in the circumstances described below.
ANNUITANT AGES 86 THROUGH 90 WHEN THE CONTRACT IS ISSUED. The withdrawal charge
does not apply under the contract if the annuitant is age 86 or older when the
contract is issued.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust:
The free withdrawal amount will equal the greater of:
(1) the current account value less contributions that have not been withdrawn
(earnings in the contract) and (2) the 15% free withdrawal amount defined
above.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
(i) The annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration; or
(ii) We receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six months or
less; or
(iii) The annuitant has been confined to a nursing home for more than 90
days (or such other period, as required in your state) as verified by a
licensed physician. A nursing home for this purpose means one that is (a)
approved by Medicare as a provider of skilled nursing care service, or (b)
licensed as a skilled nursing home by the state or territory in which it
is located (it must be within the United States, Puerto Rico, or U.S.
Virgin Islands) and meets all of the following:
- - its main function is to provide skilled, intermediate or custodial nursing
care;
- - it provides continuous room and board to three or more persons;
- - it is supervised by a registered nurse or licensed practical nurse;
- - it keeps daily medical records of each patient;
- - it controls and records all medications dispensed; and
- - its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions described in (i), (ii) and
(iii) above existed at the time a contribution was remitted or if the condition
began within 12 months of the period following remittance. Some states may not
permit us to waive the withdrawal charge in the above circumstances or may
limit the circumstances for which the withdrawal charge may be waived. Your
financial professional can provide more information or you may contact our
processing office.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches age 85, whichever occurs
first. The charge is equal to 0.30% of the benefit base in effect on the
contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in order of the earliest maturity date(s) first, and then,
from the account for special dollar cost averaging. A market value adjustment
may apply.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.20% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment options on a
pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in the order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain applicable taxes that may be
imposed on us, such as premium taxes in your state. Generally, we deduct the
charge from the amount applied to provide an
38 Charges and expenses
annuity payout option. The current tax charge that might be imposed by us
varies by state and ranges from 0% to 3.5% (the rate is 1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit and the guaranteed minimum death benefit or offer variable investment
options that invest in shares of either Trust that are not subject to the 12b-1
fee. Group arrangements include those in which a trustee or an employer, for
example, purchases contracts covering a group of individuals on a group basis.
Group arrangements are not available for IRA contracts. Sponsored arrangements
include those in which an employer allows us to sell contracts to its employees
or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
Charges and expenses 39
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you a written confirmation when we receive your request. Under jointly
owned contracts, the surviving owner is considered the beneficiary, and will
take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract, the
beneficiary must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) and any amount applicable under the Protection Plus feature, as
of the date we receive satisfactory proof of the annuitant's death, any
required instructions for the method of payment, information and forms
necessary to effect payment. The amount of the guaranteed minimum death benefit
will be the guaranteed minimum death benefit as of the date of the annuitant's
death adjusted for any subsequent withdrawals (and any associated withdrawal
charges). Under Rollover TSA contracts we will deduct the amount of any
outstanding loan plus accrued interest from the amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant, can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" later in this
Prospectus.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive the death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (new
owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will
pay any cash value five years after your death (or the death of the first
owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor owner/annuitant
feature, we will increase the account value to equal
40 Payment of death benefit
your guaranteed minimum death benefit as of the date of your death if such
death benefit is greater than such account value, plus any amount applicable
under the Protection Plus feature and adjusted for any subsequent withdrawals.
The increase in the account value will be allocated to the investment options
according to the allocation percentages we have on file for your contract.
Thereafter, withdrawal charges will no longer apply to contributions made
before your death. Withdrawal charges will apply if additional contributions
are made. These additional contributions will be considered to be withdrawn
only after all other amounts have been withdrawn. In determining whether the
guaranteed minimum death benefit will continue to grow, we will use your
surviving spouse's age (as of the date we receive satisfactory proof of your
death, any required instructions and the information and forms necessary to
effect the successor owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the guaranteed minimum
death benefit as of the date of your death, if such death benefit is greater
than such account value, plus any amount applicable under the Protection Plus
feature and adjusted for any subsequent withdrawals. The beneficiary
continuation option is available if we have received regulatory clearance in
your state. Where an IRA contract is owned in a custodial individual retirement
account, the custodian may reinvest the death benefit in an Accumulator(R)
individual retirement annuity contract, using the account beneficiary as the
annuitant. Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in
effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions
for the method of payment and the information and forms necessary to
effect payment), unless such person elects to continue the payment method
elected by the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st on the 5th calendar year after your death.
Payment of death benefit 41
7. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) contracts owned by United
States taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Rollover IRA, Flexible Premium IRA, Roth Conversion IRA, Flexible
Premium Roth IRA, QP or Rollover TSA. Therefore, we discuss the tax aspects of
each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax and withholding rules for
non-U.S. taxpayers or federal gift and estate taxes. Transfers of the contract,
rights under the contract, or payments under the contract may be subject to
gift or estate taxes. You should not rely only on this document, but should
consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became to be
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001, will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans.
In addition to increasing amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator's(R) choice of death benefits and baseBUILDER
guaranteed minimum income benefit, Special Dollar Cost Averaging, selection of
investment funds and fixed maturity options and choices of pay-out options, as
well as the features and benefits of other permissible funding vehicles and the
relative costs of annuities and other arrangements. You should be aware that
cost may vary depending on the features and benefits made available and the
charges and expenses of the investment options or funds that you elect. See
also Appendix II at the end of this Prospectus for a discussion of QP
contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying
42 Tax information
taxes on it. This is your "investment in the contract." Generally, your
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which is part of the contract and which should have no adverse tax effect, it
is possible that the IRS could take a contrary position or assert that the
Protection Plus rider is not part of the contract. In such a case the charges
for the Protection Plus rider could be treated for federal income tax purposes
as a partial withdrawal from the contract. If this were so, such a deemed
withdrawal could be taxable and, for contract owners under age 59-1/2, also
subject to a tax penalty. Were the IRS to take this position, Equitable would
take all reasonable steps to attempt to avoid this result, which would include
amending the contract (with appropriate notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the NQ
contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) NQ contract. If you are using a life insurance or
endowment contract the owner and the insured must be the same on both
sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2, a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
included in your gross income for federal income tax purposes. Incidents of
investment control could include among other items, the number of investment
options available under a contract and/or the frequency of transfers available
under the contract. In connection with the issuance of regulations concerning
investment diversification in 1986, the Treasury Department announced that the
diversification regulations did not provide guidance on investor control but
that guidance would be issued in the form of regulations or rulings. As of the
date of this prospectus, no such guidance has been issued. It is not known
whether such guidelines, if in fact issued, would have retroactive adverse
effect on existing contracts. We cannot provide assurance
Tax information 43
as to the terms or scope of any future guidance nor any assurance that such
guidance would not be imposed on a retroactive basis to contracts issued under
this prospectus. We reserve the right to modify the contract as necessary to
attempt to prevent you from being considered the owner of the assets of the
separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets funding the account for the benefit of the IRA owner. The assets
typically include mutual funds and/or individual stocks and securities in a
custodial account, and bank certificates of deposit in a trusteed account. In
an individual retirement annuity, an insurance company issues an annuity
contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA or Roth IRA. The traditional IRAs we
offer are the Rollover IRA and Flexible Premium IRA. The versions of the Roth
IRA available are the Roth Conversion IRA and Flexible Premium Roth IRA. The
SAI contains the information that the IRS requires you to have before you
purchase an IRA. We do not discuss education IRAs because they are not
available in individual retirement annuity form. The disclosure generally
assumes direct ownership of the individual retirement annuity contract. For
contracts owned in a custodial individual retirement account, the disclosure
will apply only if you terminate your account or transfer ownership of the
contract to yourself.
The Equitable Accumulator(R) traditional and Roth IRA contracts have been
approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE
AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR CONTRACT AS A TRADITIONAL IRA
AND ROTH IRA, RESPECTIVELY, NOTED IN THE PARAGRAPH ABOVE DOES NOT INCLUDE THIS
OPTIONAL PROTECTION PLUS FEATURE. We have filed a request with the IRS that the
contract with the Protection Plus feature qualifies as to form for use as a
traditional IRA and Roth IRA, respectively. THERE IS NO ASSURANCE THAT THE
CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS THE IRS QUALIFICATION
REQUIREMENTS FOR IRAS. IRAs generally may not invest in life insurance
contracts. Although we view the optional Protection Plus benefit as an
investment protection feature which should have no adverse tax effect and not
as life insurance, it is possible that the IRS could take a contrary position
regarding tax qualification or assert that the Protection Plus rider is not a
permissible part of an individual retirement annuity contract. We further view
the optional Protection Plus benefit as part of the contract. There is also a
risk that the IRS may take the position that the optional Protection Plus
benefit is not part of the annuity contract. In such a case, the charges for
the Protection Plus rider could be treated for federal income tax purposes as a
partial withdrawal from the contract. If this were so, such a deemed withdrawal
could be taxable, and for contract owners under age 59-1/2, also subject to a
tax penalty. Were the IRS to take any adverse position, Equitable would take
all reasonable steps to attempt to avoid any adverse result, which would
include amending the contract (with appropriate notice to you). YOU SHOULD
DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER PURCHASING AN
ACCUMULATOR IRA OR ACCUMULATOR ROTH IRA WITH OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
44 Tax information
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA, surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally, there are two types of funding vehicles available for 403(b)
arrangements -- an annuity contract under Section 403(b)(1) of the Internal
Revenue Code or a custodial account that invests only in mutual funds and which
is treated as an annuity contract under Section 403(b)(7) of the Code. Both
types of 403(b) arrangements qualify for tax deferral.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Rollover TSA contract:
Tax information 45
o a rollover from another eligible retirement plan, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of
the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Rollover TSA contract,
you may have to obtain your employer's authorization or demonstrate that you do
not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to the withdrawal restrictions may depend on the
source of the funds used to establish the Accumulator(R) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over an "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation from service, if later. These rules are discussed in greater
detail in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding
46 Tax information
in some cases. Generally, we do not have to withhold if your distributions are
not taxable. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of your distribution. Any income tax withheld
is a credit against your income tax liability. If you do not have sufficient
income tax withheld or do not make sufficient estimated income tax payments,
you may incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional
IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution
is includable in your gross income. This may result in tax being withheld
even though the Roth IRA distribution is ultimately not taxable. You can
elect out of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However, we may require additional documentation in the case of
payments made to non-United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2 or
retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 and Separate
Account No. 49 for taxes. We do not now, but may in the future set up reserves
for such taxes.
Tax information 47
8. More information
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ABOUT SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 45 and
in Separate Account No. 49. We established Separate Account No. 45 in 1994 and
Separate Account No. 49 in 1996 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts. We are the legal owner of all of the
assets in Separate Account No. 45 and in Separate Account No. 49 and may
withdraw any amounts that exceed our reserves and other liabilities with
respect to variable investment options under our contracts. The results of
Separate Accounts' operations are accounted for without regard to Equitable
Life's other operations.
Each Separate Account is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or the Separate Accounts.
Each subaccount (variable investment option) within the Separate Accounts
invests solely in Class IB/B shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from either Separate Account, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate each Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against each Separate Account
or a variable investment option directly);
(5) to deregister the Separate Accounts under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Accounts; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999, EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to its
Class IB/B shares and other aspects of its operations, appear in the
prospectuses for each Trust, which are attached at the end of this Prospectus,
or in the respective SAIs, which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table are illustrative only
and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your financial professional.
The rates to maturity for new allocations as of February 15, 2002, and the
related price per $100 of maturity value were as shown below:
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR FEBRUARY 15, 2002 MATURITY VALUE
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2003 3.00% $97.09
2004 3.00% $94.26
2005 3.63% $89.85
2006 4.07% $85.24
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48 More information
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR FEBRUARY 15, 2002 MATURITY VALUE
- --------------------------------------------------------------------------------
2007 4.49% $80.27
2008 4.82% $75.38
2009 5.08% $70.67
2010 5.29% $66.19
2011 5.47% $61.90
2012 5.59% $58.03
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix III at the end of this Prospectus for
an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no longer
offering new fixed maturity options, the "current rate to maturity" will be
determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options and the account for
special dollar cost averaging, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
More information 49
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits" earlier in
this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgment of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgment of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgment of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ, FLEXIBLE PREMIUM IRA AND FLEXIBLE
PREMIUM ROTH IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account or
credit union checking account and contributed as an additional contribution
into an NQ, Flexible Premium IRA or Flexible Premium Roth IRA contract on a
monthly or quarterly basis. AIP is not available for Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contracts.
For NQ contracts, the minimum amounts we will deduct are $100 monthly and $300
quarterly. Under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the minimum amount is $50. AIP additional contributions may be allocated to any
of the variable investment options and available fixed maturity options but not
the account for special dollar cost averaging. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that business day. At
certain times, we may offer the opportunity to lock in the interest rate
for an initial contribution to be received under Section 1035 exchanges
and trustee to trustee transfers. Your financial professional can provide
information or you can call our processing office.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity in
effect for that fixed maturity option on the business day of the transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of shares of the Trusts, we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees;
50 More information
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in each prospectus for the Trusts or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Its shares are sold to our separate accounts
and an affiliated qualified plan trust. In addition, shares of the Trusts are
held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Accounts require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45 or Separate Account No. 49, our ability to meet
our obligations under the contracts or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001, incorporated in this
prospectus by reference to the 2001 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45 and Separate Account No.
49, as well as the consolidated financial statements of Equitable Life, are in
the applicable SAI. The SAI is available free of charge. You may request one by
writing to our processing office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
notification of any change at our processing office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" earlier in this Prospectus
and in the SAI.
You cannot assign or transfer ownership of an IRA, QP or Rollover TSA contract
except by surrender to us. If your individual retirement annuity contract is
held in your custodial individual retirement account, you may only assign or
transfer ownership of such an IRA contract to yourself. Loans are not available
and you cannot assign IRA and QP contracts as security for a loan or other
obligation. If the employer that provided the funds does not restrict them,
loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your IRA, QP or Rollover TSA
contract to another similar arrangement under federal income tax rules. In the
case of such a transfer, which involves a surrender of your contract, we will
impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC and AXA Distributors,
LLC. For this purpose, AXA Advisors, LLC serves as the principal underwriter of
Separate Account No. 45, and AXA Distributors, LLC serves as the principal
underwriter of Separate Account No. 49. The offering of the contracts is
intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for
More information 51
sales and marketing functions for the contracts funded through Separate Account
No. 45. AXA Advisors also act as distributor for other Equitable Life annuity
products with different features, expenses and fees. AXA Advisors is registered
with the SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
These contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
DISTRIBUTION OF THE CONTRACTS BY AXA DISTRIBUTORS, LLC
AXA Distributors, LLC (AXA Distributors), an indirect, wholly owned subsidiary
of Equitable Life, has responsibility for sales and marketing functions for the
contracts funded through Separate Account No. 49. AXA Distributors also acts as
distributor for other Equitable Life annuity products with different features,
expenses, and fees. AXA Distributors is registered with the SEC as a
broker-dealer and is a member of the National Association of Securities
Dealers, Inc. AXA Distributors' principal business address is 1290 Avenue of
the Americas, New York, New York 10104.
AXA Distributors is the successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. Like AXA Distributors, Equitable
Distributors, Inc. was owned by Equitable Holdings, LLC.
These contracts are sold by financial professionals of AXA Distributors as well
as by affiliated and unaffiliated broker-dealers who have entered into selling
agreements with AXA Distributors. We pay broker-dealer sales compensation that
will generally not exceed an amount equal to 7% of total contributions made
under the contracts. AXA Distributors may also receive compensation and
reimbursement for its marketing services under the terms of its distribution
agreement with Equitable Life. Broker-dealers receiving sales compensation will
generally pay a portion of it to their financial professional as commissions
related to sales of the contracts. The offering of the contracts is intended to
be continuous.
52 More information
9. Investment performance
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The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the withdrawal charge, the optional baseBUILDER benefit charge, the charge for
Protection Plus and the annual administrative charge under Flexible Premium IRA
and Flexible Premium Roth IRA contracts but does not reflect the charges
designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state or any applicable annuity administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts were offered
for the first time in 2000.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985, reflect the results of the variable investment options that preceded
them. The "Since portfolio inception" figures for these options are based on
the date of inception of the preceding variable investment options. We have
adjusted these results to reflect the maximum investment advisory fee payable
for the portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
Investment performance 53
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------------------------------------------------------------------------
EQ/Aggressive Stock (33.34)% (5.84)% 1.78%
EQ/Alliance Common Stock (19.13)% 7.21% 11.88%
EQ/Alliance Global (28.51)% 1.32% 5.02%
EQ/Alliance Growth and Income (10.08)% 11.53% 13.70%
EQ/Alliance Growth Investors (20.99)% 4.75% 7.78%
EQ/Alliance Intermediate Government Securities ( 0.79)% 3.60% 4.13%
EQ/Alliance International (31.50)% (5.52)% ( 1.61)%
EQ/Alliance Money Market ( 5.05)% 2.31% 2.73%
EQ/Alliance Premier Growth (32.15)% -- (14.85)%
EQ/Alliance Small Cap Growth (21.59)% -- 6.80%
EQ/Alliance Technology (32.62)% -- (39.87)%
EQ/AXP New Dimensions (23.83)% -- (28.99)%
EQ/AXP Strategy Aggressive (41.50)% -- (54.38)%
EQ/Capital Guardian Research (10.54)% -- 0.21%
EQ/Capital Guardian U.S. Equity (10.53)% -- ( 1.91)%
EQ/Emerging Markets Equity (13.63)% -- (10.91)%
EQ/Equity 500 Index (20.53)% 7.45% 11.60%
EQ/Evergreen Omega (25.30)% -- (10.83)%
EQ/FI Mid Cap (21.76)% -- (15.78)%
EQ/FI Small/Mid Cap Value ( 4.62)% -- 1.19%
EQ/High Yield ( 7.88)% (2.85)% 2.36%
EQ/International Equity Index (33.63)% -- ( 4.53)%
EQ/Janus Large Cap Growth (31.16)% -- (33.71)%
EQ/Mercury Basic Value Equity ( 3.11)% -- 11.23%
EQ/MFS Emerging Growth Companies (42.08)% -- 6.99%
EQ/MFS Investors Trust (24.29)% -- ( 6.90)%
EQ/MFS Research (30.04)% -- 3.41%
EQ/Putnam Growth & Income Value (15.26)% -- 2.92%
EQ/Small Company Index ( 6.53)% -- 0.88%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- -----------------------------------------------------------------------------------------------------
EQ/Aggressive Stock (12.23)% (5.84)% 1.86% 10.00%
EQ/Alliance Common Stock ( 5.15)% 7.21% 10.39% 11.77%
EQ/Alliance Global ( 7.36)% 1.32% 6.34% 6.57%
EQ/Alliance Growth and Income 4.68% 11.53% -- 11.19%
EQ/Alliance Growth Investors ( 2.73)% 4.75% 6.74% 9.77%
EQ/Alliance Intermediate Government Securities 1.90% 3.60% 3.62% 4.32%
EQ/Alliance International (10.56)% (5.52)% -- ( 1.41)%
EQ/Alliance Money Market 1.18% 2.31% 2.35% 4.36%
EQ/Alliance Premier Growth -- -- -- (14.84)%
EQ/Alliance Small Cap Growth 4.47% -- -- 6.80%
EQ/Alliance Technology -- -- -- (39.87)%
EQ/AXP New Dimensions -- -- -- (29.76)%
EQ/AXP Strategy Aggressive -- -- -- (55.16)%
EQ/Capital Guardian Research -- -- -- 0.21%
EQ/Capital Guardian U.S. Equity -- -- -- ( 1.92)%
EQ/Emerging Markets Equity 0.10% -- -- (12.46)%
EQ/Equity 500 Index ( 5.32)% 7.45% -- 11.32%
EQ/Evergreen Omega (10.82)% -- -- (10.82)%
EQ/FI Mid Cap -- -- -- (16.45)%
EQ/FI Small/Mid Cap Value 0.04% -- -- 1.19%
EQ/High Yield ( 7.77)% (2.85)% 4.74% 5.09%
EQ/International Equity Index (11.65)% -- -- ( 4.53)%
EQ/Janus Large Cap Growth -- -- -- (34.22)%
EQ/Mercury Basic Value Equity 8.49% -- -- 11.23%
EQ/MFS Emerging Growth Companies ( 6.03)% -- -- 6.99%
EQ/MFS Investors Trust ( 6.90)% -- -- ( 6.90)%
EQ/MFS Research ( 6.71)% -- -- 3.41%
EQ/Putnam Growth & Income Value ( 4.29)% -- -- 2.92%
EQ/Small Company Index 2.44% -- -- 0.88%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October 16,
1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Alliance Technology (May 1,
2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap Value and EQ/Janus Large Cap Growth
(September 5, 2000); EQ/Balanced (May 18, 2001); EQ/Calvert Socially
Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier VIP Core
Bond, AXA Premier VIP Health Care, AXA Premier VIP International Equity, AXA
Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA
Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA
Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology, EQ/Alliance
Growth and Income, EQ/Alliance International, EQ/Alliance Quality Bond,
EQ/AXP New Dimensions and EQ/AXP Strategy Aggressive (January 14, 2002);
EQ/Alliance Intermediate Government Securities (April 1, 2002). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
54 Investment performance
TABLE FOR SEPARATE ACCOUNT 45
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- -------------------------------------------------------------------------------
EQ/Aggressive Stock (33.34)% (5.84)% ( 5.38)%
EQ/Alliance Common Stock (19.13)% 7.21% 8.00%
EQ/Alliance Global (28.51)% 1.32% 1.92%
EQ/Alliance Growth Investors (20.99)% 4.75% 5.11%
EQ/Alliance Money Market ( 5.05)% 2.31% 2.42%
EQ/Alliance Premier Growth (32.15)% -- (14.85)%
EQ/Alliance Small Cap Growth (21.59)% -- 6.80%
EQ/Alliance Technology (32.62)% -- (39.87)%
EQ/Bernstein Diversified Value ( 5.51)% -- 2.95%
EQ/Capital Guardian International (29.12)% -- ( 7.73)%
EQ/Capital Guardian Research (10.54)% -- 0.21%
EQ/Capital Guardian U.S. Equity (10.53)% -- ( 1.91)%
EQ/Emerging Markets Equity (13.63)% -- ( 8.20)%
EQ/Equity 500 Index (20.53)% 7.45% 8.23%
EQ/Evergreen Omega (25.30)% -- (10.83)%
EQ/FI Mid Cap (21.76)% -- (15.78)%
EQ/FI Small/Mid Cap Value ( 4.62)% -- 3.02%
EQ/High Yield ( 7.88)% (2.85)% ( 2.18)%
EQ/International Equity Index (33.63)% -- ( 4.53)%
EQ/J.P. Morgan Core Bond ( 0.74)% -- 3.66%
EQ/Janus Large Cap Growth (31.16)% -- (33.71)%
EQ/Lazard Small Cap Value 8.91% -- 4.21%
EQ/Mercury Basic Value Equity ( 3.11)% -- 11.23%
EQ/MFS Emerging Growth Companies (42.08)% -- 6.99%
EQ/MFS Investors Trust (24.29)% -- ( 6.90)%
EQ/MFS Research (30.04)% -- 3.41%
EQ/Putnam Growth & Income Value (15.26)% -- 2.92%
EQ/Putnam International Equity (29.75)% -- 5.58%
EQ/Putnam Voyager (32.64)% -- 4.48%
EQ/Small Company Index ( 6.53)% -- 0.88%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- ----------------------------------------------------------------------------------------
EQ/Aggressive Stock (12.23)% (5.84)% 1.86% 10.00%
EQ/Alliance Common Stock ( 5.15)% 7.21% 10.39% 11.77%
EQ/Alliance Global ( 7.36)% 1.32% 6.34% 6.57%
EQ/Alliance Growth Investors ( 2.73)% 4.75% 6.74% 9.77%
EQ/Alliance Money Market 1.18% 2.31% 2.35% 4.36%
EQ/Alliance Premier Growth -- -- -- (14.84)%
EQ/Alliance Small Cap Growth 4.47% -- -- 6.80%
EQ/Alliance Technology -- -- -- (39.87)%
EQ/Bernstein Diversified Value ( 2.11)% -- -- 2.95%
EQ/Capital Guardian International -- -- -- ( 7.73)%
EQ/Capital Guardian Research -- -- -- 0.21%
EQ/Capital Guardian U.S. Equity -- -- -- ( 1.92)%
EQ/Emerging Markets Equity 0.10% -- -- (12.46)%
EQ/Equity 500 Index ( 5.32)% 7.45% -- 11.32%
EQ/Evergreen Omega (10.82)% -- -- (10.82)%
EQ/FI Mid Cap -- -- -- (16.45)%
EQ/FI Small/Mid Cap Value 0.04% -- -- 1.19%
EQ/High Yield ( 7.77)% (2.85)% 4.74% 5.09%
EQ/International Equity Index (11.65)% -- -- ( 4.53)%
EQ/J.P. Morgan Core Bond 2.23% -- -- 3.66%
EQ/Janus Large Cap Growth -- -- -- (34.22)%
EQ/Lazard Small Cap Value 8.89% -- -- 4.21%
EQ/Mercury Basic Value Equity 8.49% -- -- 11.23%
EQ/MFS Emerging Growth Companies ( 6.03)% -- -- 6.99%
EQ/MFS Investors Trust ( 6.90)% -- -- ( 6.90)%
EQ/MFS Research ( 6.71)% -- -- 3.41%
EQ/Putnam Growth & Income Value ( 4.29)% -- -- 2.92%
EQ/Putnam International Equity ( 0.22)% -- -- 5.58%
EQ/Putnam Voyager (10.60)% -- -- 4.48%
EQ/Small Company Index 2.44% -- -- 0.88%
* The variable option inception dates are: EQ/Aggressive Stock, EQ/Alliance
Common Stock, EQ/Alliance Global, EQ/Alliance Growth and Income, EQ/Alliance
Growth Investors, EQ/Alliance Intermediate Government Securities, EQ/Alliance
International, EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High
Yield (May 1, 1995); EQ/Alliance Small Cap Growth, EQ/FI Small/Mid Cap Value,
EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth Companies, EQ/MFS
Research and EQ/Putnam Growth & Income Value (May 1, 1997); EQ/Emerging
Markets Equity (September 2, 1997); EQ/International Equity Index and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy
Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September 5, 2000);
EQ/Balanced and EQ/Bernstein Diversified Value (May 18, 2001); EQ/Calvert
Socially Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier
VIP Core Bond, AXA Premier VIP Health Care, AXA Premier VIP International
Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap
Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap
Growth, AXA Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology,
EQ/Alliance Quality Bond, EQ/Capital Guardian International, EQ/J.P. Morgan
Core Bond, EQ/Lazard Small Cap Value, EQ/Putnam International Equity and
EQ/Putnam Voyager (January 14, 2002). No performance information is provided
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
Investment performance 55
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly Money
Morningstar's Variable Annuity Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
From time to time we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper, the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts. Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) performance relative to other variable annuity
products. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
withdrawal charge, the optional baseBUILDER benefit charge, the optional
Protection Plus benefit charge, the annual administrative charge, and any
charge designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. The yields and effective yields for the
EQ/Alliance Money Market option, when used for the special dollar cost
averaging program, assume that no contract charges are deducted. For more
information, see "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option" in the SAI.
56 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
2001 is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is, or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 57
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Accounts 45 and 49 with the daily asset charge of 1.55%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
----------------------------------
2000 2001
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock
Unit value $ 67.28 $ 49.56
Separate Account 45 number of units outstanding (000's) 36 118
Separate Account 49 number of units outstanding (000's) 106 249
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock
Unit value $235.03 $206.51
Separate Account 45 number of units outstanding (000's) 217 468
Separate Account 49 number of units outstanding (000's) 204 499
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global
Unit value $ 34.60 $ 27.16
Separate Account 45 number of units outstanding (000's) 443 1,072
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income
Unit value $ 25.90 $ 25.10
Separate Account 45 number of units outstanding (000's) 1,223 4,363
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors
Unit value $ 38.95 $ 33.50
Separate Account 45 number of units outstanding (000's) 625 1,374
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities
Unit value $ 15.83 $ 16.81
Separate Account 45 number of units outstanding (000's) 269 2,919
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International
Unit value $ 12.60 $ 9.51
Separate Account 45 number of units outstanding (000's) 389 702
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market
Unit value $ 26.91 $ 27.44
Separate Account 45 number of units outstanding (000's) 571 2,060
Separate Account 49 number of units outstanding (000's) 826 4,110
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth
Unit value $ 9.46 $ 7.08
Separate Account 45 number of units outstanding (000's) 3,355 6,887
Separate Account 49 number of units outstanding (000's) 6,200 14,217
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth
Unit value $ 16.56 $ 14.14
Separate Account 45 number of units outstanding (000's) 825 2,681
Separate Account 49 number of units outstanding (000's) 1,248 2,971
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology
Unit value $ 6.61 $ 4.91
Separate Account 45 number of units outstanding (000's) 1,600 4,587
Separate Account 49 number of units outstanding (000's) 4,225 9,666
- ------------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
----------------------------------
2000 2001
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions
Unit value $ 8.28 $ 6.89
Separate Account 45 number of units outstanding (000's) 49 310
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive
Unit value $ 6.21 $ 4.07
Separate Account 45 number of units outstanding (000's) 52 485
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced
Unit value -- $39.47
Separate Account 45 number of units outstanding (000's) -- 1,417
Separate Account 49 number of units outstanding (000's) -- 110
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value
Unit value $11.63 $11.80
Separate Account 45 number of units outstanding (000's) -- 1,416
Separate Account 49 number of units outstanding (000's) 1,119 4,851
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible
Unit value -- $ 8.63
Separate Account 45 number of units outstanding (000's) -- 3
Separate Account 49 number of units outstanding (000's) -- 19
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International
Unit value $11.10 $ 8.65
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) 1,050 2,530
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research
Unit value $11.05 $10.66
Separate Account 45 number of units outstanding (000's) 110 283
Separate Account 49 number of units outstanding (000's) 628 2,052
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U. S. Equity
Unit value $10.47 $10.10
Separate Account 45 number of units outstanding (000's) 110 339
Separate Account 49 number of units outstanding (000's) 1,311 3,790
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity
Unit value $ 6.49 $ 6.06
Separate Account 45 number of units outstanding (000's) 541 1,014
Separate Account 49 number of units outstanding (000's) 881 1,482
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index
Unit value $27.79 $24.03
Separate Account 45 number of units outstanding (000's) 421 1,082
Separate Account 49 number of units outstanding (000's) 1,524 4,534
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega
Unit value $ 9.39 $ 7.67
Separate Account 45 number of units outstanding (000's) 39 233
Separate Account 49 number of units outstanding (000's) 47 182
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap
Unit value $ 9.99 $ 8.52
Separate Account 45 number of units outstanding (000's) 58 1,550
Separate Account 49 number of units outstanding (000's) 609 4,418
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value
Unit value $10.84 $11.09
Separate Account 45 number of units outstanding (000's) 70 2,457
Separate Account 49 number of units outstanding (000's) 198 3,015
- ------------------------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
----------------------------------
2000 2001
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield
Unit value $23.23 $23.03
Separate Account 45 number of units outstanding (000's) 145 696
Separate Account 49 number of units outstanding (000's) 432 1,632
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index
Unit value $12.04 $ 8.83
Separate Account 45 number of units outstanding (000's) 111 353
Separate Account 49 number of units outstanding (000's) 425 1,164
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond
Unit value $11.41 $12.13
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) 1,427 8,943
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth
Unit value $ 8.39 $ 6.36
Separate Account 45 number of units outstanding (000's) 182 1,651
Separate Account 49 number of units outstanding (000's) 1,134 7,216
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value
Unit value $10.69 $12.39
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) 588 2,447
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marisco Focus
Unit value -- $11.33
Separate Account 45 number of units outstanding (000's) -- 32
Separate Account 49 number of units outstanding (000's) -- 89
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity
Unit value $16.40 $17.04
Separate Account 45 number of units outstanding (000's) 275 1,793
Separate Account 49 number of units outstanding (000's) 299 1,071
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies
Unit value $21.92 $14.23
Separate Account 45 number of units outstanding (000's) 1,301 2,260
Separate Account 49 number of units outstanding (000's) 2,112 4,345
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust
Unit value $10.47 $ 8.66
Separate Account 45 number of units outstanding (000's) 298 584
Separate Account 49 number of units outstanding (000's) 2,262 7,160
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research
Unit value $15.87 $12.21
Separate Account 45 number of units outstanding (000's) 551 1,157
Separate Account 49 number of units outstanding (000's) 2,075 5,117
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
Unit value $13.04 $11.97
Separate Account 45 number of units outstanding (000's) 80 398
Separate Account 49 number of units outstanding (000's) 1,419 6,123
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity
Unit value $17.37 $13.42
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) 2,110 4,268
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth
Unit value $17.19 $12.78
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) 1,902 4,051
- ------------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-3
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
----------------------------------
2000 2001
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index
Unit value $10.87 $10.92
Separate Account 45 number of units outstanding (000's) 106 361
Separate Account 49 number of units outstanding (000's) 270 825
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/T. Rowe Price International Stock
Unit value $11.34 $ 8.73
Separate Account 45 number of units outstanding (000's) 462 1,269
Separate Account 49 number of units outstanding (000's) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
A-4 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R) QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether
the plan provisions permit the investment of plan assets in the QP contract,
the distribution of such an annuity, the purchase of the guaranteed minimum
income benefit and the payment of death benefits in accordance with the
requirements of the federal income tax rules. The QP contract and this
prospectus should be reviewed in full, and the following factors, among others,
should be noted. Assuming continued plan qualification and operation, earnings
on qualified plan assets will accumulate value on a tax-deferred basis even if
the plan is not funded by the Equitable Accumulator(R) QP contract or another
annuity. Therefore, you should purchase an Equitable Accumulator(R) QP contract
to fund a plan for the contract's features and benefits other than tax
deferral, after considering the relative costs and benefits of annuity
contracts and other types of arrangements and funding vehicles. This QP
contract accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge and/or market value adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70-1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60-1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution, and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,846 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- --------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2007
--------------------
5.00% 9.00%
- --------------------------------------------------------------------------------
AS OF FEBRUARY 15, 2007 (BEFORE WITHDRAWAL)
- --------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $119,487
(2) Fixed maturity amount $131,080 $131,080
(3) Market value adjustment:
(1) - (2) $ 12,968 $(11,593)
- --------------------------------------------------------------------------------
ON FEBRUARY 15, 2007 (AFTER WITHDRAWAL)
- --------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,499 $ 54,851
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
(7) Maturity value $120,032 $106,915
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- --------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Appendix IV: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market or EQ/Alliance Quality Bond
options or the fixed maturity options), no additional contributions, no
transfers, no withdrawals and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
- ------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- ------------------------------------------------------------------------------------
1 $105,000 $105,000 (1) $105,000 (3)
2 $115,500 $110,250 (2) $115,500 (3)
3 $129,360 $115,763 (2) $129,360 (3)
4 $103,488 $121,551 (1) $129,360 (4)
5 $113,837 $127,628 (1) $129,360 (4)
6 $127,497 $134,010 (1) $129,360 (4)
7 $127,497 $140,710 (1) $129,360 (4)
- ------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80*
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the guaranteed minimum death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current guaranteed minimum death
benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is the guaranteed minimum death benefit at the end of the prior
year since it is equal to or higher than the current account value.
- ----------
* If your contract is issued in the state of Washington, the applicable
crediting rate would be 3%, and, therefore, the values shown would be lower.
Appendix IV: Guaranteed minimum death benefit example D-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option 23
Distribution of the contracts 25
Financial Statements 25
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR(R) STATEMENT OF ADDITIONAL INFORMATION
FOR SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator(R)
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator(R) SAI dated May 1, 2002.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
(SAI 13AMLF(5/02))
Equitable Accumulator(R) Plus(SM)
A variable deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) Plus(SM)?
Equitable Accumulator(R) Plus(SM) is a deferred annuity contract issued by The
Equitable Life Assurance Society of the United States. It provides for the
accumulation of retirement savings and for income. The contract offers death
benefit protection and a number of payout options. You invest to accumulate
value on a tax-deferred basis in one or more of our variable investment
options. This contract may not currently be available in all states.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager(2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
- --------------------------------------------------------------------------------
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 45 and
Separate Account No. 49. Each variable investment option, in turn, invests in a
corresponding securities portfolio of EQ Advisors Trust or AXA Premier VIP
Trust (the "Trusts"). Your investment results in a variable investment option
will depend on the investment performance of the related portfolio.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An annuity that is an investment vehicle for a qualified defined contribution
or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $10,000 is required to purchase a contract. We add
an amount ("credit") to your contract with each contribution you make. Over
time, the amount of the credit may be more than offset by fees and charges
associated with the credit.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
processing office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be
obtained from the SEC's Web site at http://www.sec.gov. The table of contents
for the SAI appears at the back of this prospectus.
The SEC has not approved or disapproved these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense. The contracts are not insured by the FDIC or any other
agency. They are not deposits or other obligations of any bank and are not bank
guaranteed. They are subject to investment risks and possible loss of
principal.
X00287
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) Plus(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Plus(SM) at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your variable investment options under the contract? 17
Allocating your contributions 21
Credits 21
Guaranteed minimum death benefit 21
Your right to cancel within a certain number of days 23
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 24
- --------------------------------------------------------------------------------
Your account value and cash value 24
Your contract's value in the variable investment options 24
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG THE VARIABLE INVESTMENT OPTIONS 25
- --------------------------------------------------------------------------------
Transferring your account value 25
Disruptive transfer activity 25
Dollar cost averaging your account value 25
Rebalancing your account value 25
- ----------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 27
- --------------------------------------------------------------------------------
Withdrawing your account value 27
How withdrawals are taken from your account value 28
How withdrawals affect your guaranteed minimum death benefit 28
Loans under rollover TSA contracts 28
Surrendering your contract to receive its cash value 29
When to expect payments 29
Your annuity payout options 29
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 32
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 32
Charges that the Trusts deduct 33
Group or sponsored arrangements 33
Other distribution arrangements 34
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 35
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 35
How death benefit payment is made 35
Beneficiary continuation option 36
- --------------------------------------------------------------------------------
7. TAX INFORMATION 37
- --------------------------------------------------------------------------------
Overview 37
Buying a contract to fund a retirement arrangement 37
Transfers among investment options 37
Taxation of nonqualified annuities 37
Individual retirement arrangements (IRAs) 39
Special rules for contracts funding qualified plans 40
Tax- Sheltered Annuity contracts (TSAs) 40
Federal and state income tax withholding and information
reporting 41
Impact of taxes to Equitable Life 42
- --------------------------------------------------------------------------------
8. MORE INFORMATION 43
- --------------------------------------------------------------------------------
About Separate Account No. 45 and Separate Account No. 49 43
About the Trusts 43
About the general account 43
About other methods of payment 43
Dates and prices at which contract events occur 44
About your voting rights 44
About legal proceedings 45
About our independent accountants 45
Financial statements 45
Transfers of ownership, collateral assignments, loans
and borrowing 45
Distribution of the contracts 45
- --------------------------------------------------------------------------------
9. INVESTMENT PERFORMANCE 47
- --------------------------------------------------------------------------------
Communicating performance data 50
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Guaranteed minimum death benefit example C-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account value 24
annuitant 15
annuity payout options 29
beneficiary 35
business day 44
cash value 24
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs ` 39
regular contributions 39
rollover and direct transfers 40
conversion contributions 40
contributions to traditional IRAs 39
regular contributions 39
rollovers and transfers 40
credit 21
disruptive transfer activity 25
EQAccess 6
ERISA 28
guaranteed minimum death benefit 21
PAGE
IRA cover
IRS 37
market timing 25
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 39
SAI cover
SEC cover
TOPS 6
TSA 40
traditional IRA 39
Trusts cover
unit 24
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract or supplemental materials.
- -------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- -------------------------------------------------------------------------------
variable investment options Investment Funds
account value Annuity Account Value
unit Accumulation Unit
- -------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
P.O. Box 13014
Newark, NJ 07188-0014
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the variable
investment options;
o change your personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our web site at http:// www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial
professional (available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA
contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA
contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between variable investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Plus(SM) at a glance -- key features
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL INVESTMENT Equitable Accumulator(R) Plus' variable investment options invest in different portfolios managed by
MANAGEMENT professional investment advisers.
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TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among variable investment options.
contract
----------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), Tax Sheltered
Annuity (TSA)or to fund an employer retirement plan (QP or Qualified Plan), you should be aware that such
annuities do not provide tax deferral benefits beyond those already provided by the Internal Revenue Code.
Before purchasing one of these annuities, you should consider whether its features and benefits beyond tax
deferral meet your needs and goals. You may also want to consider the relative features, benefits and
costs of these annuities compared with any other investment that you may use in connection with your
retirement plan or arrangement. (For more information, see "Tax information," later in this Prospectus
and in the SAI.)
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $10,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
----------------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
CREDIT We allocate your contributions to your account value. We allocate a credit to your account value at
the same time that we allocate your contributions. The amount of credit may be up to 6% of each
contribution, depending on certain factors. The credit is subject to recovery by us in certain limited
circumstances.
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ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract.
You may also incur income tax and a tax penalty.
- ------------------------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness or confinement to a nursing home
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
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8 Equitable Accumulator(R) Plus(SM) at a glance -- key features
FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality and expense risks,
administrative and distribution charges at a current annual rate of 1.60%.
o Annual 0.20% Protection Plus charge for this optional death benefit.
o No sales charge deducted at the time you make contributions and no annual contract fee.
o During the first eight contract years following a contribution, a charge will be deducted from amounts that
you withdraw that exceed 15% of your account value. We use the account value on the most recent contract
date anniversary to calculate the 15% amount available. The charge is 8% in each of the first two contract
years following a contribution. It declines by 1% each year in the third to eighth contract year following
a contribution. There is no withdrawal charge in the ninth and later contract years following a
contribution.
-----------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we receive the
properly completed and signed application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The end of each 12-month
period is your "contract date anniversary."
-----------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. This charge is generally deducted from the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net assets
invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-80
Rollover IRA, Roth Conversion
IRA Rollover TSA: 20-78
QP: 20-70
- ------------------------------------------------------------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your financial professional
can show you information regarding other Equitable Life annuity contracts that
he or she distributes. You can also contact us to find out more about any of
the Equitable Life annuity contracts.
Equitable Accumulator(R) Plus(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this Prospectus.
- ----------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL
PERCENTAGE OF DAILY NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%*
Administrative 0.25%
Distribution 0.25%
------
Total annual expenses 1.60%
- ----------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions* (deducted if you Contract year
surrender your contract or make certain withdrawals. The withdrawal 1............................. 8.00%
charge percentage we use is determined by the contract year in which 2..............................8.00%
you make the withdrawal or surrender your contract. For each contri- 3..............................7.00%
bution, we consider the contract year in which we receive that 4..............................6.00%
contribution to be "contract year 1")(2) 5..............................5.00%
6..............................4.00%
7..............................3.00%
8..............................2.00%
9+.............................0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- ----------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- ----------------------------------------------------------------------------------------------------------
PROTECTION PLUS BENEFIT CHARGE (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary) 0.20 %
- ----------------------------------------------------------------------------------------------------------
* These charges compensate us for certain risks we assume and expenses we incur
under the contract. They also compensate us for the expense associated with
the credit. We expect to make a profit from these charges.
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- -----------------------------------------------------------------------------------------------------------------------------------
NET
TOTAL ANNUAL
MANAGEMENT FEES OTHER EXPENSES EXPENSES (AFTER
(AFTER EXPENSE (AFTER EXPENSE EXPENSE
PORTFOLIO NAME LIMITATION)(3) 12B-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
- -----------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- -----------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
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Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount and upon surrender of a contract.
(3) The management fees for each portfolio cannot be increased without a vote
of each portfolio's shareholders. See footnote (6) for any expense
limitation agreement information.
Fee table 11
(4) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Also, initial seed capital was invested for the
Portfolios of the AXA Premier VIP Trust on December 31, 2001, thus, "Other
Expenses" shown are estimated. See footnote (6) for any expense limitation
agreement information.
(6) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ----------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- --------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- --------------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected Protection Plus) would pay in the situation illustrated. We assume
that a $1,000 contribution plus a $40 credit (which may be subject to recovery)
is invested in one of the variable investment options listed and a 5% annual
return is earned on the assets in that option.(1) Since the Protection Plus
feature only applies under certain contracts, expenses would be lower for
contracts that do not have this feature.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the examples.
The example should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance. The amount accumulated
from the $1,000 contribution plus the $40 credit could not be paid in the form
of an annuity payout option at the end of any of the periods shown in the
- ---------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
---------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 111.12 $ 165.25 $ 211.98 $ 340.89
AXA Premier VIP Health Care $ 120.95 $ 194.16 $ 259.15 $ 429.64
AXA Premier VIP International Equity $ 120.40 $ 192.57 $ 256.58 $ 424.93
AXA Premier VIP Large Cap Core Equity $ 115.49 $ 178.17 $ 233.17 $ 381.36
AXA Premier VIP Large Cap Growth $ 115.49 $ 178.17 $ 233.17 $ 381.36
AXA Premier VIP Large Cap Value $ 115.49 $ 178.17 $ 233.17 $ 381.36
AXA Premier VIP Small/Mid Cap Growth $ 118.22 $ 186.19 $ 246.23 $ 405.81
AXA Premier VIP Small/Mid Cap Value $ 118.22 $ 186.19 $ 246.23 $ 405.81
AXA Premier VIP Technology $ 120.95 $ 194.16 $ 259.15 $ 429.64
EQ/Aggressive Stock $ 111.01 $ 164.93 $ 211.45 $ 339.86
EQ/Alliance Common Stock $ 109.27 $ 159.73 $ 202.87 $ 323.19
EQ/Alliance Global $ 112.76 $ 170.11 $ 219.97 $ 356.26
EQ/Alliance Growth and Income $ 110.36 $ 162.98 $ 208.24 $ 333.64
EQ/Alliance Growth Investors $ 110.36 $ 162.98 $ 208.24 $ 333.64
EQ/Alliance Intermediate Government Securities $ 110.25 $ 162.66 $ 207.70 $ 332.60
EQ/Alliance International $ 115.49 $ 178.17 $ 233.17 $ 381.36
EQ/Alliance Money Market $ 107.85 $ 155.49 $ 195.85 $ 309.44
EQ/Alliance Premier Growth $ 113.31 $ 171.72 $ 222.63 $ 361.33
EQ/Alliance Quality Bond $ 110.03 $ 162.01 $ 206.63 $ 330.52
EQ/Alliance Small Cap Growth $ 112.32 $ 168.82 $ 217.85 $ 352.19
EQ/Alliance Technology $ 113.31 $ 171.72 $ 222.63 $ 361.33
EQ/AXP New Dimensions $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/AXP Strategy Aggressive $ 111.67 $ 166.87 $ 214.65 $ 346.04
EQ/Balanced $ 110.58 $ 163.63 $ 209.31 $ 335.72
EQ/Bernstein Diversified Value $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/Calvert Socially Responsible $ 112.21 $ 168.49 $ 217.32 $ 351.17
EQ/Capital Guardian International $ 113.85 $ 173.34 $ 225.27 $ 366.38
EQ/Capital Guardian Research $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/Capital Guardian U.S. Equity $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/Emerging Markets Equity $ 120.40 $ 192.57 $ 256.58 $ 424.93
EQ/Equity 500 Index $ 106.86 $ 152.55 $ 190.97 $ 299.81
EQ/Evergreen Omega $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/FI Mid Cap $ 111.67 $ 166.87 $ 214.65 $ 346.04
EQ/FI Small/Mid Cap Value $ 112.76 $ 170.11 $ 219.97 $ 356.26
EQ/High Yield $ 110.79 $ 164.28 $ 210.38 $ 337.79
EQ/International Equity Index $ 112.76 $ 170.11 $ 219.97 $ 356.26
EQ/J.P. Morgan Core Bond $ 109.48 $ 160.38 $ 203.94 $ 325.29
EQ/Janus Large Cap Growth $ 113.31 $ 171.72 $ 222.63 $ 361.33
EQ/Lazard Small Cap Value $ 112.76 $ 170.11 $ 219.97 $ 356.26
EQ/Marsico Focus $ 113.31 $ 171.72 $ 222.63 $ 361.33
EQ/Mercury Basic Value Equity $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/MFS Emerging Growth Companies $ 111.34 $ 165.90 $ 213.05 $ 342.96
EQ/MFS Investors Trust $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/MFS Research $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/Putnam Growth & Income Value $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/Putnam International Equity $ 114.40 $ 174.95 $ 227.91 $ 371.40
EQ/Putnam Voyager $ 111.12 $ 165.25 $ 211.98 $ 340.89
EQ/Small Company Index $ 110.03 $ 162.01 $ 206.63 $ 330.52
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
---------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 31.12 $ 95.25 $ 161.98 $ 340.89
AXA Premier VIP Health Care $ 40.95 $ 124.16 $ 209.15 $ 429.64
AXA Premier VIP International Equity $ 40.40 $ 122.57 $ 206.58 $ 424.93
AXA Premier VIP Large Cap Core Equity $ 35.49 $ 108.17 $ 183.17 $ 381.36
AXA Premier VIP Large Cap Growth $ 35.49 $ 108.17 $ 183.17 $ 381.36
AXA Premier VIP Large Cap Value $ 35.49 $ 108.17 $ 183.17 $ 381.36
AXA Premier VIP Small/Mid Cap Growth $ 38.22 $ 116.19 $ 196.23 $ 405.81
AXA Premier VIP Small/Mid Cap Value $ 38.22 $ 116.19 $ 196.23 $ 405.81
AXA Premier VIP Technology $ 40.95 $ 124.16 $ 209.15 $ 429.64
EQ/Aggressive Stock $ 31.01 $ 94.93 $ 161.45 $ 339.86
EQ/Alliance Common Stock $ 29.27 $ 89.73 $ 152.87 $ 323.19
EQ/Alliance Global $ 32.76 $ 100.11 $ 169.97 $ 356.26
EQ/Alliance Growth and Income $ 30.36 $ 92.98 $ 158.24 $ 333.64
EQ/Alliance Growth Investors $ 30.36 $ 92.98 $ 158.24 $ 333.64
EQ/Alliance Intermediate Government Securities $ 30.25 $ 92.66 $ 157.70 $ 332.60
EQ/Alliance International $ 35.49 $ 108.17 $ 183.17 $ 381.36
EQ/Alliance Money Market $ 27.85 $ 85.49 $ 145.85 $ 309.44
EQ/Alliance Premier Growth $ 33.31 $ 101.72 $ 172.63 $ 361.33
EQ/Alliance Quality Bond $ 30.03 $ 92.01 $ 156.63 $ 330.52
EQ/Alliance Small Cap Growth $ 32.32 $ 98.82 $ 167.85 $ 352.19
EQ/Alliance Technology $ 33.31 $ 101.72 $ 172.63 $ 361.33
EQ/AXP New Dimensions $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/AXP Strategy Aggressive $ 31.67 $ 96.87 $ 164.65 $ 346.04
EQ/Balanced $ 30.58 $ 93.63 $ 159.31 $ 335.72
EQ/Bernstein Diversified Value $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/Calvert Socially Responsible $ 32.21 $ 98.49 $ 167.32 $ 351.17
EQ/Capital Guardian International $ 33.85 $ 103.34 $ 175.27 $ 366.38
EQ/Capital Guardian Research $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/Capital Guardian U.S. Equity $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/Emerging Markets Equity $ 40.40 $ 122.57 $ 206.58 $ 424.93
EQ/Equity 500 Index $ 26.86 $ 82.55 $ 140.97 $ 299.81
EQ/Evergreen Omega $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/FI Mid Cap $ 31.67 $ 96.87 $ 164.65 $ 346.04
EQ/FI Small/Mid Cap Value $ 32.76 $ 100.11 $ 169.97 $ 356.26
EQ/High Yield $ 30.79 $ 94.28 $ 160.38 $ 337.79
EQ/International Equity Index $ 32.76 $ 100.11 $ 169.97 $ 356.26
EQ/J.P. Morgan Core Bond $ 29.48 $ 90.38 $ 153.94 $ 325.29
EQ/Janus Large Cap Growth $ 33.31 $ 101.72 $ 172.63 $ 361.33
EQ/Lazard Small Cap Value $ 32.76 $ 100.11 $ 169.97 $ 356.26
EQ/Marsico Focus $ 33.31 $ 101.72 $ 172.63 $ 361.33
EQ/Mercury Basic Value Equity $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/MFS Emerging Growth Companies $ 31.34 $ 95.90 $ 163.05 $ 342.96
EQ/MFS Investors Trust $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/MFS Research $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/Putnam Growth & Income Value $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/Putnam International Equity $ 34.40 $ 104.95 $ 177.91 $ 371.40
EQ/Putnam Voyager $ 31.12 $ 95.25 $ 161.98 $ 340.89
EQ/Small Company Index $ 30.03 $ 92.01 $ 156.63 $ 330.52
- ---------------------------------------------------------------------------------------------------------
Fee table
13
(1) The amount accumulated from the $1,000 contribution plus the $40 credit
could not be paid in the form of an annuity payout option at the end of any of
the periods shown in the examples. This is because if the amount applied to
purchase an annuity payout option is less than $2,000, or the initial payment
is less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money" later in
this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
examples for "if you do not surrender your contract" would, in each case, be
increased by $5.44 based on the average amount applied to annuity payout
options in 2001. See "Annuity administrative fee" in "Charges and expenses"
later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
14 Fee table
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $10,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. All ages in the table refer
to the age of the annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
FOR ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 80 o After-tax money. o No additional contributions after age 81.
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue
Code.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 78 o Eligible rollover distributions from TSA o No contributions after age 79.
contracts or other 403(b) arrangements,
qualified plans, and governmental EDC o Contributions after age 70-1/2 must be net of
plans. required minimum distributions.
o Rollovers from another traditional indi- o Although we accept regular IRA contribu-
tions (limited to $3,000 for the calendar year 2002) under Rollover IRA contracts, we
vidual retirement arrangement. intend that this contract be used primarily
for rollover and direct transfer contributions.
o Direct custodian-to-custodian transfers
from another traditional individual retire- o Additional catch-up contributions totaling
ment arrangement. up to $500 can be made for the calendar
year 2002 where the owner is at least age
o Regular IRA contributions. 50 but under age 70-1/2 at any time during
2002.
o For the calendar year 2002 and later, addi-
tional "catch-up" contributions.
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 78 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA contributions after age 79.
o Conversion rollovers from a traditional
IRA. o Conversion rollovers after age 70-1/2 must be
net of required minimum distributions for
o Direct transfers from another Roth IRA. the traditional IRA you are rolling over.
o Regular Roth IRA contributions. o You cannot roll over funds from a traditional
IRA if your adjusted gross income is
o For the calendar year 2002 and later, addi- $100,000 or more.
tional catch-up contributions.
o Although we accept regular Roth IRA con-
tributions (limited to $3,000 for the
calendar year 2002) under Roth IRA con-
tracts, we intend that this contract be used
primarily for rollover and direct transfer
contributions.
o Additional catch-up contributions totalling
up to $500 can be made for the calendar
year 2002 where the owner is at least age
50 at any time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
FOR ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 78 o Direct transfers of pre-tax funds from o Additional rollover or direct transfer contri-
another contract or arrangement under butions may be made up to age 79.
Section 403(b) of the Internal Revenue
Code, complying with IRS Revenue Ruling o Rollover or direct transfer contributions
90-24. age 70-1/2 must be net of any required mini-
mum distributions.
o Eligible rollover distributions of pre-tax
funds from other 403(b) plans, qualified o Employer-remitted contributions are not
plans, governmental EDC plans and tradi- permitted.
tional IRAs.
- ------------------------------------------------------------------------------------------------------------------------------------
QP 20 through 70 o Only transfer contributions from an exist- o Regular ongoing payroll contributions are
ing qualified plan trust as a change of not permitted.
investment vehicle under the plan.
o Only one additional transfer contribution
o The plan must be qualified under Section may be made during a contract year.
401(a) of the Internal Revenue Code.
o No additional transfer contributions after
o For 401(k) plans, transferred contributions age 71.
may only include employee pre-tax
contributions. o For defined benefit plans, employee contri-
butions are not permitted and we will not
accept contributions that fund more than
80% of the actuarial value of the plan
participant/employee's normal retirement
benefit.
See Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Plus(SM) contracts with the
same annuitant would then total more than $1,500,000. We may also refuse to
accept any contribution if the sum of all contributions under all Equitable Life
annuity accumulation contracts that you own would then total more than
$2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A participant is an individual who is currently, or was formerly, participating
in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR VARIABLE INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
PORTFOLIOS OF THE TRUSTS
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Plus.SM These portfolios may even have the same manager(s) and/or a similar
name. However, there are numerous factors that can contribute to differences in
performance between two investments, particularly over short periods of time.
Such factors include the timing of stock purchases and sales; differences in
fund cash flows; and specific strategies employed by the portfolio manager.
- ----------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital Pacific Investment Management Company LLC
appreciation consistent with a
prudent level of risk
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLC
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital management L.P.
Institutional Capital Corporation
MFS Investment Management
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management LLC
TCW Investment Management Company
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and
increased income
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent Alliance Capital Management L.P.
with the Adviser's determination of reasonable risk
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income consistent Alliance Capital Management L.P.
Government Securities* with relative stability of principal
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P.
(including through its Bernstein
Investment Research and Management Unit)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current income, Alliance Capital Management L.P.
preserve its assets and maintain liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income consistent Alliance Capital Management L.P.
with moderate risk of capital
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Current Alliance Capital Management L.P.
income is incidental to the Portfolio's objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through both Alliance Capital Management L.P.
appreciation of capital and current income Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment
Research and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses that approximates Alliance Capital Management L.P.
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level
consistent with that of the S&P 500 Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management
Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return through a combina- Alliance Capital Management L.P.
tion of current income and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod- J.P. Morgan Investment Management, Inc.
erate risk of capital and maintenance of liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of capital Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth MFS Investment Management
Companies
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary MFS Investment Management
objective to seek reasonable current income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of capital and future MFS Investment Management
income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary Putnam Investment Management, LLC
Value objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and any increased Putnam Investment Management, LLC
income that results from this growth
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the Russell
2000 Index
- ------------------------------------------------------------------------------------------------------------------------------------
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to one or more, or all, of the variable
investment options. Allocations must be in whole percentages and you may change
your allocations at any time. However, the total of your allocations must equal
100%. Once contributions are allocated to the variable investment options they
become part of your account value. We discuss account value in "Determining
your contract's value."
CREDITS
A credit will also be allocated to your account value at the same time that we
allocate your contribution. Credits are allocated to the same variable
investment options based on the same percentages used to allocate your
contributions.
The amount of the credit will be 4%, 5% or 6% of each contribution based on the
following breakpoints and rules:
- -------------------------------------------------------------------------
CREDIT PERCENTAGE
FIRST YEAR TOTAL CONTRIBUTIONS* APPLIED TO
BREAKPOINTS CONTRIBUTIONS
- -------------------------------------------------------------------------
Less than $250,000 4%
- -------------------------------------------------------------------------
$250,000-$999,999.99 5%
- -------------------------------------------------------------------------
$1 million or more 6%
- -------------------------------------------------------------------------
- ----------------------
* First year total contributions means your total contributions made in the
first contract year.
The percentage of the credit is based on your first year total contributions.
This credit percentage will be credited to each contribution made in the first
year (after adjustment as described below), as well as the second and later
contract years. Although the credit, as adjusted at the end of the first
contract year, will be based upon first year total contributions, the following
rules affect the percentage with which contributions made in the first contract
year are credited during the first contract year:
o Indication of intent: If you indicate in the application at the time you
purchase your contract an intention to make a sufficient level of
contributions to meet one of the breakpoints (the "Expected First Year
Contribution Amount") and your initial contribution is at least 50% of the
Expected First Year Contribution Amount, your credit percentage will be as
follows:
o For any contributions resulting in total contributions to date less than
or equal to your Expected First Year Contribution Amount, the credit
percentage will be the percentage that applies to the Expected First Year
Contribution Amount based on the table above.
o For any subsequent contribution that results in your total contributions
to date exceeding your Expected First Year Contribution Amount, such that
the credit percentage should have been higher, we will increase the
credit percentage applied to that contribution, as well as any prior or
subsequent contributions made in the first contract year, accordingly.
o For contracts issued in New York, the "Indication of intent" approach to
first year contributions is not available.
o No indication of intent:
o For your initial contribution we will apply the credit percentage based
upon the above table.
o For any subsequent contribution that results in a higher applicable
credit percentage (based on total contributions to date), we will
increase the credit percentage applied to that contribution, as well as
any prior or subsequent contributions made in the first contract year,
accordingly.
We may recover all of the credit or a portion of the credit in the following
situations:
o If you exercise your right to cancel the contract, we will recover the entire
credit made to your contract (see "Your right to cancel within a certain
number of days" later in this Prospectus).
o If you start receiving annuity payments within three years of making any
contribution, we will recover the credit that applies to any contribution
made within the prior three years.
o If at the end of the first contract year your year total contributions were
lower than your Expected First Year Contribution Amount such that the
credit applied should have been lower, we will recover any Excess Credit.
The excess Credit is equal to the difference between the credit that was
actually applied based on your Expected First Year Contribution Amount (as
applicable) and the credit that should have been applied based on first
year total contributions.
We will recover any credit on a pro rata basis from the value in your variable
investment options.
We do not consider credits to be contributions for purposes of any discussion
in this prospectus. Credits are also not considered to be part of your
investment in the contract for tax purposes.
We use a portion of the mortality and expense risks charge and withdrawal
charge to help recover our cost of providing the credit. See "Charges and
expenses" later in this Prospectus. Under certain circumstances, the charge
associated with the credit may, over time, exceed the sum of the credit and any
related earnings. You should consider this possibility before purchasing the
contract.
GUARANTEED MINIMUM DEATH BENEFIT
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 78 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 70 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% (3% in Washington) roll up to age 80" or the
"annual ratchet to age 80" guaranteed minimum death benefit when you apply for
a contract.
5% (3% IN WASHINGTON) ROLL UP TO AGE 80. On the contract date, the guaranteed
minimum death benefit is equal to your initial contribution plus the credit.
Thereafter, the guaranteed minimum death benefit will be credited with interest
each day through the contract date anniversary following the annuitant's 80th
birthday. The effective annual interest rate is 5% except for amounts invested
in the AXA Premier VIP
Contract features and benefits 21
Core Bond, EQ/Alliance Intermediate Government Securities, EQ/Alliance Money
Market and EQ/Alliance Quality Bond options and amounts in the loan reserve
account (applicable to Rollover TSA contracts only). Amounts in the above
listed options and in the loan reserve account will be credited with interest
at a 3% effective annual rate.
No interest is credited to the benefit base after the contract date anniversary
following the annuitant's 80th birthday.
If you make additional contributions, we will increase your current guaranteed
minimum death benefit by the dollar amount of the additional contribution plus
the amount of the credit on the date the contribution is allocated to your
variable investment options. If you take a withdrawal from your contract, we
will adjust your guaranteed minimum death benefit for the withdrawal on the
date you take the withdrawal.
The 5% roll up to age 80 guaranteed minimum death benefit is not available in
all states.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution plus the credit. Then, on each
contract date anniversary, we will determine your guaranteed minimum death
benefit by comparing your current guaranteed minimum death benefit to your
account value on that contract date anniversary. If your account value is
higher than your guaranteed minimum death benefit, we will increase your
guaranteed minimum death benefit to equal your account value. On the other
hand, if your account value on the contract date anniversary is less than your
guaranteed minimum death benefit, we will not adjust your guaranteed minimum
death benefit either up or down.
If you make additional contributions, we will increase your current guaranteed
minimum death benefit by the dollar amount of the contribution plus the amount
of the credit on the date the contribution is allocated to your variable
investment options. If you take a withdrawal from your contract, we will reduce
your guaranteed minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR AN ANNUITANT THAT IS AGE 80 AT
ISSUE.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution plus the credit. Thereafter, it will be increased by the dollar
amount of any additional contributions plus the credit. We will adjust your
guaranteed minimum death benefit if you take any withdrawals.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum death benefit" in
"Accessing your money" later in this Prospectus for information on how
withdrawals affect your guaranteed minimum death benefit.
See Appendix III at the end of this Prospectus for an example of how we
calculate the guaranteed minimum death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract,
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus and in the
SAI for the potential tax consequences of electing to purchase the Protection
Plus feature in an NQ or IRA contract.
If the annuitant is 69 or younger when we issue your contract (or if the
successor owner/annuitant is 69 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
40% of the lesser of:
o the total net contributions or
o the death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including surrender charges). Credit amounts are not included in "net
contributions." Reduction on a pro rata basis means that we calculate the
percentage of the current account value that is being withdrawn and we reduce
net contributions by that percentage. For example, if the account value is
$30,000 and you withdraw $12,000, you have withdrawn 40% of your account value.
If contributions aggregated $40,000 before the withdrawal, it would be reduced
by $16,000 ($40,000 x .40) and net contributions after the withdrawal would be
$24,000 ($40,000-$16,000); (ii) "Death benefit" is equal to the greater of the
account value as of the date we receive satisfactory proof of death or any
applicable guaranteed minimum death benefit as of the date of death.
If the annuitant is age 70 through 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 70 and 75 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
25% of the lesser of:
22 Contract features and benefits
o the total net contributions (as described above) or
o the death benefit (as described above) less total net contributions
Protection Plus must be elected when the contract is first issued; neither the
owner nor the successor owner/annuitant can add it subsequently. Ask your
financial professional if this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification to cancel the contract and will reflect any
investment gain or loss in the variable investment options that also reflect
the daily charges we deduct through the date we receive your contract. Please
note that you will forfeit the credit by exercising this right of cancellation.
Some states require that we refund the full amount of your contribution (not
reflecting any investment gain or loss). For any IRA contract returned to us
within seven days after you receive it, we are required to refund the full
amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office or your financial professional can provide you with the
cancellation instructions.
Contract features and benefits 23
2. Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total value you have in the variable investment
options and in the loan reserve account (applies for Rollover TSA contracts
only). These amounts are subject to certain fees and charges discussed in
"Charges and expenses" later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value less: (i) any
applicable withdrawal charge and (ii) the amount of any outstanding loan plus
accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions plus the credit;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect transfer into, or decreased to reflect transfer
out of a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
Also, when we deduct the Protection Plus benefit charge, the number of units
credited to your contract will be reduced. A description of how unit values are
calculated is found in the SAI.
24 Determining your contract's value
3. Transferring your money among the variable investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the variable investment options.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Plus(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
DOLLAR COST AVERAGING YOUR ACCOUNT VALUE
Dollar cost averaging allows you to gradually transfer amounts from the
EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the variable
investment options you select. This will cause you to purchase more units if
the unit's value is low and fewer units if the unit's value is high. Therefore,
you may get a lower average cost per unit over the long term. This plan of
investing, however, does not guarantee that you will earn a profit or be
protected against losses.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
If your value in the EQ/Alliance Money Market option is at least $5,000, you
may choose, at any time, to have a specified dollar amount or percentage of
your value transferred from that option to the other variable investment
options. You can select to have transfers made on a monthly, quarterly or
annual basis. The transfer date will be the same calendar day of the month as
the contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the transfers
until all amounts in the EQ/Alliance Money Market option have been transferred
out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The dollar cost averaging program will then
end. You may change the transfer amount once each contract year or cancel this
program at any time.
You may not elect dollar cost averaging if you are participating in the
rebalancing program. There is no charge for the dollar cost averaging feature.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis)
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your
Transferring your money among the variable investment options 25
account value that you specify is invested in each option at the end of each
rebalancing date. Your entire account value must be included in the rebalancing
program.
- --------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the
dollar cost averaging program.
26 Transferring your money among the variable investment options
4. Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
- --------------------------------------------------------------------------------
METHOD OF WITHDRAWAL
--------------------------------------------------------------
LIFETIME
REQUIRED
SUBSTANTIALLY MINIMUM DIS-
CONTRACT LUMP SUM SYSTEMATIC EQUAL TRIBUTION
- --------------------------------------------------------------------------------
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Roth Con-
version IRA Yes Yes Yes No
- --------------------------------------------------------------------------------
Rollover
TSA* Yes Yes No Yes
- --------------------------------------------------------------------------------
QP Yes No No Yes
- --------------------------------------------------------------------------------
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity Contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions). The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
later in this Prospectus.
Lump sum withdrawals will be subject to a withdrawal charge if they exceed the
15% free withdrawal amount (see "15% free withdrawal amount" in "Charges and
expenses" later in this Prospectus). Under Rollover TSA contracts, if a loan is
outstanding, you may only take lump sum withdrawals as long as the cash value
remaining after any withdrawal equals at least 10% of the outstanding loan plus
accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA, Rollover IRA and Roth Conversion IRA contracts only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, the amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts only)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals based on the method you choose from the choices we offer. The
payments will be made monthly, quarterly or annually as you select. These
payments will continue until we receive written notice from you to cancel this
option, you have completed at least 5 years of payments and attained age 59-1/2
or you take a lump sum withdrawal. You may elect to start receiving
substantially equal withdrawals again, but the payments may not restart in the
same contract year in which you took a lump sum withdrawal. We will calculate
the new withdrawal amount.
Accessing your money 27
Substantially equal withdrawals are not subject to a withdrawal charge.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Rollover TSA and QP contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually. See the
"Required minimum distributions" section in "Tax information" in the SAI for
your specific type of retirement arrangement.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 15% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, Rollover TSA and QP contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed minimum death benefit on either a
dollar-for-dollar basis or on a pro rata basis as explained below:
5% (3% in Washington) roll up to age 80 -- If you elect the 5% roll up to age
80 guaranteed minimum death benefit, your current guaranteed minimum death
benefit will be reduced on a dollar-for-dollar basis as long as the sum of your
withdrawals in a contract year is 5% or less of the benefit base on the most
recent contract date anniversary. Once you take a withdrawal that causes the
sum of your withdrawals in a contract year to exceed 5% of the benefit base on
the most recent contract date anniversary, that withdrawal and any subsequent
withdrawals in that same contract year will reduce your current guaranteed
minimum death benefit on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum death
benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
benefit base and current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue age 80 -- If your contract was issued when the annuitant was
age 80, each withdrawal will always reduce your current guaranteed minimum
death benefit on a pro rata basis.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subjected to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI, for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of the loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amounts).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
28 Accessing your money
LOAN RESERVE ACCOUNT
On the date your loan is processed, we will transfer the amount of your loan to
the loan reserve account. Unless you specify otherwise, we will subtract your
loan on a pro rata basis from your value in the variable investment options.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records. Loan
repayments are not considered contributions and therefore are not eligible for
additional credits.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions). For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charge) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We also may defer payments for a reasonable amount of time (not to exceed 10
days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Plus(SM) offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue.
- --------------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- --------------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- --------------------------------------------------------------------------------
Income Manager payout Life annuity with period
options certain
Period certain annuity
- --------------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
Accessing your money 29
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide you with details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity payout option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator(R) Plus(SM).
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Plus(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Plus(SM). For the tax consequences of withdrawals, see "Tax
information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult you tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under your
Equitable Accumulator(R) Plus(SM) is imposed if you select a period certain. If
the period certain is more than 5 years, then the withdrawal charge deducted
will not exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under
the Equitable Accumulator(R) Plus(SM). If the withdrawal charge that otherwise
would have been applied to your account value under your Equitable
Accumulator(R) Plus(SM) is greater than 2% of the contributions that remain in
your contract at the time you purchase your payout option, the withdrawal
charges under the Income Manager will apply. The year in which your account
value is applied to the payout option will be "contract year 1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin, unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
five years from the contract date. Except with respect to Income Manager
annuity payout options, where payments are made on the 15th day of each month,
you can change the date your annuity payments are to begin anytime before that
date as long as you do not choose a date later than the 28th day of any month.
If you elect to start receiving annuity payments within three years of making
an additional contribution, we will recover the amount of any credit that
applies to that contribution.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 90th birthday.
30 Accessing your money
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- ----------------------------------------------------------
MAXIMUM
ISSUE AGE ANNUITIZATION AGE
- ----------------------------------------------------------
0-75 85
76 86
77 87
78-80 88
- ----------------------------------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
Accessing your money 31
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o At the time you make certain withdrawals or surrender your contract -- a
withdrawal charge.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your state.
An annuity administrative fee may also apply.
o A charge for Protection Plus, if you elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" later in this Prospectus.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect. A portion of this charge also
compensates us for the contract credit. For a discussion of the credit, see
"Credits" in "Contracts features and benefits" earlier in this Prospectus. We
expect to make a profit from this charge.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value. A portion of this charge also compensates us for the
contract credit. For a discussion of the credit, see "Credits" in "Contracts
features and benefits" earlier in this Prospectus. We expect to make a profit
from this charge.
The withdrawal charge equals a percentage of the contributions withdrawn. We do
not consider credits to be contributions. Therefore, there is no withdrawal
charge associated with a credit.
The percentage of the withdrawal charge that applies to each contribution
depends on how long each contribution has been invested in the contract. We
determine the withdrawal charge separately for each contribution according to
the following table:
- --------------------------------------------------------------------------------
Contract year
- --------------------------------------------------------------------------------
1 2 3 4 5 6 7 8 9+
- --------------------------------------------------------------------------------
Percentage of
contribution 8% 8% 7% 6% 5% 4% 3% 2% 0%
- --------------------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information" later in this Prospectus.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to the
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each variable investment option. The
withdrawal charge helps cover our sales expenses.
32 Charges and expenses
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
(i) The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
(ii) We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
(iii) The annuitant has been confined to a nursing home for more than 90 days
(or such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved
by Medicare as a provider of skilled nursing care service, or (b) licensed
as a skilled nursing home by the state or territory in which it is located
(it must be within the United States, Puerto Rico, or U.S. Virgin Islands)
and meets all of the following:
- -- its main function is to provide skilled, intermediate or custodial nursing
care;
- -- it provides continuous room and board to three or more persons;
- -- it is supervised by a registered nurse or licensed practical nurse;
- -- it keeps daily medical records of each patient;
- -- it controls and records all medications dispensed; and
- -- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions as described in (i), (ii)
and (iii) above existed at the time a contribution was remitted or if the
condition that began within 12 months of the period following remittance. Some
states may not permit us to waive the withdrawal charge in the above
circumstances or may limit the circumstances for which the withdrawal charge
may be waived. Your financial professional can provide more information or you
may contact our processing office.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.20% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment options on a
pro rata basis.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed by us varies by state and ranges from 0% to 3.5% (the
rate is 1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this Prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge or change the minimum initial
contribution requirements. We also may change the guaranteed minimum death
benefit or offer variable investment options that invest in shares of either
Trust that are not subject to the 12b-1 fee. If permitted under the terms of
our exemptive order regarding Accumulator(R) Plus(SM) bonus feature, we may also
change the crediting percentage that applies to contributions. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Charges and expenses 33
Group or sponsored arrangements may be governed by federal income tax rules,
the Employee Retirement Income Security Act of 1974 ("ERISA") or both. We make
no representations with regard to the impact of these and other applicable laws
on such programs. We recommend that employers, trustees and others purchasing
or making contracts available for purchase under such programs seek the advice
of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
34 Charges and expenses
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value or, if greater, the guaranteed
minimum death benefit. We determine the amount of the death benefit (other than
the guaranteed minimum death benefit) and any amount applicable under the
Protection Plus feature, as of the date we receive satisfactory proof of the
annuitant's death, any required instructions for the method of payment,
information and forms necessary to effect payment. The amount of the guaranteed
minimum death benefit will be the guaranteed minimum death benefit as of the
date of the annuitant's death, adjusted for any subsequent withdrawals (and any
associated withdrawal charges). Under Rollover TSA contracts, we will deduct
the amount of any outstanding loan plus accrued interest from the amount of the
death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually-owned IRA
contracts.
For individually-owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive the death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will
pay any cash five years after your death (or the death of the first owner
to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor owner/annuitant
feature, we will increase the account value to equal your guaranteed minimum
death benefit as of the date of your death if such death benefit is greater
than your account value, plus any
Payment of death benefit 35
amount applicable under the Protection Plus feature, and adjusted for any
subsequent withdrawals. The increase in the account value will be allocated to
the investment options according to the allocation percentages we have on file
for your contract. Thereafter, withdrawal charges will no longer apply to
contributions made before your death. Withdrawal charges will apply if
additional contributions are made. These additional contributions will be
considered to be withdrawn only after all other amounts have been withdrawn. In
determining whether the guaranteed minimum death benefit will continue to grow,
we will use your surviving spouse's age (as of the date we receive satisfactory
proof of your death, any required instructions and the information and forms
necessary to effect the successor owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death, under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months days following the date we receive proof
of your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the guaranteed minimum
death benefit as of the date of your death, if such death benefit is greater
than such account value, plus any amount applicable under the Protection Plus
feature, and adjusted for any subsequent withdrawals. The beneficiary
continuation option is available if we have received regulatory clearance in
your state. Where an IRA contract is owned in a custodial individual retirement
account, the custodian may reinvest the death benefit in an Accumulator(R)
Plus(SM) individual retirement annuity contract, using the account beneficiary
as the annuitant. Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The death benefit (including any guaranteed minimum death benefit)
provision will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected
by the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st on the 5th calendar year after your death.
36 Payment of death benefit
7. Tax information
- --------------------------------------------------------------------------------
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Plus(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions that can be made to all types of tax-favored retirement plans. In
addition to increasing amounts that can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator(R) Plus(SM) choice of death benefits dollar cost
averaging, selection of investment funds and choices of pay-out options, as
well as the features and benefits of other permissible funding vehicles and the
relative costs of annuities and other arrangements. You should be aware that
cost may vary depending on the features and benefits made available and the
charges and expenses of the investment options or funds that you elect. See
also Appendix II at the end of this Prospectus for a discussion of QP
contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
Tax information 37
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which is part of the contract and which should have no adverse tax effect, it
is possible that the IRS could take a contrary position or assert that the
Protection Plus rider is not part of the contract. In such a case the charges
for the Protection Plus rider could be treated for federal income tax purposes
as a partial withdrawal from the contract. If this were so, such a deemed
withdrawal could be taxable, and for contract owners under age 59-1/2, also
subject to a tax penalty. Were the IRS to take this position, Equitable would
take all reasonable steps to attempt to avoid this result, which would include
amending the contract (with appropriate notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Plus(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Plus(SM) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2, a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
included in your gross income for federal income tax purposes. Incidents of
investment control could include among other items, the number of investment
options available under a contract and/or the frequency of transfers available
under the contract. In connection with the issuance of regulations concerning
investment diversification in 1986, the Treasury Department announced that the
diversification regulations did not provide guidance on investor control but
that guidance would be issued in the form of regulations or rulings. As of the
date of this prospectus, no such guidance has been issued. It is not known
whether such guidelines, if in fact issued, would have retroactive adverse
effect on existing contracts. We cannot provide assurance
38 Tax information
as to the terms or scope of any future guidance nor any assurance that such
guidance would not be imposed on a retroactive basis to contracts issued under
this prospectus. We reserve the right to modify the contract as necessary to
attempt to prevent you from being considered the owner of the assets of the
separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets funding the account for the benefit of the IRA owner. The assets
typically include mutual funds and/or individual stocks and securities in a
custodial account, and bank certificates of deposit in a trusteed account. In
an individual retirement annuity, an insurance company issues an annuity
contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Plus(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Plus(SM) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such such formal approval, Equitable intends to
comply with such requirement during 2002.
PROTECTION Plus(SM) FEATURE
The Protection Plus feature is offered for IRA contracts, subject to state and
contract availability. The IRS approval of the Accumulator(R) Plus(SM) contract
as a traditional IRA and Roth IRA, respectively, noted in the paragraph above
does not include this optional Protection Plus feature. We have filed a request
with the IRS that the contract with the Protection Plus feature qualifies as to
form for use as a traditional IRA and Roth IRA, respectively. There is no
assurance that the contract with the Protection Plus feature meets the IRS
qualification requirements for IRAs. IRAs generally may not invest in life
insurance contracts. Although we view the optional Protection Plus benefit as an
investment protection feature which should have no adverse tax effect and not as
life insurance, it is possible that the IRS could take a contrary position
regarding tax qualification or assert that the Protection Plus rider is not a
permissible part of an individual retirement annuity contract. We further view
the optional Protection Plus benefit as part of the contract. There is also a
risk that the IRS may take the position that the optional Protection Plus
benefit is not part of the annuity contract. In such a case, the charges for the
Protection Plus rider could be treated for federal income tax purposes as a
partial withdrawal from the contract. If this were so, such a deemed withdrawal
could be taxable, and for contract owners under age 59-1/2, also subject to a
tax penalty. Were the IRS to take any adverse position, Equitable would take all
reasonable steps to attempt to avoid any adverse result, which would include
amending the contract (with appropriate notice to you). You should discuss with
your tax adviser whether you should consider purchasing an Accumulator(R)
Plus(SM) IRA or Accumulator(R) Plus(SM) Roth IRA with optional Protection Plus
feature.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
Tax information 39
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA , surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally, there are two types of funding vehicles available for 403(b)
arrangements -- an annuity contract under Section 403(b)(1) of the Internal
Revenue Code or a custodial account that invests only in mutual funds and which
is treated as an annuity contract under Section 403(b)(7) of the Code. Both
types of 403(b) arrangements qualify for tax deferral.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Plus(SM) Rollover TSA contract:
40 Tax information
o a rollover from another eligible retirement plan, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available..
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) Plus(SM) contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Plus(SM) Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Plus(SM) Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to the withdrawal restrictions may depend on the
source of the funds used to establish the Accumulator(R) Plus(SM) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" later in this Prospectus. In addition, TSA
distributions may be subject to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over an "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation of service, if later. These rules are discussed in greater detail
in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding
Tax information 41
in some cases. Generally, we do not have to withhold if your distributions are
not taxable. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of your distribution. Any income tax withheld
is a credit against your income tax liability. If you do not have sufficient
income tax withheld or do not make sufficient estimated income tax payments,
you may incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA to the extent it is reasonable for us to believe that a
distribution is includable in your gross income. This may result in tax
being withheld even though the Roth IRA distribution is ultimately not
taxable. You can elect out of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However, we may require additional documentation in the case of
payments made to non-United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 and Separate
Account No. 49 for taxes. We do not now, but may in the future set up reserves
for such taxes.
42 Tax information
8. More information
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ABOUT SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 45 and
Separate Account No. 49. We established Separate Account No. 45 in 1994 and
Separate Account No. 49 in 1996 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts. We are the legal owner of all of the
assets in Separate Account No. 45 and in Separate Account No. 49 and may
withdraw any amounts that exceed our reserves and other liabilities with
respect to variable investment options under our contracts. The results of
Separate Accounts' operations are accounted for without regard to Equitable
Life's other operations.
Each Separate Account is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or the Separate Accounts.
Each subaccount (variable investment option) within the Separate Accounts
invests solely in Class IB/B shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from either Separate Account, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate each Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against each Separate Account
or a variable investment option directly);
(5) to deregister the Separate Accounts under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Accounts; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999, EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to its
Class IB/B shares, and other aspects of its operations, appears in the
prospectuses for each Trust, which are attached at the end of this Prospectus,
or in the respective SAI's which are available upon request.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees, as well
as our general obligations. Credits allocated to your account value are funded
from our general account.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account. The disclosure with regard
to the general account, however, may be subject to certain provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be
More information 43
accompanied by information we require to allocate your contribution. Wire
orders not accompanied by complete information may be retained as described
under "How you can make your contributions" under "Contract features and
benefits" earlier in this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgment of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgment of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgment of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP contracts or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options. You choose the day of the month you wish to have your account debited.
However, you may not choose a date later than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS, CREDITS AND TRANSFERS
o Contributions and credits allocated to the variable investment options are
invested at the value next determined after the close of the business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in the prospectus for each Trust or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor
44 More information
events in order to identify any material irreconcilable conflicts that may
arise and to determine what action, if any, should be taken in response. If we
believe that a response to any of those events insufficiently protects our
contract owners, we will see to it that appropriate action is taken.
SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Accounts require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45 or Separate Account No. 49, our ability to meet
our obligations under the contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001 incorporated in this
prospectus by reference to the 2001 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45 and Separate Account No.
49, as well as consolidated financial statements of Equitable Life, are in the
applicable SAI. The SAI is available free of charge. You may request one by
writing to our processing office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of a Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. If your individual
retirement annuity contract is held in your custodial individual retirement
account, you may only assign or transfer ownership of such an IRA contract to
yourself. Loans are not available and you cannot assign Rollover IRA, Roth
Conversion IRA, and QP contracts as security for a loan or other obligation. If
the employer that provided the funds does not restrict them, loans are
available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules. In the case of such a transfer, we will impose
a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC and AXA Distributors,
LLC. For this purpose, AXA Advisors, LLC serves as the principal underwriter of
Separate Account No. 45, and AXA Distributors, LLC serves as the principal
underwriter of Separate Account No. 49. The offering of the contracts is
intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for sales and
marketing functions for the contracts funded through Separate Account No. 45.
AXA Advisors also acts as distributor for other Equitable Life annuity products
with different features, expenses and fees. AXA Advisors is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
These contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
DISTRIBUTION OF THE CONTRACTS BY AXA DISTRIBUTORS, LLC
AXA Distributors, LLC ("AXA Distributors"), an indirect, wholly owned
subsidiary of Equitable Life, has responsibility for sales and marketing
functions for the contracts funded through Separate Account No. 49. AXA
Distributors also acts as distributor for other Equitable Life annuity products
with different features, expenses, and fees. AXA Distributors is registered
with the SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Distributors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
AXA Distributors is the successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. Like AXA Distributors, Equitable
Distributors, Inc. was owned by Equitable Holdings, LLC.
More information 45
These contracts are sold by financial professionals of AXA Distributors, as
well as by affiliated and unaffiliated broker-dealers who have entered into
selling agreements with AXA Distributors. We pay broker-dealer sales
compensation that will generally not exceed an amount equal to 7% of total
contributions made under the contracts. AXA Distributors may also receive
compensation and reimbursement for its marketing services under the terms of
its distribution agreement with Equitable Life. Broker-dealers receiving sales
compensation will generally pay a portion of it to their financial professional
as commissions related to sales of the contracts. The offering of the contracts
is intended to be continuous.
46 More information
9. Investment performance
- --------------------------------------------------------------------------------
The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution plus a 4%
credit invested in the variable investment options for the periods shown.
The table takes into account all current fees and charges under the contract,
including the charge for Protection Plus, but does not reflect the charges
designed to approximate certain taxes imposed on us, such as premium taxes in
your state or any applicable annuity administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts will be offered
for the first time in 2002.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985, reflect the results of the variable investment options that preceded
them. The "Since portfolio inception" figures for these options are based on
the date of inception of the preceding variable investment options. We have
adjusted these results to reflect the maximum investment advisory fee payable
for the portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessor that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
We will indicate that a 4% credit is reflected when we show performance numbers
that give effect to the credit.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
Investment performance 47
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------- ------ ------- ----------
EQ/Aggressive Stock (31.44)% (5.36)% (4.86)%
EQ/Alliance Common Stock (16.67)% 7.92% 8.75%
EQ/Alliance Global (26.41)% 1.93% 2.58%
EQ/Alliance Growth Investors (18.59)% 5.43% 5.83%
EQ/Alliance Money Market (2.02)% 3.00% 3.16%
EQ/Alliance Premier Growth (30.20)% -- (14.28)%
EQ/Alliance Small Cap Growth (19.21)% -- 7.57%
EQ/Alliance Technology (30.69)% -- (39.74)%
EQ/Bernstein Diversified Value (2.50)% -- 3.73%
EQ/Capital Guardian International (27.05)% -- (6.97)%
EQ/Capital Guardian Research (7.73)% -- 1.23%
EQ/Capital Guardian U.S. Equity (7.72)% -- (0.95)%
EQ/Emerging Markets Equity (10.95)% -- (7.65)%
EQ/Equity 500 Index (18.12)% 8.15% 8.98%
EQ/Evergreen Omega (23.08)% -- (10.24)%
EQ/FI Mid Cap (19.39)% -- (14.46)%
EQ/FI Small/Mid Cap Value (1.58)% -- 5.01%
EQ/High Yield (4.97)% (2.28)% (1.56)%
EQ/International Equity Index (31.73)% -- (3.96)%
EQ/J.P. Morgan Core Bond 2.46% -- 4.48%
EQ/Janus Large Cap Growth (29.17)% -- (33.05)%
EQ/Lazard Small Cap Value 12.48% -- 5.07%
EQ/Mercury Basic Value Equity (0.01)% -- 12.09%
EQ/MFS Emerging Growth Companies (40.51)% -- 7.72%
EQ/MFS Investors Trust (22.02)% -- (6.20)%
EQ/MFS Research (28.00)% -- 4.11%
EQ/Putnam Growth & Income Value (12.64)% -- 3.63%
EQ/Putnam International Equity (27.70)% -- 6.32%
EQ/Putnam Voyager (30.70)% -- 5.17%
EQ/Small Company Index (3.56)% -- 1.64%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- --------------------------- ------- ------- -------- -----------
EQ/Aggressive Stock (11.69)% (5.36)% 2.47% 10.36%
EQ/Alliance Common Stock (4.41)% 7.92% 10.98% 12.04%
EQ/Alliance Global (6.70)% 1.93% 6.93% 7.08%
EQ/Alliance Growth Investors (1.93)% 5.43% 7.35% 10.28%
EQ/Alliance Money Market 2.11% 3.00% 3.03% 4.80%
EQ/Alliance Premier Growth -- -- -- (14.28)%
EQ/Alliance Small Cap Growth 5.43% -- -- 7.57%
EQ/Alliance Technology -- -- -- (39.74)%
EQ/Bernstein Diversified Value (1.25)% -- -- 3.73%
EQ/Capital Guardian International -- -- -- (6.97)%
EQ/Capital Guardian Research -- -- -- 1.21%
EQ/Capital Guardian U.S. Equity -- -- -- (0.95)%
EQ/Emerging Markets Equity 0.94% -- -- (11.96)%
EQ/Equity 500 Index (4.58)% 8.15% -- 11.91%
EQ/Evergreen Omega (10.23)% -- -- (10.23)%
EQ/FI Mid Cap -- -- -- (15.16)%
EQ/FI Small/Mid Cap Value 0.94% -- -- 1.90%
EQ/High Yield (7.06)% (2.28)% 5.34% 5.57%
EQ/International Equity Index (11.10)% -- -- (3.95)%
EQ/J.P. Morgan Core Bond 3.19% -- -- 4.47%
EQ/Janus Large Cap Growth -- -- -- (33.59)%
EQ/Lazard Small Cap Value 10.00% -- -- 5.07%
EQ/Mercury Basic Value Equity 9.56% -- -- 12.09%
EQ/MFS Emerging Growth Companies (5.37)% -- -- 7.72%
EQ/MFS Investors Trust (6.20)% -- -- (6.20)%
EQ/MFS Research (6.02)% -- -- 4.11%
EQ/Putnam Growth & Income Value (3.50)% -- -- 3.63%
EQ/Putnam International Equity 0.61% -- -- 6.32%
EQ/Putnam Voyager (10.02)% -- -- 5.17%
EQ/Small Company Index 3.38% -- -- 1.63%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October
16, 1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity,
EQ/MFS Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity and EQ/Putnam Voyager
(May 1, 1997); EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap
Value and EQ/Janus Large Cap Growth (September 5, 2000); EQ/Balanced (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Growth and Income, EQ/Alliance
International, EQ/Alliance Quality Bond, EQ/AXP New Dimensions and EQ/AXP
Strategy Aggressive (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Calvert Socially Responsible (September 1, 1999); EQ/Alliance Technology
(May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid
Cap and EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus
(August 31, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care,
AXA Premier VIP International Equity, AXA Premier VIP Large Cap Core
Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value,
AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value
and AXA Premier VIP Technology (December 31, 2001). No performance
information is provided for portfolios and/or variable investment options
with inception dates after December 31, 2000.
48 Investment performance
TABLE FOR SEPARATE ACCOUNT 45
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------- ------ ------- ----------
EQ/Aggressive Stock (31.44)% (5.36)% 2.29%
EQ/Alliance Common Stock (16.67)% 7.92% 12.53%
EQ/Alliance Global (26.41)% 1.93% 5.60%
EQ/Alliance Growth and Income (7.26)% 12.32% 14.39%
EQ/Alliance Growth Investors (18.59)% 5.43% 8.40%
EQ/Alliance Intermediate Government Securities 2.40% 4.31% 4.76%
EQ/Alliance International (29.52)% (5.04)% (1.12)%
EQ/Alliance Money Market (2.02)% 3.00% 3.35%
EQ/Alliance Premier Growth (30.20)% -- (14.28)%
EQ/Alliance Small Cap Growth (19.21)% -- 7.57%
EQ/Alliance Technology (30.69)% -- (39.74)%
EQ/AXP New Dimensions (21.55)% -- (28.14)%
EQ/AXP Strategy Aggressive (39.92)% -- (54.53)%
EQ/Capital Guardian Research (7.73)% -- 1.23%
EQ/Capital Guardian U.S. Equity (7.72)% -- (0.95)%
EQ/Emerging Markets Equity (10.95)% -- (10.38)%
EQ/Equity 500 Index (18.12)% 8.15% 12.24%
EQ/Evergreen Omega (23.08)% -- (10.24)%
EQ/FI Mid Cap (19.39)% -- (14.46)%
EQ/FI Small/Mid Cap Value (1.58)% -- 1.90%
EQ/High Yield (4.97)% (2.28)% 2.92%
EQ/International Equity Index (31.73)% -- (3.96)%
EQ/Janus Large Cap Growth (29.17)% -- (33.05)%
EQ/Mercury Basic Value Equity (0.01)% -- 12.09%
EQ/MFS Emerging Growth Companies (40.51)% -- 7.72%
EQ/MFS Investors Trust (22.02)% -- (6.20)%
EQ/MFS Research (28.00)% -- 4.11%
EQ/Putnam Growth & Income Value (12.64)% -- 3.63%
EQ/Small Company Index (3.56)% -- 1.64%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- --------------------------- ------- ------- -------- -----------
EQ/Aggressive Stock (11.69)% (5.36)% 2.47% 10.36%
EQ/Alliance Common Stock (4.41)% 7.92% 10.98% 12.04%
EQ/Alliance Global (6.70)% 1.93% 6.93% 7.08%
EQ/Alliance Growth and Income 5.67% 12.32% -- 11.94%
EQ/Alliance Growth Investors (1.93)% 5.43% 7.35% 10.28%
EQ/Alliance Intermediate Government Securities 2.86% 4.31% 4.28% 4.95%
EQ/Alliance International (9.98)% (5.04)% -- (0.93)%
EQ/Alliance Money Market 2.11% 3.00% 3.03% 4.80%
EQ/Alliance Premier Growth -- -- -- (14.28)%
EQ/Alliance Small Cap Growth 5.43% -- -- 7.57%
EQ/Alliance Technology -- -- -- (39.74)%
EQ/AXP New Dimensions -- -- -- (28.95)%
EQ/AXP Strategy Aggressive -- -- -- (55.35)%
EQ/Capital Guardian Research -- -- -- 1.21%
EQ/Capital Guardian U.S. Equity -- -- -- (0.95)%
EQ/Emerging Markets Equity 0.94% -- -- (11.96)%
EQ/Equity 500 Index (4.58)% 8.15% -- 11.91%
EQ/Evergreen Omega (10.23)% -- -- (10.23)%
EQ/FI Mid Cap -- -- -- (15.16)%
EQ/FI Small/Mid Cap Value 0.94% -- -- 1.90%
EQ/High Yield (7.06)% (2.28)% 5.34% 5.57%
EQ/International Equity Index (11.10)% -- -- (3.95)%
EQ/Janus Large Cap Growth -- -- -- (33.59)%
EQ/Mercury Basic Value Equity 9.56% -- -- 12.09%
EQ/MFS Emerging Growth Companies (5.37)% -- -- 7.72%
EQ/MFS Investors Trust (6.20)% -- -- (6.20)%
EQ/MFS Research (6.02)% -- -- 4.11%
EQ/Putnam Growth & Income Value (3.50)% -- -- 3.63%
EQ/Small Company Index 3.38% -- -- 1.63
* The variable option inception dates are: EQ/Aggressive Stock, EQ/Alliance
Common Stock, EQ/Alliance Global, EQ/Alliance Growth and Income,
EQ/Alliance Growth Investors, EQ/Alliance Intermediate Government
Securities, EQ/Alliance International, EQ/Alliance Money Market, EQ/Equity
500 Index and EQ/High Yield (May 1, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research and EQ/Putnam Growth & Income Value (May
1, 1997); EQ/Emerging Markets Equity (September 2, 1997); EQ/International
Equity Index and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian Research and EQ/Capital Guardian U.S. Equity
(May 1, 1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions,
EQ/AXP Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth
(September 5, 2000); EQ/Balanced and EQ/Bernstein Diversified Value (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Quality Bond, EQ/Capital Guardian
International, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (January 14,
2002). No performance information is provided for portfolios and/or
variable investment options with inception dates after December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
Investment performance 49
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's
Morningstar's Variable Annuity Sourcebook
Business Week
Forbes
Fortune
Institutional Investor
Money
Kiplinger's Personal Finance
Financial Planning
Investment Adviser
Investment Management Weekly
Money Management Letter Investment Dealers Digest
National Underwriter
Pension & Investments
USA Today
Investor's Business Daily
The New York Times
The Wall Street Journal
The Los Angeles Times
The Chicago Tribune
- --------------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any changes
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper, the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) Plus(SM) performance relative to other variable
annuity products. The Lipper Survey contains two different universes, which
reflect different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
withdrawal charge, the optional Protection Plus benefit charge and any charge
designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. For more information, see "Yield Information for
the EQ/Alliance Money Market Option, EQ/Alliance Quality Bond Option and
EQ/High Yield Option" in the SAI.
50 Investment performance
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Accounts No. 45 and No. 49 with the same daily asset
charges of 1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001
For the years ending December 31,
---------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
EQ/Aggressive Stock
Unit value $ 49.16 $ 66.77 $ 78.30 $ 67.13 $ 68.19
Separate Account 45 number of units outstanding (000's) 73 65 16 -- --
Separate Account 49 number of units outstanding (000's) 402 420 141 16 --
EQ/Alliance Common Stock
Unit value $203.81 $ 232.08 $ 275.01 $ 223.79 $ 176.22
Separate Account 45 number of units outstanding (000's) 380 310 66 -- --
Separate Account 49 number of units outstanding (000's) 661 618 255 35 1
EQ/Alliance Global
Unit value $ 26.96 $ 34.37 $ 43.04 -- --
Separate Account 45 number of units outstanding (000's) 726 602 97 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
EQ/Alliance Growth and Income
Unit value $ 25.00 $ 25.80 $ 24.13 -- --
Separate Account 45 number of units outstanding (000's) 3,407 1,662 342 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
EQ/Alliance Growth Investors
Unit value $ 33.29 $ 38.72 $ 42.29 -- --
Separate Account 45 number of units outstanding (000's) 933 792 149 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
EQ/Alliance Intermediate Government Securities
Unit value $ 16.72 $ 15.75 $ 14.70 -- --
Separate Account 45 number of units outstanding (000's) 2,545 486 59 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
EQ/Alliance International
Unit value $ 9.48 $ 12.56 $ 16.61 -- --
Separate Account 45 number of units outstanding (000's) 404 302 38 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
EQ/Alliance Money Market
Unit value $ 27.16 $ 26.65 $ 25.55 $ 24.80 $ 23.98
Separate Account 45 number of units outstanding (000's) 3,954 1,882 549 -- --
Separate Account 49 number of units outstanding (000's) 13,759 9,875 5,805 349 --
EQ/Alliance Premier Growth
Unit value $ 7.07 $ 9.45 $ 11.77 -- --
Separate Account 45 number of units outstanding (000's) 5,608 4,909 1,112 -- --
Separate Account 49 number of units outstanding (000's) 18,765 17,412 5,630 -- --
EQ/Alliance Small Cap Growth
Unit value $ 14.11 $ 16.53 $ 14.78 $ 11.77 $ 12.52
Separate Account 45 number of units outstanding (000's) 1,276 718 30 -- --
Separate Account 49 number of units outstanding (000's) 3,423 3,189 818 211 --
EQ/Alliance Technology
Unit value $ 4.91 $ 6.60 -- -- --
Separate Account 45 number of units outstanding (000's) 3,001 1,672 -- -- --
Separate Account 49 number of units outstanding (000's) 7,562 5,505 -- -- --
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
For the years ending December 31,
---------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
EQ/AXP New Dimensions
Unit value $ 6.88 $ 8.28 -- -- --
Separate Account 45 number of units outstanding (000's) 213 29 -- -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
EQ/AXP Strategy Aggressive
Unit value $ 4.06 $ 6.21 -- -- --
Separate Account 45 number of units outstanding (000's) 252 66 -- -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
EQ/Balanced
Unit value $39.15 -- -- -- --
Separate Account 45 number of units outstanding (000's) 1,005 -- -- -- --
Separate Account 49 number of units outstanding (000's) 97 -- -- -- --
EQ/Bernstein Diversified Value
Unit value $11.78 $ 11.61 $ 12.04 $ 11.81 --
Separate Account 45 number of units outstanding (000's) 1,138 -- -- -- --
Separate Account 49 number of units outstanding (000's) 6,000 3,700 1,532 315 --
EQ/Calvert Socially Responsible
Unit value $ 8.62 -- -- -- --
Separate Account 45 number of units outstanding (000's) 6 -- -- -- --
Separate Account 49 number of units outstanding (000's) 13 -- -- -- --
EQ/Capital Guardian International
Unit value $ 8.64 $ 11.09 $ 13.93 -- --
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 5,697 5,514 1,286 -- --
EQ/Capital Guardian Research
Unit value $10.65 $ 11.04 $ 10.60 -- --
Separate Account 45 number of units outstanding (000's) 166 112 13 -- --
Separate Account 49 number of units outstanding (000's) 3,151 2,953 987 -- --
EQ/Capital Guardian U. S. Equity
Unit value $10.09 $ 10.46 $ 10.26 -- --
Separate Account 45 number of units outstanding (000's) 337 155 31 -- --
Separate Account 49 number of units outstanding (000's) 6,886 5,538 2,436 -- --
EQ/Emerging Markets Equity
Unit value $ 6.04 $ 6.47 $ 10.97 $ 5.70 --
Separate Account 45 number of units outstanding (000's) 821 715 126 -- --
Separate Account 49 number of units outstanding (000's) 3,043 2,958 962 203 --
EQ/Equity 500 Index
Unit value $23.93 $ 27.69 -- -- --
Separate Account 45 number of units outstanding (000's) 1,038 734 -- -- --
Separate Account 49 number of units outstanding (000's) 6,601 6,057 -- -- --
EQ/Evergreen Omega
Unit value $ 7.66 $ 9.38 $ 10.80 -- --
Separate Account 45 number of units outstanding (000's) 90 17 8 -- --
Separate Account 49 number of units outstanding (000's) 141 78 6 -- --
EQ/FI Mid Cap
Unit value $ 8.51 $ 9.99 $ 10.45 -- --
Separate Account 45 number of units outstanding (000's) 932 126 -- -- --
Separate Account 49 number of units outstanding (000's) 2,644 617 -- -- --
EQ/FI Small/Mid Cap Value
Unit value $11.07 $ 10.82 $ 10.45 -- --
Separate Account 45 number of units outstanding (000's) 1,487 87 18 -- --
Separate Account 49 number of units outstanding (000's) 2,090 251 -- -- --
A-2 Appendix I: Condensed financial information
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
For the years ending December 31,
---------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
EQ/High Yield
Unit value $ 22.86 $ 23.07 $ 25.73 $ 27.12 $ 29.13
Separate Account 45 number of units outstanding (000's) 500 219 35 -- --
Separate Account 49 number of units outstanding (000's) 1,835 1,211 574 170 2
EQ/International Equity Index
Unit value $ 8.81 $ 12.02 $ 14.82 $ 11.82 --
Separate Account 45 number of units outstanding (000's) 254 147 33 -- --
Separate Account 49 number of units outstanding (000's) 2,518 2,531 992 248 --
EQ/J.P. Morgan Core Bond
Unit value $ 12.10 $ 11.40 $ 10.39 $ 10.73 --
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 10,537 5,112 2,026 379 --
EQ/Janus Large Cap Growth
Unit value $ 6.36 $ 8.39 -- -- --
Separate Account 45 number of units outstanding (000's) 1,187 295 -- -- --
Separate Account 49 number of units outstanding (000's) 3,856 1,315 -- -- --
EQ/Lazard Small Cap Value
Unit value $ 12.37 $ 10.68 $ 9.15 $ 9.14 --
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 3,274 2,109 98 344 --
EQ/Marsico Focus
Unit value $ 11.33 -- -- -- --
Separate Account 45 number of units outstanding (000's) 24 -- -- -- --
Separate Account 49 number of units outstanding (000's) 78 -- -- -- --
EQ/Mercury Basic Value Equity
Unit value $ 17.00 $ 16.37 $ 14.88 $ 12.71 $ 11.58
Separate Account 45 number of units outstanding (000's) 1,305 431 163 -- --
Separate Account 49 number of units outstanding (000's) 1,559 1,079 173 -- --
EQ/MFS Emerging Growth Companies
Unit value $ 14.20 $ 21.88 $ 27.40 $ 16.03 $ 12.11
Separate Account 45 number of units outstanding (000's) 1,966 1,834 383 -- --
Separate Account 49 number of units outstanding (000's) 5,707 5,759 1,680 200 2
EQ/MFS Investors Trust
Unit value $ 8.64 $ 10.45 $ 10.70 -- --
Separate Account 45 number of units outstanding (000's) 543 359 103 -- --
Separate Account 49 number of units outstanding (000's) 8,655 7,052 2,906 -- --
EQ/MFS Research
Unit value $ 12.18 $ 15.84 $ 16.99 $ 14.02 $ 11.48
Separate Account 45 number of units outstanding (000's) 860 712 71 -- --
Separate Account 49 number of units outstanding (000's) 6,188 5,917 1,725 410 1
EQ/Putnam Growth & Income Value
Unit value $ 11.94 $ 13.02 $ 12.39 $ 12.76 $ 11.50
Separate Account 45 number of units outstanding (000's) 287 124 12 -- --
Separate Account 49 number of units outstanding (000's) 4,156 1,755 978 714 17
EQ/Putnam International Equity
Unit value $ 13.39 $ 17.34 $ 20.10 $ 12.75 $ 10.84
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 3,126 2,033 771 422 4
EQ/Putnam Investors Growth
Unit value $ 12.75 $ 17.16 $ 21.20 $ 16.54 $ 12.33
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 2,221 1,658 576 282 --
Appendix I: Condensed financial information A-3
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
For the years
ending December 31,
-------------------
2001 2000
---- ----
EQ/Small Company Index
Unit value $ 10.90 $ 10.86
Separate Account 45 number of units outstanding (000's) 239 113
Separate Account 49 number of units outstanding (000's) 1,535 1,382
EQ/T. Rowe Price International Stock
Unit value $ 8.71 $ 11.32
Separate Account 45 number of units outstanding (000's) 614 368
Separate Account 49 number of units outstanding (000's) -- --
For the years
ending December 31,
-------------------
1999 1998 1997
---- ---- ----
EQ/Small Company Index
Unit value $ 11.42 $ 9.61 --
Separate Account 45 number of units outstanding (000's) 23 -- --
Separate Account 49 number of units outstanding (000's) 522 211 --
EQ/T. Rowe Price International Stock
Unit value $ 14.15 -- --
Separate Account 45 number of units outstanding (000's) 37 -- --
Separate Account 49 number of units outstanding (000's) -- -- --
A-4 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
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Trustees who are considering the purchase of an Equitable Accumulator(R)
Plus(SM) QP contract should discuss with their tax advisers whether this is an
appropriate investment vehicle for the employer's plan. Trustees should consider
whether the plan provisions permit the investment of plan assets in the QP
contract, the distribution of such an annuity and the payment of death benefits
in accordance with the requirements of the federal income tax rules. The QP
contract and this prospectus should be reviewed in full, and the following
factors, among others, should be noted. Assuming continued plan qualification
and operation, earnings on qualified plan assets will accumulate value on a
tax-deferred basis even if the plan is not funded by the Equitable
Accumulator(R) Plus(SM) QP contract or another annuity. Therefore, you should
purchase an Equitable Accumulator(R) Plus(SM) QP contract to fund a plan for the
contract's features and benefits other than tax deferral, after considering the
relative costs and benefits of annuity contracts and other types of arrangements
and funding vehicles. This QP contract accepts transfer contributions only and
not regular, ongoing payroll contributions. For 401(k) plans under defined
contribution plans, no employee after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that the QP contract
may not be appropriate purchase for annuitants approaching or over age 70-1/2.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Guaranteed minimum death benefit example
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The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market or EQ/Alliance Quality Bond
options), no additional contributions, no transfers, no withdrawals and no
loans under a Rollover TSA contract the guaranteed minimum death benefit for an
annuitant age 45 would be calculated as follows:
5% roll up to age 80 guaranteed Annual ratchet to age 80 guaranteed
End of contract year Account value minimum death benefit(1) minimum death benefit
-------------------- ------------- ------------------------ ---------------------
1 $105,000 $ 105,000(1) $ 105,000(3)
2 $115,500 $ 110,250(2) $ 115,500(3)
3 $129,360 $ 115,763(2) $ 129,360(3)
4 $103,488 $ 121,551(1) $ 129,360(4)
5 $113,837 $ 127,628(1) $ 129,360(4)
6 $127,497 $ 134,010(1) $ 129,360(4)
7 $127,497 $ 140,710(1) $ 129,360(4)
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80*
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the guaranteed minimum death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current guaranteed minimum death
benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is the guaranteed minimum death benefit at the end of the prior
year since it is equal to or higher than the current account value.
- ----------
* If your contract is issued in the state of Washington, the applicable
crediting rate would be 3%, and, therefore, the values shown would be lower.
Appendix III: Guaranteed minimum death benefit example C-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 22
Yield Information for the EQ/Alliance Money Market
Option, EQ/Alliance Quality Bond Option and EQ/High
Yield Option 22
Distribution of the contracts 24
Financial Statements 24
How to obtain an Equitable Accumulator(R) Plus(SM) Statement of Additional
Information for
Separate Account No. 45 or Separate Account No. 49
Send this request form to:
Equitable Accumulator(R) Plus(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
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Please send me an Equitable Accumulator(R) Plus(SM) SAI dated May 1, 2002.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
(SAI 10AMLF(05/02))
Equitable Accumulator(R) Elite(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) ELITE(SM)?
Equitable Accumulator(R) Elite(SM) is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
This contract may not currently be available in all states.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager(2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
- --------------------------------------------------------------------------------
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 45 and
Separate Account No. 49. Each variable investment option, in turn, invests in a
corresponding securities portfolio of EQ Advisors Trust or AXA Premier VIP
Trust (the "Trusts"). Your investment results in a variable investment option
will depend on the investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined contribution
or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $10,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
X00291
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) ELITE(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Elite(SM) at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 21
Your benefit base 22
Annuity purchase factors 22
Our baseBUILDER option 22
Guaranteed minimum death benefit 23
Your right to cancel within a certain number of days 24
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 26
- --------------------------------------------------------------------------------
Your account value and cash value 26
Your contract's value in the variable investment options 26
Your contract's value in the fixed maturity options 26
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 27
- --------------------------------------------------------------------------------
Transferring your account value 27
Disruptive transfer activity 27
Dollar cost averaging 27
Rebalancing your account value 27
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 29
- --------------------------------------------------------------------------------
Withdrawing your account value 29
How withdrawals are taken from your account value 30
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 30
Loans under Rollover TSA contracts 30
Surrendering your contract to receive its cash value 31
When to expect payments 31
Your annuity payout options 31
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 34
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 34
Charges that the Trusts deduct 35
Group or sponsored arrangements 35
Other distribution arrangements 36
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 37
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 37
How death benefit payment is made 37
Beneficiary continuation option 38
- --------------------------------------------------------------------------------
7. TAX INFORMATION 39
- --------------------------------------------------------------------------------
Overview 39
Buying a contract to fund a retirement arrangement 39
Transfers among investment options 39
Taxation of nonqualified annuities 39
Individual retirement arrangements (IRAs) 41
Special rules for contracts funding qualified plans 42
Tax-Sheltered Annuity contracts (TSAs) 42
Federal and state income tax withholding and
information reporting 43
Impact of taxes to Equitable Life 44
- --------------------------------------------------------------------------------
8. MORE INFORMATION 45
- --------------------------------------------------------------------------------
About Separate Account No. 45 and Separate Account No. 49 45
About the Trusts 45
About our fixed maturity options 45
About the general account 46
About other methods of payment 47
Dates and prices at which contract events occur 47
About your voting rights 47
About legal proceedings 48
About our independent accountants 48
Financial statements 48
Transfers of ownership, collateral assignments, loans
and borrowing 48
Distribution of the contracts 48
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9. INVESTMENT PERFORMANCE 50
- --------------------------------------------------------------------------------
Communicating performance data 53
- --------------------------------------------------------------------------------
10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 54
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
Page in
Term Prospectus
account value 26
annuitant 15
annuity payout options 31
annuity purchase factors 22
baseBUILDER 22
beneficiary 37
benefit base 22
business day 47
cash value 26
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 41
regular contributions 41
rollovers and direct transfers 41
conversion contributions 42
contributions to traditional IRAs 41
regular contributions 41
rollovers and transfers 41
disruptive transfer activity 27
EQAccess 6
ERISA 30
fixed maturity options 21
guaranteed minimum death benefit 23
guaranteed minimum income benefit 22
IRA cover
IRS 39
investment options 17
loan reserve account 31
market adjusted amount 21
market timing 27
market value adjustment 21
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 41
SAI cover
SEC cover
TOPS 6
TSA 42
traditional IRA 41
Trusts cover
unit 26
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your financial professional can provide further explanation about
your contract or supplemental materials.
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
FOR CONTRIBUTIONS SENT BY REGULAR MAIL
Equitable Accumulator(R) Elite(SM)
P.O. Box 13014
Newark, NJ 07188-0014
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY
Equitable Accumulator(R) Elite(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR
MAIL
Equitable Accumulator(R) Elite(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY
Equitable Accumulator(R) Elite(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
REPORTS WE PROVIDE:
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options (not available through
EQAccess);
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith, or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
CUSTOMER SERVICE REPRESENTATIVE:
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA
contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests
would normally be the owner. If there are joint owners
all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Elite(SM) at a glance -- key features
- --------------------------------------------------------------------------------
PROFESSIONAL INVESTMENT Equitable Accumulator(R) Elite(SM)'s variable investment options invest in different portfolios managed
MANAGEMENT by professional investment advisers.
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY OPTIONS o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
--------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any value
that you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
- ------------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
--------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), you should be
aware that such annuities do not provide tax deferral benefits beyond those already provided by the
Internal Revenue Code. Before purchasing one of these annuities, you should consider whether its
features and benefits beyond tax deferral meet your needs and goals. You may also want to consider the
relative features, benefits and costs of these annuities compared with any other investment that you may
use in connection with your retirement plan or arrangement. (For more information, see "Tax
information," later in this Prospectus and in the SAI.)
- ------------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER(R) PROTECTION baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum death benefit
provided under the contract. The guaranteed minimum income benefit provides income protection for you
while the annuitant lives. The guaranteed minimum death benefit provides a death benefit for the
beneficiary should the annuitant die.
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $10,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract. You may
also incur income tax and a tax penalty.
- ------------------------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing home
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
- ------------------------------------------------------------------------------------------------------------------------------------
8 Equitable Accumulator(R) Elite(SM) at a glance -- key features
FEES AND CHARGES o Daily charges on amounts
invested in the variable
investment options for
mortality and expense risks,
administrative charges and
distribution charges at an
annual rate of 1.60%.
o Annual 0.30% benefit base
charge for the optional
baseBUILDER benefit until you
exercise your guaranteed
minimum income benefit, elect
another annuity payout option
or the contract date
anniversary after the
annuitant reaches age 85 (age
83 in Oregon), whichever occurs
first. The benefit base is
described under
"Your benefit base" in
"Contract features and
benefits" later in this
Prospectus. If you don't elect
baseBUILDER, you still receive
a guaranteed minimum death
benefit under your contract at
no additional
charge.
o Annual 0.20% Protection Plus
charge for this optional death
benefit.
o No sales charge deducted at
the time you make
contributions. During the first
three contract years following
a
contribution, a charge will be
deducted from amounts that you
withdraw that exceed 10% of
your account
value. We use the account value
on the most recent contract
date anniversary to calculate
the 10% amount
available. The charge is 8%.
There is no withdrawal charge
in the fourth and later
contract years following a
contribution.
-------------------------------
The "contract date" is the
effective date of a contract.
This usually is the business
day we receive the properly
completed and signed
application, along with any
other required documents, and
your initial contribution. Your
contract date will be shown in
your
contract. The 12-month period
beginning on your contract date
and each 12-month period after
that date is a "contract year."
The
end of each 12-month period is
your "contract date
anniversary."
-------------------------------
o We deduct a charge designed
to approximate certain taxes
that may be imposed on us, such
as premium
taxes in your state. This
charge is generally deducted
from the amount applied to an
annuity payout option.
o We deduct a $350 annuity
administrative fee from amounts
applied to the Variable
Immediate Annuity
payout options.
o Annual expenses of the
Trust's portfolios are
calculated as a percentage of
the average daily net assets
invested in each portfolio.
These expenses include
management fees ranging from
0.25% to 1.20% annually,
12b-1 fees of 0.25% annually
and other expenses.
- --------------------------------------------------------------------------------
Annuitant issue ages NQ: 0-85
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-85
QP: 20-75
- --------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Elite(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this Prospectus.
The fixed maturity options are not covered by the fee table and examples.
However, the withdrawal charge does apply to the fixed maturity options. A
market value adjustment (up or down) may apply as a result of a withdrawal,
transfer or surrender of amounts from a fixed maturity option.
- -------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%
Administrative 0.25%
Distribution 0.25%
-----
Total annual expenses 1.60%
- -------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions (deducted if you Contract
surrender your contract or make certain withdrawals in any of the first year
three years after we receive a contribution. For each contribution, we 1 8.00%
consider the contract year in which we receive that contribution to be 2 8.00%
"contract year 1")(2) 3 8.00%
4+ 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- -------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- -------------------------------------------------------------------------------------------------------------------
baseBUILDER BENEFIT CHARGE (calculated as a percentage of the
benefit base. Deducted annually on each contract date anniversary)(3) 0.30%
- -------------------------------------------------------------------------------------------------------------------
PROTECTION PLUS BENEFIT CHARGE (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary) 0.20%
- -------------------------------------------------------------------------------------------------------------------
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- -----------------------------------------------------------------------------------------------------------------------------
Net
Total Annual
Management Fees Other Expenses Expenses (After
(After Expense (After Expense Expense
Portfolio Name Limitation)(4) 12B-1 Fees(5) Limitation)(6) Limitation)(7)
- -----------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- -----------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- -----------------------------------------------------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal
amount and upon surrender of a contract.
(3) The benefit base is described under "Contract features and benefits -- Your
guaranteed minimum income benefit under baseBUILDER" later in this
Prospectus.
Fee table 11
(4) The management fees for each portfolio cannot be increased without a vote
of each portfolio's shareholders. See footnote (7) for any expense
limitation agreement information.
(5) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(6) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Initial seed capital was invested for the Portfolios
of the AXA Premier VIP Trust on December 31, 2001, thus, "Other Expenses"
shown are estimated. See footnote (7) for any expense limitation
agreements information.
(7) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
AXA PREMIER VIP TRUST:
- ----------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- ----------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ----------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- ----------------------------------------------------------------------------
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
-------------- --------------- ---------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- --------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected baseBUILDER with a 5% roll up to age 80 or annual ratchet to age 80
guaranteed minimum death benefit and Protection Plus) would pay in the
situation illustrated. We assume that a $1,000 contribution is invested in one
of the variable investment options listed and a 5% annual return is earned on
the assets in that option.(1) Since the Protection Plus feature is only
available under certain contracts expenses would be lower for contracts that do
not have this feature.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the examples.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
If you surrender your contract at the end
of each period shown, the expenses
would be:
----------------------------------------------
1 year 3 years 5 years 10 years
------ ------- ------- --------
AXA Premier VIP Core Bond $ 108.88 $ 174.65 $ 163.21 $ 347.58
AXA Premier VIP Health Care $ 118.33 $ 202.41 $ 208.45 $ 432.34
AXA Premier VIP International Equity $ 117.80 $ 200.88 $ 205.98 $ 427.84
AXA Premier VIP Large Cap Core Equity $ 113.08 $ 187.05 $ 183.53 $ 386.23
AXA Premier VIP Large Cap Growth $ 113.08 $ 187.05 $ 183.53 $ 386.23
AXA Premier VIP Large Cap Value $ 113.08 $ 187.05 $ 183.53 $ 386.23
AXA Premier VIP Small/Mid Cap Growth $ 115.70 $ 194.75 $ 196.06 $ 409.59
AXA Premier VIP Small/Mid Cap Value $ 115.70 $ 194.75 $ 196.06 $ 409.59
AXA Premier VIP Technology $ 118.33 $ 202.41 $ 208.45 $ 432.34
EQ/Aggressive Stock $ 108.77 $ 174.34 $ 162.70 $ 346.60
EQ/Alliance Common Stock $ 107.09 $ 169.34 $ 154.46 $ 330.67
EQ/Alliance Global $ 110.45 $ 179.31 $ 170.87 $ 362.26
EQ/Alliance Growth and Income $ 108.14 $ 172.47 $ 159.62 $ 340.65
EQ/Alliance Growth Investors $ 108.14 $ 172.47 $ 159.62 $ 340.65
EQ/Alliance Intermediate Government
Securities $ 108.04 $ 172.15 $ 159.10 $ 339.66
EQ/Alliance International $ 113.08 $ 187.05 $ 183.53 $ 386.23
EQ/Alliance Money Market $ 105.73 $ 165.27 $ 147.73 $ 317.53
EQ/Alliance Premier Growth $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Alliance Quality Bond $ 107.83 $ 171.53 $ 158.07 $ 337.67
EQ/Alliance Small Cap Growth $ 110.03 $ 178.07 $ 168.83 $ 358.37
EQ/Alliance Technology $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/AXP New Dimensions $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/AXP Strategy Aggressive $ 109.40 $ 176.20 $ 165.77 $ 352.50
EQ/Balanced $ 108.35 $ 173.09 $ 160.64 $ 342.64
EQ/Bernstein Diversified Value $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/Calvert Socially Responsible $ 109.93 $ 177.76 $ 168.32 $ 357.40
EQ/Capital Guardian International $ 111.50 $ 182.41 $ 175.95 $ 371.93
EQ/Capital Guardian Research $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/Capital Guardian U.S. Equity $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/Emerging Markets Equity $ 117.80 $ 200.88 $ 205.98 $ 427.84
EQ/Equity 500 Index $ 104.78 $ 162.45 $ 143.05 $ 308.34
EQ/Evergreen Omega $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/FI Mid Cap $ 109.40 $ 176.20 $ 165.77 $ 352.50
EQ/FI Small/Mid Cap Value $ 110.45 $ 179.31 $ 170.87 $ 362.26
EQ/High Yield $ 108.56 $ 173.71 $ 161.67 $ 344.62
EQ/International Equity Index $ 110.45 $ 179.31 $ 170.87 $ 362.26
EQ/J.P. Morgan Core Bond $ 107.30 $ 169.97 $ 155.49 $ 332.67
EQ/Janus Large Cap Growth $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Lazard Small Cap Value $ 110.45 $ 179.31 $ 170.87 $ 362.26
EQ/Marsico Focus $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Mercury Basic Value Equity $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/MFS Emerging Growth Companies $ 109.09 $ 175.27 $ 164.23 $ 349.55
EQ/MFS Investors Trust $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/MFS Research $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/Putnam Growth & Income Value $ 108.88 $ 174.65 $ 163.21 $ 347.58
- -----------------------------------------------------------------------------------------
If you do not surrender your contract at
the end of each period shown,
the expenses would be:
-------------------------------------------
1 year 3 years 5 years 10 years
------ ------- ------- --------
AXA Premier VIP Core Bond $ 28.88 $ 94.65 $ 163.21 $ 347.58
AXA Premier VIP Health Care $ 38.32 $ 122.41 $ 208.45 $ 432.34
AXA Premier VIP International Equity $ 37.80 $ 120.88 $ 205.98 $ 427.84
AXA Premier VIP Large Cap Core Equity $ 33.07 $ 107.05 $ 183.53 $ 386.23
AXA Premier VIP Large Cap Growth $ 33.07 $ 107.05 $ 183.53 $ 386.23
AXA Premier VIP Large Cap Value $ 33.07 $ 107.05 $ 183.53 $ 386.23
AXA Premier VIP Small/Mid Cap Growth $ 35.70 $ 114.75 $ 196.06 $ 409.59
AXA Premier VIP Small/Mid Cap Value $ 35.70 $ 114.75 $ 196.06 $ 409.59
AXA Premier VIP Technology $ 38.32 $ 122.41 $ 208.45 $ 432.34
EQ/Aggressive Stock $ 28.77 $ 94.34 $ 162.70 $ 346.60
EQ/Alliance Common Stock $ 27.09 $ 89.34 $ 154.46 $ 330.67
EQ/Alliance Global $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/Alliance Growth and Income $ 28.14 $ 92.47 $ 159.62 $ 340.65
EQ/Alliance Growth Investors $ 28.14 $ 92.47 $ 159.62 $ 340.65
EQ/Alliance Intermediate Government
Securities $ 28.04 $ 92.15 $ 159.10 $ 339.66
EQ/Alliance International $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/Alliance Money Market $ 25.72 $ 85.27 $ 147.73 $ 317.53
EQ/Alliance Premier Growth $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Alliance Quality Bond $ 27.82 $ 91.53 $ 158.07 $ 337.67
EQ/Alliance Small Cap Growth $ 30.03 $ 98.07 $ 168.83 $ 358.37
EQ/Alliance Technology $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/AXP New Dimensions $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/AXP Strategy Aggressive $ 29.40 $ 96.20 $ 165.77 $ 352.50
EQ/Balanced $ 28.35 $ 93.09 $ 160.64 $ 342.64
EQ/Bernstein Diversified Value $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Calvert Socially Responsible $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Capital Guardian International $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/Capital Guardian Research $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Capital Guardian U.S. Equity $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Emerging Markets Equity $ 37.80 $ 120.88 $ 205.98 $ 427.84
EQ/Equity 500 Index $ 24.78 $ 82.45 $ 143.05 $ 308.34
EQ/Evergreen Omega $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/FI Mid Cap $ 29.40 $ 96.20 $ 165.77 $ 352.50
EQ/FI Small/Mid Cap Value $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/High Yield $ 28.56 $ 93.71 $ 161.67 $ 344.62
EQ/International Equity Index $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/J.P. Morgan Core Bond $ 27.30 $ 89.97 $ 155.49 $ 332.67
EQ/Janus Large Cap Growth $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Lazard Small Cap Value $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/Marsico Focus $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Mercury Basic Value Equity $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/MFS Emerging Growth Companies $ 29.09 $ 95.27 $ 164.23 $ 349.55
EQ/MFS Investors Trust $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/MFS Research $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Putnam Growth & Income Value $ 28.88 $ 94.65 $ 163.21 $ 347.58
- -----------------------------------------------------------------------------------------
13 Fee table
If you surrender your contract at the end
of each period shown, the expenses
----------------------------------------------
would be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
EQ/Putnam International Equity $ 112.03 $ 183.96 $ 178.49 $ 376.72
EQ/Putnam Voyager $ 108.88 $ 174.65 $ 163.21 $ 347.58
EQ/Small Company Index $ 107.83 $ 171.53 $ 158.07 $ 337.67
- --------------------------------------------------------------------------------
If you do not surrender your contract at
the end of each period shown,
the expenses would be:
----------------------------------------------
1 year 3 years 5 years 10 years
------ ------- ------- --------
EQ/Putnam International Equity $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Putnam Voyager $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Small Company Index $ 27.82 $ 91.53 $ 158.07 $ 337.67
- --------------------------------------------------------------------------------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods shown in
the examples. This is because if the amount applied to purchase an annuity
payout option is less than $2,000, or the initial payment is less than $20, we
may pay the amount to you in a single sum instead of payments under an annuity
payout option. See "Accessing your money" later in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $5.44 based on the average amount
applied to annuity payout options in 2001. See "Annuity administrative fee" in
"Charges and expenses" later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
14 Fee table
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $10,000 for you to
purchase a contract. You may make additional contributions of at least $1,000
each, subject to limitations noted below. The following table summarizes our
rules regarding contributions to your contract. In some states, our rules may
vary. All ages in the table refer to the age of the annuitant named in the
contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Available for
annuitant
Contract type issue ages
- --------------------------------------------------------------------------------
NQ 0 through 85
- --------------------------------------------------------------------------------
Rollover IRA 20 through 85
- --------------------------------------------------------------------------------
Roth Conversion 20 through 85
IRA
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Limitations on
Contract type Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------------
NQ o After-tax money. o No additional contributions after age 88.
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue Code.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover IRA o Eligible rollover distributions from TSA contracts o No rollover or direct transfer contributions after
or other 403(b) arrangements, qualified plans, age 88.
and governmental EDC plans.
o Contributions after age 70-1/2 must be net of
o Rollovers from another traditional individual required minimum distributions.
retirement arrangement.
o Although we accept IRA regular contributions
o Direct custodian-to-custodian transfers from (limited to $3,000 for the calendar year 2002)
another traditional individual retirement under Rollover IRA contracts, we intend that this
arrangement. contract be used primarily for rollover and direct
transfer contributions.
o Regular IRA contributions.
o Additional catch-up contributions totaling up to
o For the calendar year 2002 and later, additional $500 can be made for the calendar year 2002
"catch-up" contributions. where the owner is at least age 50 but under
age 70-1/2 at any time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion o Rollovers from another Roth IRA. o No additional rollover or direct transfer contribu-
IRA tions after age 88.
o Conversion rollovers from a traditional IRA.
o Conversion rollovers after age 70-1/2 must be net
o Direct transfers from another Roth IRA. of required minimum distributions for the tradi-
` tional IRA you are rolling over.
o Regular Roth IRA contributions.
o You cannot roll over funds from a traditional IRA
o For the calendar year 2002 and later, additional if your adjusted gross income is $100,000 or
catch-up contributions. more.
o Although we accept regular Roth IRA contribu-
tions (limited to $3,000 for the calendar year
2002) under Roth IRA contracts, we intend that
this contract be used primarily for rollover and
direct transfer contributions.
o Additional catch-up contributions totalling up to
$500 can be made for the calendar year 2002
where the owner is at least age 50 at any time
during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- --------------------------------------------------------------------------------
Available for
annuitant
Contract type issue ages
- --------------------------------------------------------------------------------
Rollover TSA 20 through 85
- --------------------------------------------------------------------------------
QP 20 through 75
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Limitations on
Contract type Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA o Direct transfers of pre-tax funds from another o No additional rollover or direct transfer contribu-
contract or arrangement under Section 403(b) tions after age 88.
of the Internal Revenue Code, complying with
IRS Revenue Ruling 90-24. o Rollover or direct transfer contributions after age
70-1/2 must be net of any required minimum
o Eligible rollover distributions of pre-tax funds distributions.
from other 403(b) plans, qualified plans, govern-
mental EDC plans and Traditional IRAs. o Employer-remitted contributions are not
permitted.
- ------------------------------------------------------------------------------------------------------------------------------------
QP o Only transfer contributions from an existing o Regular ongoing payroll contributions are not
qualified plan trust as a change of investment permitted.
vehicle under the plan.
o Only one additional transfer contribution may be
o The plan must be qualified under Section 401(a) made during a contract year.
of the Internal Revenue Code.
o No additional transfer contributions after age 76.
o For 401(k) plans, transferred contributions may
only include employee pre-tax contributions. o For defined benefit plans, employee contributions
are not permitted, and we will not accept contri-
butions that fund more than 80% of the
actuarial value of the plan participation/
employee's normal retirement benefit.
o Contributions after age 70-1/2 must be net of any
required minimum distributions.
Please refer to Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Elite(SM) contracts with the
same annuitant would then total more than $1,500,000. We reserve the right to
limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options and the fixed
maturity options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
PORTFOLIOS OF THE TRUSTS
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Elite(SM) contract. These portfolios may even have the same manager(s) and/or
a similar name. However, there are numerous factors that can contribute to
differences in performance between two investments, particularly over short
periods of time. Such factors include the timing of stock purchases and sales;
differences in fund cash flows; and specific strategies employed by the
portfolio manager. Objective
- -----------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
Portfolio Name Objective Adviser(s)
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital appreciation Pacific Investment Management Company LLC
consistent with a prudent level of risk
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P.,
Equity* through its Bernstein Investment
Research and Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P.,
Equity* through its Bernstein Investment
Research and Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital Management L.P.
Institutional Capital Corporation
MFS Investment Management
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management, LLC
TCW Investment Management Company
- -----------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
Portfolio Name Objective Adviser(s)
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and increased income
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio Name Objective Adviser(s)
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return Alliance Capital Management L.P
consistent with the Adviser's
determination of reasonable risk
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income Alliance Capital Management L.P
Government Securities* consistent with relative stability of
principal
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P
(including through its Bernstein Investment
Research and Management Unit)
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current Alliance Capital Management L.P
income, preserve its assets and
maintain liquidity
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income Alliance Capital Management L.P
consistent with moderate risk of capital
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of Alliance Capital Management L.P
capital
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Alliance Capital Management L.P
Current income is incidental to the
Portfolio's objective
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through Alliance Capital Management L.P.
both appreciation of capital and Capital Guardian Trust Company
current income Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment Research and
Management Unit
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses Alliance Capital Management L.P.
that approximates the total return
performance of the S&P 500 Index,
including reinvestment of dividends,
at a risk level consistent with that
of the S&P 500 Index
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management Company, LLC
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return Alliance Capital Management L.P.
through a combination of current
income and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio Name Objective Adviser(s)
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible Deutsche Asset Management Inc.
(before deduction of Portfolio expenses)
the total return of the MSCI EAFE Index
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total return J.P. Morgan Investment Management, Inc.
consistent with moderate risk of capital
and maintenance of liquidity
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of Marsico Capital Management, LLC
capital
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and Mercury Advisors
secondarily, income
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth MFS Investment Management
Companies
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with MFS Investment Management
a secondary objective to seek reasonable
current income
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of MFS Investment Management
capital and future income
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is Putnam Investment Management, LLC
Value a secondary objective
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and Putnam Investment Management, LLC
any increased income that results
from this growth
- -----------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as Deutsche Asset Management Inc.
possible (before deduction of Portfolio
expenses) the total return of the Russell
2000 Index
- -----------------------------------------------------------------------------------------------------------------------------------
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in all states. Check with your financial professional to see if
fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
Prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2003 through
2012. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the next
available fixed maturity option with the earliest maturity date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount being
withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III of at the end of this Prospectus provides an
example of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among two ways to allocate your contributions under your
contract: self-directed and principal assurance.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally
Contract features and benefits 21
may not be later than 10 years, or earlier than 7 years from your contract
date. You allocate the rest of your contribution to the variable investment
options however you choose.
For example, if your initial contribution is $25,000, and on February 15, 2002,
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $14,507.17 to that fixed maturity option and the balance to your
choice of variable investment options. On the maturity date your value in the
fixed maturity option would be $25,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information" later in this Prospectus and in the SAI.
Please check with your financial professional if the principal assurance
allocation feature is available in your state.
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% (3% in Washington) roll up to age 80 guaranteed minimum death benefit.
Your benefit base is not an account value or a cash value. See "Our baseBUILDER
option" and "Guaranteed minimum death benefit" below. The benefit base is equal
to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money" later in this Prospectus); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit.
The effective annual interest rate credited to the benefit base is:
o 5% (3% in Washington for purposes of calculating the guaranteed minimum
death benefit only) for the benefit base with respect to the variable
investment options (other than the AXA Premier VIP Core Bond, EQ/Alliance
Intermediate Government Securities, EQ/Alliance Money Market or EQ/Alliance
Quality Bond options); and
o 3% for the benefit base with respect to the AXA Premier VIP Core Bond,
EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market and
EQ/Alliance Quality Bond, the fixed maturity options and the loan reserve
account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract date anniversary
following the annuitant's 80th birthday.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our baseBUILDER
option" and annuity payout options are discussed in "Accessing your money"
later in this Prospectus. The guaranteed annuity purchase factors are those
factors specified in your contract. The current annuity purchase factors are
those factors that are in effect at any given time. Annuity purchase factors
are based on interest rates, mortality tables, frequency of payments, the form
of annuity benefit and the annuitant's (and any joint annuitant's) age and sex
in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses" later in this Prospectus.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability. For contracts issued in Oregon, only the Income Manager
life with a period certain payout annuity contract is available. You choose
which of these payout options you want and whether you want the option to be
paid on a single or joint life basis at the time you exercise your guaranteed
minimum income benefit. The maximum period certain available under the Income
Manager payout option is 10 years. This period may be shorter, depending on the
annuitant's age when you exercise your guaranteed minimum income benefit and
the type of contract you own. We may also make other forms of payout options
available. For a description of payout options, see "Your annuity payout
options" in "Accessing your money" later in this Prospectus.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base less any outstanding loan plus accrued interest
(applies to Rollover TSA only) at guaranteed annuity purchase factors or (ii)
the income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the
22 Contract features and benefits
annuitant's (or joint annuitant's, if applicable) death. There is no
continuation of benefits following the annuitant's (or joint annuitant's, if
applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below illustrates
the guaranteed minimum income benefit amounts per $100,000 of initial
contribution, for a male annuitant age 60 (at issue) on the contract date
anniversaries indicated, who has elected the life annuity fixed payout option,
using the guaranteed annuity purchase factors as of the date of this
prospectus, assuming no additional contributions, withdrawals or loans under
Rollover TSA contracts, and assuming there were no allocations to the AXA
Premier VIP Core Bond, EQ/Alliance Intermediate Government Securities,
EQ/Alliance Money Market or EQ/Alliance Quality Bond options, the fixed
maturity options or the loan reserve account.
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Guaranteed minimum income
Contract date benefit -- annual income
anniversary at exercise payable for life
- --------------------------------------------------------------------------------
10 $10,816
15 $16,132
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise
the benefit. You will begin receiving payments one payment period after the
annuity payout contract is issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 (age 53 in
Oregon) when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary after the annuitant is age 60.
o If the annuitant was at least age 50 (age 54 in Oregon) and no older than
age 75 when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary beginning with the 10th (7th in Oregon) contract date
anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit is
the contract date anniversary following the annuitant's 85th (83rd in
Oregon) birthday; and
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary (in Oregon, the first and
second contract date anniversary) that it becomes available;
(iii) if the annuitant was older than age 60 (age 63 in Oregon) at the time an
IRA, QP or Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can be
exercised; and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you don't elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% (3% in Washington) roll up to age 80" or the
"annual ratchet to age 80" guaranteed minimum death benefit when you apply for
a contract. Once you have made your election, you may not change it.
5% (3% IN WASHINGTON) ROLL UP TO AGE 80. The guaranteed minimum death benefit
is equal to the benefit base described earlier in "Your benefit base."
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death
Contract features and benefits 23
benefit, we will increase your guaranteed minimum death benefit to equal your
account value. On the other hand, if your account value on the contract date
anniversary is less than your guaranteed minimum death benefit, we will not
adjust your guaranteed minimum death benefit either up or down. If you make
additional contributions, we will increase your current guaranteed minimum
death benefit by the dollar amount of the contribution on the date the
contribution is allocated to your investment options.
If you take a withdrawal from your contract, we will reduce your guaranteed
minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix IV at the end of this Prospectus for an example of how we
calculate the guaranteed minimum death benefit.
Protection Plus
Subject to state and contract availability, if you are purchasing a contract,
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus for the
potential tax consequences of electing to purchase the Protection Plus feature
in an NQ or IRA contract.
If the annuitant is 69 or younger when we issue your contract (or if the
successor owner/annuitant is 69 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
40% of the lesser of:
o the total net contributions or
o the death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including withdrawal charges and loans). Reduction on a pro rata basis means
that we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
If the annuitant is age 70 through 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 70 and 75 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
25% of the lesser of:
o the total net contributions (as described above) or
o the death benefit (as described above) less total net contributions
Protection Plus must be elected when the contract is first issued: neither the
owner nor the successor owner/annuitant can add it subsequently. Ask your
financial professional if this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct) and (ii) any positive or negative market
value adjustments in the fixed maturity options through the date we receive
your contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) or (ii) above). For any IRA contract returned
to us within seven days after you receive it, we are required to refund the
full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA
24 Contract features and benefits
contract, you may cancel your Roth Conversion IRA contract and return to a
Rollover IRA contract. Our processing office, or your financial professional,
can provide you with the cancellation instructions.
Contract features and benefits 25
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applicable to Rollover
TSA contracts only). These amounts are subject to certain fees and charges
discussed under "Charges and expenses" later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) any
applicable withdrawal charges and (ii) the amount of any outstanding loan plus
accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
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Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge and/or the
Protection Plus benefit charge the number of units credited to your contract
will be reduced. A description of how unit values are calculated is found in
the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
26 Determining your contract's value
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Elite(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
DOLLAR COST AVERAGING
Dollar cost averaging allows you to gradually transfer amounts from the
EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the other
variable investment options you select. This will cause you to purchase more
units if the unit value is low and fewer units if the unit value is high.
Therefore, you may get a lower average cost per unit over the long term. This
plan of investing, however, does not guarantee that you will earn a profit or
be protected against losses. You may not make transfers to the fixed maturity
options.
If your value in the EQ/Alliance Money Market option is at least $5,000, you
may choose, at any time, to have a specified dollar amount or percentage of
your value transferred from that option to the other variable investment
options. You can select to have transfers made on a monthly, quarterly, or
annual basis. The transfer date will be the same calendar day of the month as
the contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the transfers
until all amounts in the EQ/Alliance Money Market option have been transferred
out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The dollar cost averaging program will then
end. You may change the transfer amount once each contract year or cancel this
program at any time.
----------------------------------
You may not elect dollar cost averaging if you are participating in the
rebalancing program. There is no charge for the dollar cost averaging feature.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually on a contract year basis).
Transferring your money among investment options 27
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested. The rebalancing program will remain in effect unless you
request that it be canceled in writing. There is no charge for the rebalancing
feature.
You may not elect the rebalancing program if you are participating in the
dollar cost averaging program. Rebalancing is not available for amounts you
have allocated in the fixed maturity options.
28 Transferring your money among investment options
4. Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
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Method of withdrawal
- --------------------------------------------------------------------------------
Lifetime
required
Substantially minimum
Contract Lump sum Systematic equal distribution
- --------------------------------------------------------------------------------
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Roth
Conversion
IRA Yes Yes Yes No
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QP Yes No No Yes
Rollover
- --------------------------------------------------------------------------------
TSA* Yes Yes No Yes
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* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
later in this Prospectus.
Lump sum withdrawals in excess of the 10% free withdrawal amount (see "10% free
withdrawal amount" in "Charges and expenses" later in this Prospectus) will be
subject to a withdrawal charge. Under Rollover TSA contracts, if a loan is
outstanding, you may only take lump sum withdrawals as long as the cash value
remaining after any withdrawal equals at least 10% of the outstanding loan plus
accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 0.8% monthly, 2.4% quarterly and 10.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, the amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 10% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
Accessing your money 29
Substantially equal withdrawals are not subject to a withdrawal charge.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP and Rollover TSA contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually. See the
"Required minimum distributions" section in "Tax information" later in this
Prospectus and in the SAI for your specific type of retirement arrangement.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 10% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, QP and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% (3% in Washington) roll up to age 80 -- If you elect the 5% roll up to age
80 guaranteed minimum death benefit, your benefit base will be reduced on a
dollar-for-dollar basis as long as the sum of your withdrawals in a contract
year is 5% or less of the benefit base on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the benefit base on the most recent contract
date anniversary, that withdrawal and any subsequent withdrawals in that same
contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
benefit base and current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 85 -- If your contract was issued when the
annuitant was between ages 80 and 85, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted from
the death benefit amount).
30 Accessing your money
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charges) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Elite(SM) offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option" earlier in this
Prospectus).
- --------------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- --------------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available in
payout options New York)
Life annuity with period
certain
- --------------------------------------------------------------------------------
Income Manager payout options Life annuity with period
(available for annuitants age 83 certain
or less at contract issue) Period certain annuity
- --------------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the annuitant
is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contracts that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recov-
Accessing your money 31
ered, payments to the beneficiary will continue until that amount has been
recovered. This payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain and life annuity with refund
certain payout options are available on a single life or joint and survivor
life basis. The joint and survivor life annuity guarantees payments for the
rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your contract.
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Elite(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Elite(SM), and we will deduct any applicable withdrawal charge.
For the tax consequences of withdrawals, see "Tax information" later in this
Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under our
contract is imposed if you select a period certain. If the period certain is
more than 5 years, then the withdrawal charge deducted will not exceed 5% of
the account value.
For the Income Manager payout options no withdrawal charge is imposed under
your contract. If the withdrawal charge that otherwise would have been applied
to your account value under your contract is greater than 2% of the
contributions that remain in your contract at the time you purchase your payout
option, the withdrawal charges under the Income Manager will apply. The year in
which your account value is applied to the payout option will be "contract year
1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Elite(SM) contract date.
Except with respect to the Income Manager annuity payout options, where payments
are made on the 15th day of each month, you can change the date your annuity
payments are to begin
32 Accessing your money
anytime before that date as long as you do not choose a date later than the
28th day of any month. Also, that date may not be later than the contract date
anniversary that follows the annuitant's 90th birthday. This may be different
in some states.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- --------------------------------------------------------------------------------
Maximum
Issue age annuitization age
- --------------------------------------------------------------------------------
0-75 85
76 86
77 87
78-80 88
81-85 90
- --------------------------------------------------------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
Accessing your money 33
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o At the time you make certain withdrawals or surrender your contract -- a
withdrawal charge.
o A charge for baseBUILDER, if you elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
o A charge for Protection Plus, if you elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" later in this Prospectus.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances:
(1) if you make one or more withdrawals during a contract year that, in total,
exceeds the 10% free withdrawal amount, described below, or (2) if you
surrender your contract to receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn in any
of the first three years after we receive a contribution. We determine the
withdrawal charge separately for each contribution according to the following
table:
- --------------------------------------------------------------------------------
Contract year
- --------------------------------------------------------------------------------
1 2 3 4
- --------------------------------------------------------------------------------
Percentage of contribution 8 % 8 % 8 % 0 %
- --------------------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information" later in this Prospectus.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and withdrawal charge from your account
value. The amount deducted to pay withdrawal charges is also subject to that
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover sales expenses.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 10%
free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust:
34 Charges and expenses
The free withdrawal amount will equal the greater of: (1) the current account
value, less contributions that have not been withdrawn (earnings in the
contract), and (2) the 10% free withdrawal amount defined above.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
(i) The annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration; or
(ii) We receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six months or
less; or
(iii) The annuitant has been confined to a nursing home for more than 90 days
(or such other period, as required in your state) as verified by a
licensed physician. A nursing home for this purpose means one that is (a)
approved by Medicare as a provider of skilled nursing care service, or
(b) licensed as a skilled nursing home by the state or territory in which
it is located (it must be within the United States, Puerto Rico, or U.S.
Virgin Islands) and meets all of the following:
-- its main function is to provide skilled, intermediate or custodial
nursing care;
-- it provides continuous room and board to three or more persons;
-- it is supervised by a registered nurse or licensed practical nurse;
-- it keeps daily medical records of each patient;
-- it controls and records all medications dispensed; and
-- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions as described in (i), (ii)
and (iii) above existed at the time a contribution was remitted or if the
condition began within 12 months of the period following remittance. Some
states may not permit us to waive the withdrawal charge in the above
circumstances or may limit the circumstances for which the withdrawal charge
may be waived. Your financial professional can provide more information or you
may contact our processing office.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85 (83 in Oregon),
whichever occurs first. The charge is equal to 0.30% of the benefit base in
effect on the contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.20% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment option on a
pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in the order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (the rate is
1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this Prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit and the guaranteed minimum death benefit or offer variable investment
options that invest in shares of either Trust that are not subject to the 12b-1
fee. Group arrangements include those in which a trustee or an employer, for
example, purchases contracts covering a group of individuals on a group basis.
Group arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Charges and expenses 35
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase
under such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
36 Charges and expenses
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) and any amount applicable under the Protection Plus feature, as
of the date we receive satisfactory proof of the annuitant's death, any
required instructions for the method of payment, information and forms
necessary to effect payment. The amount of the guaranteed minimum death benefit
will be the guaranteed minimum death benefit as of the date of the annuitant's
death, adjusted for any subsequent withdrawals (and any associated withdrawal
charges). Under Rollover TSA contracts we will deduct the amount of any
outstanding loan plus accrued interest from the amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" later in this
Prospectus.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive this death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will pay
any cash value five years after your death (or the death of the first owner
to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor
Payment of death benefit 37
owner/annuitant feature, we will increase the account value to equal your
guaranteed minimum death benefit as of the date of your death if such death
benefit is greater than such account value, plus any amount applicable under
the Protection Plus feature and adjusted for any subsequent withdrawals. The
increase in the account value will be allocated to the investment options
according to the allocation percentages we have on file for your contract.
Thereafter, withdrawal charges will no longer apply to contributions made
before your death. Withdrawal charges will apply if additional contributions
are made. These additional contributions will be considered to be withdrawn
only after all other amounts have been withdrawn. In determining whether the
guaranteed minimum death benefit will continue to grow, we will use your
surviving spouse's age (as of the date we receive satisfactory proof of the
your death, any required instructions and the information and forms necessary
to effect the successor owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the death benefit as of
the date of your death, if such death benefit is greater than such account
value, plus any amount applicable under the Protection Plus feature and
adjusted for any subsequent withdrawals. The beneficiary continuation option is
available if we have received regulatory clearance in your state. Where an IRA
contract is owned in a custodial individual retirement account, the custodian
may reinvest the death benefit in an Accumulator(R) Elite(SM) individual
retirement annuity contract, using the account beneficiary as the annuitant.
Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in
effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected
by the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
38 Payment of death benefit
7. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Elite(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers or federal gift and estate taxes. Transfers of the contract,
rights under the contract, or payments under the contract may be subject to
gift or estate taxes. You should not rely only on this document, but should
consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans.
In addition to increasing amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator(R) Elite(SM)'s Dollar Cost Averaging, choice of
death benefits, selection of investment funds and fixed maturity options and
its choices of pay-out options, as well as the features and benefits of other
permissible funding vehicles and the relative costs of annuities and other
arrangements. You should be aware that cost may vary depending on the features
and benefits made available and the charges and expenses of the investment
options or funds that you elect. See also Appendix II at the end of this
Prospectus for a discussion of QP contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
Tax information 39
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
Annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which should have no adverse tax effect, it is possible that the IRS could take
a contrary position or assert that the Protection Plus rider is not part of the
contract. In such a case, the charges for the Protection Plus rider could be
treated for federal income tax purposes as a partial withdrawal from the
contract. If this were so, such a deemed withdrawal could be taxable, and for
contract owners under age 59-1/2, also subject to a tax penalty. Were the IRS to
take this position, Equitable would take all reasonable steps to attempt to
avoid this result, which would include amending the contract (with appropriate
notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Elite(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Elite(SM) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER
YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
currently included in your gross income for federal income tax purposes.
Incidents of investment control could include among other items, the number of
investment options available under a contract and/or the frequency of transfers
available under the contract. In connection with the issuance of regulations
concerning investment diversification in 1986, the Treasury Department
announced that the diversification regulations did not provide guidance on
investor control but that guidance would be issued in the form of regulations
or rulings. As of the date of this prospectus, no such guidance has been
issued. It is not known whether such guidelines, if in fact issued, would have
retroactive adverse effect on existing contracts. We can not provide assurance
as to the terms or scope of any future guidance nor any
40 Tax information
assurance that such guidance would not be imposed on a retroactive basis to
contracts issued under this prospectus. We reserve the right to modify the
contract as necessary to attempt to prevent you from being considered the owner
of the assets of the separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets funding the account
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account. In an
individual retirement annuity, an insurance company issues an annuity contract
that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http:// www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Elite(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Elite(SM) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) ELITE(SM) CONTRACT
AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE PARAGRAPH ABOVE,
DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We have filed a request
with the IRS that the contract with the Protection Plus feature qualifies as to
form for use as a traditional IRA and Roth IRA, respectively. THERE IS NO
ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS THE IRS
QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may not invest in life
insurance contracts. Although we view the optional Protection Plus benefit as
an investment protection feature which should have no adverse tax effect and
not as life insurance, it is possible that the IRS could take a contrary
position regarding tax qualification or assert that the Protection Plus rider
is not a permissible part of an individual retirement annuity contract. We
further view the optional Protection Plus benefit as part of the contract.
There is also a risk that the IRS may take the position that the optional
Protection Plus benefit is not part of the annuity contract. In such a case,
the charges for the Protection Plus rider could be treated for federal income
tax purposes as a partial withdrawal from the contract. If this were so, such a
deemed withdrawal could be taxable, and for contract owners under age 59-1/2,
also subject to a tax penalty. Were the IRS to take any adverse position,
Equitable would take all reasonable steps to attempt to avoid any adverse
result, which would include amending the contract (with appropriate notice to
you). YOU SHOULD DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER
PURCHASING AN ACCUMULATOR(R) ELITE(SM) IRA OR ACCUMULATOR(R) ELITE(SM) ROTH IRA
WITH THE OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
Tax information 41
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA , surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally there are two types of funding vehicles available for 403(b)
arrangements-- an annuity contract under Section 403(b)(1) of the Code or a
custodial account which invests only in mutual funds and which is treated as an
annuity contract under Section 403(b)(7) of which the Code. Both types of
403(b) arrangements qualify for tax deferral.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Elite(SM) Rollover TSA contract:
o a rollover from another eligible retirement plan, or
42 Tax information
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds;
and
o the Equitable Accumulator(R) Elite(SM) contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Elite(SM) Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Elite(SM) Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to the withdrawal restrictions may depend on the
source of the funds used to establish the Accumulator(R) Elite(SM) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over an "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation of service, if later. These rules are discussed in greater detail
in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type
Tax information 43
of distribution and, in certain cases, the amount of your distribution. Any
income tax withheld is a credit against your income tax liability. If you do
not have sufficient income tax withheld or do not make sufficient estimated
income tax payments, you may incur penalties under the estimated income tax
rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA to the extent it is reasonable for us to believe that a
distribution is includable in your gross income. This may result in tax
being withheld even though the Roth IRA distribution is ultimately not
taxable. You can elect out of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 and Separate
Account No. 49 for taxes. We do not now, but may in the future set up reserves
for such taxes.
44 Tax information
8. More information
- --------------------------------------------------------------------------------
ABOUT SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 45 and
Separate Account No. 49. We established Separate Account No. 45 in 1994 and
Separate Account No. 49 in 1996 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts. We are the legal owner of all of the
assets in Separate Account No. 45 and in Separate Account No. 49 and may
withdraw any amounts that exceed our reserves and other liabilities with
respect to variable investment options under our contracts. The results of the
Separate Accounts' operations are accounted for without regard to Equitable
Life's other operations.
Each Separate Account is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or the Separate Accounts.
Each subaccount (variable investment option) within the Separate Accounts
invests solely in Class IB/B shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from either Separate Account, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate each Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against each Separate Account or a
variable investment option directly);
(5) to deregister the Separate Accounts under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Accounts; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999 EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to its
Class IB/B shares and other aspects of its operations, appears in the
prospectuses for each Trust, which are attached at the end of this Prospectus,
or in the respective SAIs which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table are illustrative only
and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your financial professional.
The rates to maturity for new allocations as of February 15, 2002 and the
related price per $100 of maturity value were as shown below:
- --------------------------------------------------------------------------------
Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100
maturity year February 15, 2002 of maturity value
- --------------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
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More information 45
- --------------------------------------------------------------------------------
Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100
maturity year February 15, 2002 of maturity value
- --------------------------------------------------------------------------------
2009 5.08% $ 70.67
2010 5.29% $ 66.19
2011 5.47% $ 61.90
2012 5.59% $ 58.03
- --------------------------------------------------------------------------------
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix III at the end of this Prospectus for
an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to
46 More information
the general account, however, may be subject to certain provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits" earlier in
this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgement of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgement of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT
EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts, we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in each prospectus for the Trusts or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We
More information 47
will also vote any shares that we are entitled to vote directly because of
amounts we have in a portfolio in the same proportions that contract owners
vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Accounts require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45 or Separate Account No. 49, our ability to meet
our obligations under the contracts or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001, in this prospectus
by reference to the 2001 Annual Report on Form 10-K are incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45 and Separate Account No.
49, as well as the consolidated financial statements of Equitable Life, are in
the applicable SAI. The SAI is available free of charge. You may request one by
writing to our processing office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of a Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. If your individual
retirement annuity contract is held in your custodial individual retirement
account, you may only assign or transfer ownership of such an IRA contract to
yourself. Loans are not available and you cannot assign Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contracts as security for a loan or other
obligation. If the employer that provided the funds does not restrict them,
loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules. In the case of such a transfer, which involves
a surrender of your contract, we will impose a withdrawal charge, if one
applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC and AXA Distributors,
LLC. For this purpose, AXA Advisors, LLC serves as the principal underwriter of
Separate Account No. 45, and AXA Distributors, LLC serves as the principal
underwriter of Separate Account No. 49. The offering of the contracts is
intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for sales and
marketing functions for the contracts funded through Separate Account No. 45.
AXA Advisors also acts as distributor for other Equitable Life annuity products
with different features, expenses and fees. AXA Advisors is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
48 More information
These contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
DISTRIBUTION OF THE CONTRACTS BY AXA DISTRIBUTORS, LLC
AXA Distributors, LLC ("AXA Distributors"), an indirect, wholly owned
subsidiary of Equitable Life, has responsibility for sales and marketing
functions for contracts funded through Separate Account No. 49. AXA
Distributors also acts as distributor for other Equitable Life annuity products
with different features, expenses, and fees. AXA Distributors is registered
with the SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Distributors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
AXA Distributors is the successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. Like AXA Distributors, Equitable
Distributors, Inc. was owned by Equitable Holdings, LLC.
These contracts are sold by financial professionals of AXA Distributors, as
well as by affiliated and unaffiliated broker-dealers who have entered into
selling agreements with AXA Distributors. We pay broker-dealer sales
compensation that will generally not exceed an amount equal to 7% of total
contributions made under the contracts. AXA Distributors may also receive
compensation and reimbursement for its marketing services under the terms of
its distribution agreement with Equitable Life. Broker-dealers receiving sales
compensation will generally pay a portion of it to their financial professional
as commissions related to sales of the contracts. The offering of the contracts
is intended to be continuous.
More information 49
9. Investment performance
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The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the withdrawal charge, the optional baseBUILDER benefits charge and the charge
for Protection Plus, but does not reflect the charges designed to approximate
certain taxes imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee.
The results shown under "length of portfolio period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown include some periods when a variable investment
option investing in the Portfolio had not yet commenced operations. For those
periods, we have adjusted the results of the portfolios to reflect the charges
under the contracts that would have applied had the investment option been
available. The contracts were offered for the first time in 2001.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985, reflect the results of the variable investment options that preceded
them. The "Since portfolio inception" figures for these options are based on
the date of inception of the preceding variable investment options. We have
adjusted these results to reflect the maximum investment advisory fee payable
for the portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
50 Investment performance
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
- --------------------------------------------------------------------------------
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------------------------------------------------------------
EQ/Aggressive Stock (34.38)% (5.13)% ( 4.95)%
- --------------------------------------------------------------------------------
EQ/Alliance Common Stock (20.18)% 7.61% 8.22%
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EQ/Alliance Global (29.55)% 1.83% 2.22%
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EQ/Alliance Growth Investors (22.03)% 5.19% 5.36%
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EQ/Alliance Money Market ( 6.10)% 2.80% 2.72%
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EQ/Alliance Premier Growth (33.19)% -- (16.39)%
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EQ/Alliance Small Cap Growth (22.63)% -- 7.24%
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EQ/Alliance Technology (33.66)% -- (41.61)%
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EQ/Bernstein Diversified Value ( 6.56)% -- 3.81%
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EQ/Capital Guardian International (30.16)% -- ( 9.08)%
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EQ/Capital Guardian Research (11.59)% -- ( 0.97)%
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EQ/Capital Guardian U.S. Equity (11.58)% -- ( 3.14)%
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EQ/Emerging Markets Equity (14.68)% -- ( 6.98)%
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EQ/Equity 500 Index (21.58)% 7.84% 8.45%
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EQ/Evergreen Omega (26.35)% -- (12.16)%
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EQ/FI Mid Cap (22.80)% -- (17.43)%
- --------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value ( 5.67)% -- 1.47%
- --------------------------------------------------------------------------------
EQ/High Yield ( 8.93)% (2.24)% ( 1.81)%
- --------------------------------------------------------------------------------
EQ/International Equity Index (34.66)% -- ( 3.45)%
- --------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond ( 1.79)% -- 4.49%
- --------------------------------------------------------------------------------
EQ/Janus Large Cap Growth (32.20)% -- (35.49)%
- --------------------------------------------------------------------------------
EQ/Lazard Small Cap Value 7.85% -- 5.03%
- --------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity ( 4.16)% -- 11.60%
- --------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (43.11)% -- 7.44%
- --------------------------------------------------------------------------------
EQ/MFS Investors Trust (25.33)% -- ( 8.12)%
- --------------------------------------------------------------------------------
EQ/MFS Research (31.08)% -- 3.92%
- --------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (16.31)% -- 3.44%
- --------------------------------------------------------------------------------
EQ/Putnam International Equity (30.79)% -- 6.05%
- --------------------------------------------------------------------------------
EQ/Putnam Voyager (33.67)% -- 4.97%
- --------------------------------------------------------------------------------
EQ/Small Company Index ( 7.58)% -- 1.79%
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- ----------------------------------------------------------------------------------------
EQ/Aggressive Stock (13.60)% (5.13)% 1.81% 9.95%
- ----------------------------------------------------------------------------------------
EQ/Alliance Common Stock ( 6.33)% 7.61% 10.33% 11.71%
- ----------------------------------------------------------------------------------------
EQ/Alliance Global ( 8.59)% 1.83% 6.29% 6.51%
- ----------------------------------------------------------------------------------------
EQ/Alliance Growth Investors ( 3.85)% 5.19% 6.69% 9.71%
- ----------------------------------------------------------------------------------------
EQ/Alliance Money Market 0.14% 2.80% 2.30% 4.30%
- ----------------------------------------------------------------------------------------
EQ/Alliance Premier Growth -- -- -- (16.38)%
- ----------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth 3.49% -- -- 7.24%
- ----------------------------------------------------------------------------------------
EQ/Alliance Technology -- -- -- (41.61)%
- ----------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value ( 3.21)% -- -- 3.80%
- ----------------------------------------------------------------------------------------
EQ/Capital Guardian International -- -- -- ( 9.08)%
- ----------------------------------------------------------------------------------------
EQ/Capital Guardian Research -- -- -- ( 0.98)%
- ----------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity -- -- -- ( 3.14)%
- ----------------------------------------------------------------------------------------
EQ/Emerging Markets Equity ( 0.96)% -- -- (11.45)%
- ----------------------------------------------------------------------------------------
EQ/Equity 500 Index ( 6.50)% 7.84% -- 11.27%
- ----------------------------------------------------------------------------------------
EQ/Evergreen Omega (12.15)% -- -- (12.15)%
- ----------------------------------------------------------------------------------------
EQ/FI Mid Cap -- -- -- (18.08)%
- ----------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value ( 1.03)% -- -- 1.74%
- ----------------------------------------------------------------------------------------
EQ/High Yield ( 9.02)% (2.24)% 4.69% 5.04%
- ----------------------------------------------------------------------------------------
EQ/International Equity Index (13.00)% -- -- ( 3.45)%
- ----------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond 1.21% -- -- 4.49%
- ----------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth -- -- -- (35.99)%
- ----------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value 7.98% -- -- 5.03%
- ----------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 7.57% -- -- 11.60%
- ----------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies ( 7.23)% -- -- 7.44%
- ----------------------------------------------------------------------------------------
EQ/MFS Investors Trust ( 8.12)% -- -- ( 8.12)%
- ----------------------------------------------------------------------------------------
EQ/MFS Research ( 7.93)% -- -- 3.92%
- ----------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value ( 5.45)% -- -- 3.44%
- ----------------------------------------------------------------------------------------
EQ/Putnam International Equity ( 1.29)% -- -- 6.05%
- ----------------------------------------------------------------------------------------
EQ/Putnam Voyager (11.91)% -- -- 4.97%
- ----------------------------------------------------------------------------------------
EQ/Small Company Index 1.42% -- -- 1.79%
- ----------------------------------------------------------------------------------------
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October 16,
1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Alliance Technology (May
1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap Value and EQ/Janus Large Cap
Growth (September 5, 2000); EQ/Balanced (May 18, 2001); EQ/Calvert Socially
Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier VIP Core
Bond, AXA Premier VIP Health Care, AXA Premier VIP International Equity, AXA
Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA
Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA
Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology, EQ/Alliance
Growth and Income, EQ/Alliance International, EQ/Alliance Quality Bond,
EQ/AXP New Dimensions and EQ/AXP Strategy Aggressive (January 14, 2002);
EQ/Alliance Intermediate Government Securities (April 1, 2002). No
performance information is provided for portfolios and/or variable
investment options with inception dates after December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Calvert Socially
Responsible (September 1, 1999); EQ/Alliance Technology (May 1, 2000);
EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid Cap and
EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus (August 31,
2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA Premier
VIP International Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier
VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP
Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value and AXA Premier
VIP Technology (December 31, 2001). No performance information is provided
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
Investment performance 51
TABLE FOR SEPARATE ACCOUNT 45
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
- --------------------------------------------------------------------------------------------
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------------------------------------------------------------------------
EQ/Aggressive Stock (34.38)% (5.13)% 1.86%
- --------------------------------------------------------------------------------------------
EQ/Alliance Common Stock (20.18)% 7.61% 11.91%
- --------------------------------------------------------------------------------------------
EQ/Alliance Global (29.55)% 1.83% 5.08%
- --------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income (11.13)% 11.86% 13.71%
- --------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors (22.03)% 5.19% 7.82%
- --------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities ( 1.85)% 4.06% 4.19%
- --------------------------------------------------------------------------------------------
EQ/Alliance International (32.54)% (4.83)% ( 1.50)%
- --------------------------------------------------------------------------------------------
EQ/Alliance Money Market ( 6.10)% 2.80% 2.81%
- --------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth (33.19)% -- (16.39)%
- --------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (22.63)% -- 7.24%
- --------------------------------------------------------------------------------------------
EQ/Alliance Technology (33.66)% -- (41.61)%
- --------------------------------------------------------------------------------------------
EQ/AXP New Dimensions (24.87)% -- (30.72)%
- --------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive (42.54)% -- (56.37)%
- --------------------------------------------------------------------------------------------
EQ/Capital Guardian Research (11.59)% -- ( 0.97)%
- --------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity (11.58)% -- ( 3.14)%
- --------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity (14.68)% -- ( 9.96)%
- --------------------------------------------------------------------------------------------
EQ/Equity 500 Index (21.58)% 7.84% 11.62%
- --------------------------------------------------------------------------------------------
EQ/Evergreen Omega (26.35)% -- (12.16)%
- --------------------------------------------------------------------------------------------
EQ/FI Mid Cap (22.80)% -- (17.43)%
- --------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value ( 5.67)% -- 1.74%
- --------------------------------------------------------------------------------------------
EQ/High Yield ( 8.93)% (2.24)% 2.44%
- --------------------------------------------------------------------------------------------
EQ/International Equity Index (34.66)% -- ( 3.45)%
- --------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth (32.20)% -- (35.49)%
- --------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity ( 4.16)% -- 11.60%
- --------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (43.11)% -- 7.44%
- --------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (25.33)% -- ( 8.12)%
- --------------------------------------------------------------------------------------------
EQ/MFS Research (31.08)% -- 3.92%
- --------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (16.31)% -- 3.44%
- --------------------------------------------------------------------------------------------
EQ/Small Company Index ( 7.58)% -- 1.79%
- --------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- -----------------------------------------------------------------------------------------------------
EQ/Aggressive Stock (13.60)% (5.13)% 1.81% 9.95%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock ( 6.33)% 7.61% 10.33% 11.71%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Global ( 8.59)% 1.83% 6.29% 6.51%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income 3.71% 11.86% -- 11.13%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors ( 3.85)% 5.19% 6.69% 9.71%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities 0.88% 4.06% 3.57% 4.27%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance International (11.87)% (4.83)% -- ( 1.30)%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Money Market 0.14% 2.80% 2.30% 4.30%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth -- -- -- (16.38)%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth 3.49% -- -- 7.24%
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Technology -- -- -- (41.61)%
- -----------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions -- -- -- (31.49)%
- -----------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive -- -- -- (57.16)%
- -----------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research -- -- -- ( 0.98)%
- -----------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity -- -- -- ( 3.14)%
- -----------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity ( 0.96)% -- -- (11.45)%
- -----------------------------------------------------------------------------------------------------
EQ/Equity 500 Index ( 6.50)% 7.84% -- 11.27%
- -----------------------------------------------------------------------------------------------------
EQ/Evergreen Omega (12.15)% -- -- (12.15)%
- -----------------------------------------------------------------------------------------------------
EQ/FI Mid Cap -- -- -- (18.08)%
- -----------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value ( 1.03)% -- -- 1.74%
- -----------------------------------------------------------------------------------------------------
EQ/High Yield ( 9.02)% (2.24)% 4.69% 5.04%
- -----------------------------------------------------------------------------------------------------
EQ/International Equity Index (13.00)% -- -- ( 3.45)%
- -----------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth -- -- -- (35.99)%
- -----------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 7.57% -- -- 11.60%
- -----------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies ( 7.23)% -- -- 7.44%
- -----------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust ( 8.12)% -- -- ( 8.12)%
- -----------------------------------------------------------------------------------------------------
EQ/MFS Research ( 7.93)% -- -- 3.92%
- -----------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value ( 5.45)% -- -- 3.44%
- -----------------------------------------------------------------------------------------------------
EQ/Small Company Index 1.42% -- -- 1.79%
- -----------------------------------------------------------------------------------------------------
* The variable option inception dates are: EQ/Aggressive Stock, EQ/Alliance
Common Stock, EQ/Alliance Global, EQ/Alliance Growth and Income, EQ/Alliance
Growth Investors, EQ/Alliance Intermediate Government Securities,
EQ/Alliance International, EQ/Alliance Money Market, EQ/Equity 500 Index and
EQ/High Yield (May 1, 1995); EQ/Alliance Small Cap Growth, EQ/FI Small/Mid
Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth Companies,
EQ/MFS Research and EQ/Putnam Growth & Income Value (May 1, 1997);
EQ/Emerging Markets Equity (September 2, 1997); EQ/International Equity
Index and EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and
EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier Growth,
EQ/Capital Guardian Research and EQ/Capital Guardian U.S. Equity (May 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
5, 2000); EQ/Balanced and EQ/Bernstein Diversified Value (May 18, 2001);
EQ/Calvert Socially Responsible and EQ/Marsico Focus (September 4, 2001);
AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA Premier VIP
International Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier VIP
Large Cap Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP Small/Mid
Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology,
EQ/Alliance Quality Bond, EQ/Capital Guardian International, EQ/J.P. Morgan
Core Bond, EQ/Lazard Small Cap Value, EQ/Putnam International Equity and
EQ/Putnam Voyager (January 14, 2002). No performance information is provided
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Calvert Socially
Responsible (September 1, 1999); EQ/Alliance Technology (May 1, 2000);
EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid Cap and
EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus (August 31,
2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA Premier
VIP International Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier
VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP
Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value and AXA Premier
VIP Technology (December 31, 2001). No performance information is provided
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
52 Investment performance
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) Elite(SM) performance relative to other variable
annuity products. The Lipper Survey contains two different universes, which
reflect different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
withdrawal charge, the optional baseBUILDER benefit charge, the optional
Protection Plus benefit charge, the Protection Plus charge, and any charge
designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. For more information, see "Yield Information for
the EQ/Alliance Money Market Option, EQ/Alliance Quality Bond Option and
EQ/High Yield Option" in the SAI.
Investment performance 53
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2001, is considered to be a part of this prospectus because they are
incorporated by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
54 Incorporation of certain documents by reference
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account No. 45 and No. 49 with the same daily asset
charges of 1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS
BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001
- ------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
------------------------------------------------------------
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock
Unit value $ 49.16 $ 66.77 $ 78.30 $ 67.13 $ 68.19
Separate Account 45 number of units outstanding (000's) 73 65 16 -- --
Separate Account 49 number of units outstanding (000's) 402 420 141 16 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock
Unit value $203.81 $ 232.08 $ 275.01 $ 223.79 $ 176.22
Separate Account 45 number of units outstanding (000's) 380 310 66 -- --
Separate Account 49 number of units outstanding (000's) 661 618 255 35 1
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global
Unit value $ 26.96 $ 34.37 $ 43.04 -- --
Separate Account 45 number of units outstanding (000's) 726 602 97 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income
Unit value $ 25.00 $ 25.80 $ 24.13 -- --
Separate Account 45 number of units outstanding (000's) 3,407 1,662 342 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors
Unit value $ 33.29 $ 38.72 $ 42.29 -- --
Separate Account 45 number of units outstanding (000's) 933 792 149 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities
Unit value $ 16.72 $ 15.75 $ 14.70 -- --
Separate Account 45 number of units outstanding (000's) 2,545 486 59 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International
Unit value $ 9.48 $ 12.56 $ 16.61 -- --
Separate Account 45 number of units outstanding (000's) 404 302 38 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market
Unit value $ 27.16 $ 26.65 $ 25.55 $ 24.80 $ 23.98
Separate Account 45 number of units outstanding (000's) 3,954 1,882 549 -- --
Separate Account 49 number of units outstanding (000's) 13,759 9,875 5,805 349 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth
Unit value $ 7.07 $ 9.45 $ 11.77 -- --
Separate Account 45 number of units outstanding (000's) 5,608 4,909 1,112 -- --
Separate Account 49 number of units outstanding (000's) 18,765 17,412 5,630 -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth
Unit value $ 14.11 $ 16.53 $ 14.78 $ 11.77 $ 12.52
Separate Account 45 number of units outstanding (000's) 1,276 718 30 -- --
Separate Account 49 number of units outstanding (000's) 3,423 3,189 818 211 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology
Unit value $ 4.91 $ 6.60 -- -- --
Separate Account 45 number of units outstanding (000's) 3,001 1,672 -- -- --
Separate Account 49 number of units outstanding (000's) 7,562 5,505 -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
------------------------------------------------------------
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions
Unit value $ 6.88 $ 8.28 -- -- --
Separate Account 45 number of units outstanding (000's) 213 29 -- -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive
Unit value $ 4.06 $ 6.21 -- -- --
Separate Account 45 number of units outstanding (000's) 252 66 -- -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Balanced
Unit value $39.15 -- -- -- --
Separate Account 45 number of units outstanding (000's) 1,005 -- -- -- --
Separate Account 49 number of units outstanding (000's) 97 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value
Unit value $11.78 $ 11.61 $ 12.04 $ 11.81 --
Separate Account 45 number of units outstanding (000's) 1,138 -- -- -- --
Separate Account 49 number of units outstanding (000's) 6,000 3,700 1,532 315 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible
Unit value $ 8.62 -- -- -- --
Separate Account 45 number of units outstanding (000's) 6 -- -- -- --
Separate Account 49 number of units outstanding (000's) 13 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International
Unit value $ 8.64 $ 11.09 $ 13.93 -- --
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 5,697 5,514 1,286 -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research
Unit value $10.65 $ 11.04 $ 10.60 -- --
Separate Account 45 number of units outstanding (000's) 166 112 13 -- --
Separate Account 49 number of units outstanding (000's) 3,151 2,953 987 -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U. S. Equity
Unit value $10.09 $ 10.46 $ 10.26 -- --
Separate Account 45 number of units outstanding (000's) 337 155 31 -- --
Separate Account 49 number of units outstanding (000's) 6,886 5,538 2,436 -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity
Unit value $ 6.04 $ 6.47 $ 10.97 $ 5.70 --
Separate Account 45 number of units outstanding (000's) 821 715 126 -- --
Separate Account 49 number of units outstanding (000's) 3,043 2,958 962 203 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index
Unit value $23.93 $ 27.69 -- -- --
Separate Account 45 number of units outstanding (000's) 1,038 734 -- -- --
Separate Account 49 number of units outstanding (000's) 6,601 6,057 -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega
Unit value $ 7.66 $ 9.38 $ 10.80 -- --
Separate Account 45 number of units outstanding (000's) 90 17 8 -- --
Separate Account 49 number of units outstanding (000's) 141 78 6 -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap
Unit value $ 8.51 $ 9.99 $ 10.45 -- --
Separate Account 45 number of units outstanding (000's) 932 126 -- -- --
Separate Account 49 number of units outstanding (000's) 2,644 617 -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value
Unit value $11.07 $ 10.82 $ 10.45 -- --
Separate Account 45 number of units outstanding (000's) 1,487 87 18 -- --
Separate Account 49 number of units outstanding (000's) 2,090 251 -- -- --
- ------------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
- ------------------------------------------------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
------------------------------------------------------------
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
EQ/High Yield
Unit value $ 22.86 $ 23.07 $ 25.73 $ 27.12 $ 29.13
Separate Account 45 number of units outstanding (000's) 500 219 35 -- --
Separate Account 49 number of units outstanding (000's) 1,835 1,211 574 170 2
- ------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index
Unit value $ 8.81 $ 12.02 $ 14.82 $ 11.82 --
Separate Account 45 number of units outstanding (000's) 254 147 33 -- --
Separate Account 49 number of units outstanding (000's) 2,518 2,531 992 248 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond
Unit value $ 12.10 $ 11.40 $ 10.39 $ 10.73 --
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 10,537 5,112 2,026 379 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth
Unit value $ 6.36 $ 8.39 -- -- --
Separate Account 45 number of units outstanding (000's) 1,187 295 -- -- --
Separate Account 49 number of units outstanding (000's) 3,856 1,315 -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value
Unit value $ 12.37 $ 10.68 $ 9.15 $ 9.14 --
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 3,274 2,109 98 344 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus
Unit value $ 11.33 -- -- -- --
Separate Account 45 number of units outstanding (000's) 24 -- -- -- --
Separate Account 49 number of units outstanding (000's) 78 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity
Unit value $ 17.00 $ 16.37 $ 14.88 $ 12.71 $ 11.58
Separate Account 45 number of units outstanding (000's) 1,305 431 163 -- --
Separate Account 49 number of units outstanding (000's) 1,559 1,079 173 -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies
Unit value $ 14.20 $ 21.88 $ 27.40 $ 16.03 $ 12.11
Separate Account 45 number of units outstanding (000's) 1,966 1,834 383 -- --
Separate Account 49 number of units outstanding (000's) 5,707 5,759 1,680 200 2
- ------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust
Unit value $ 8.64 $ 10.45 $ 10.70 -- --
Separate Account 45 number of units outstanding (000's) 543 359 103 -- --
Separate Account 49 number of units outstanding (000's) 8,655 7,052 2,906 -- --
- ------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research
Unit value $ 12.18 $ 15.84 $ 16.99 $ 14.02 $ 11.48
Separate Account 45 number of units outstanding (000's) 860 712 71 -- --
Separate Account 49 number of units outstanding (000's) 6,188 5,917 1,725 410 1
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
Unit value $ 11.94 $ 13.02 $ 12.39 $ 12.76 $ 11.50
Separate Account 45 number of units outstanding (000's) 287 124 12 -- --
Separate Account 49 number of units outstanding (000's) 4,156 1,755 978 714 17
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity
Unit value $ 13.39 $ 17.34 $ 20.10 $ 12.75 $ 10.84
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 3,126 2,033 771 422 4
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth
Unit value $ 12.75 $ 17.16 $ 21.20 $ 16.54 $ 12.33
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
Separate Account 49 number of units outstanding (000's) 2,221 1,658 576 282 --
- ------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial
information A-3
- ------------------------------------------------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------
For the years ending December 31,
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index
Unit value $ 10.90 $ 10.86 $ 11.42 $ 9.61 --
Separate Account 45 number of units outstanding (000's) 239 113 23 -- --
Separate Account 49 number of units outstanding (000's) 1,535 1,382 522 211 --
- ------------------------------------------------------------------------------------------------------------------------
EQ/T. Rowe Price International Stock
Unit value $ 8.71 $ 11.32 $ 14.15 -- --
Separate Account 45 number of units outstanding (000's) 614 368 37 -- --
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
A-4 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Elite(SM) QP contract should discuss with their tax advisers whether this is an
appropriate investment vehicle for the employer's plan. Trustees should consider
whether the plan provisions permit the investment of plan assets in the QP
contract, the distribution of such an annuity, the purchase of the guaranteed
minimum income benefit and the payment of death benefits in accordance with the
requirements of the federal income tax rules. The QP contract and this
prospectus should be reviewed in full, and the following factors, among others,
should be noted. Assuming continued plan qualification and operation, earnings
on qualified plan assets will accumulate value on a tax-deferred basis even if
the plan is not funded by the Equitable Accumulator(R) Elite(SM) QP contract or
another annuity. Therefore, you should purchase an Equitable Accumulator(R)
Elite(SM) QP contract to fund a plan for the contract's features and benefits
other than tax deferral, after considering the relative costs and benefits of
annuity contracts and other types of arrangements and funding vehicles. This QP
contract accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge and/or market value adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70-1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 601/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,846 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- --------------------------------------------------------------------------------
Hypothetical assumed
rate to maturity on
February 15, 2007
----------------------
5.00% 9.00%
- --------------------------------------------------------------------------------
As of February 15, 2007 (before withdrawal)
- --------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- --------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- --------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- --------------------------------------------------------------------------------
On February 15, 2007 (after withdrawal)
- --------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- --------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,499 $ 54,851
- --------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- --------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- --------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- --------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Appendix IV: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market or EQ/Alliance Quality Bond
options or the fixed maturity options), no additional contributions, no
transfers, no withdrawals and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
- --------------------------------------------------------------------------------
End of 5% roll up to age 80 Annual ratchet to age 80
contract guaranteed minimum guaranteed minimum
year Account value death benefit(1) death benefit
- --------------------------------------------------------------------------------
1 $105,000 $ 105,000(1) $ 105,000(3)
- --------------------------------------------------------------------------------
2 $115,500 $ 110,250(2) $ 115,500(3)
- --------------------------------------------------------------------------------
3 $129,360 $ 115,763(2) $ 129,360(3)
- --------------------------------------------------------------------------------
4 $103,488 $ 121,551(1) $ 129,360(4)
- --------------------------------------------------------------------------------
5 $113,837 $ 127,628(1) $ 129,360(4)
- --------------------------------------------------------------------------------
6 $127,497 $ 134,010(1) $ 129,360(4)
- --------------------------------------------------------------------------------
7 $127,497 $ 140,710(1) $ 129,360(4)
- --------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80*
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the guaranteed minimum death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current guaranteed minimum death
benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is the guaranteed minimum death benefit at the end of the prior year
since it is equal to or higher than the current account value.
- ----------
* If your contract is issued in the state of Washington, the applicable
crediting rate would be 3%, and, therefore, the values shown would be lower.
Appendix IV: Guaranteed minimum death benefit example D-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option 23
Distribution of the contracts 24
Financial Statements 24
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR(R) ELITE(SM) STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator(R) Elite(SM)
P.O. Box 1547 Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator(R) Elite(SM) SAI dated May 1, 2002.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
Equitable Accumulator(R) Elite(SM) II
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) ELITE(SM) II?
Equitable Accumulator(R) Elite(SM) II is a deferred annuity contract issued by
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
This contract may not currently be available in all states.
- --------------------------------------------------------------------------------
Variable investment options
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager(2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
- --------------------------------------------------------------------------------
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"). Your
investment results in a variable investment option will depend on the
investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $10,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
X00285
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) ELITE(SM) II
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Elite(SM) II at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 21
Your benefit base 22
Annuity purchase factors 22
Our baseBUILDER option 22
Guaranteed minimum death benefit 23
Your right to cancel within a certain number of days 24
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 26
- --------------------------------------------------------------------------------
Your account value and cash value 26
Your contract's value in the variable investment options 26
Your contract's value in the fixed maturity options 26
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 27
- --------------------------------------------------------------------------------
Transferring your account value 27
Disruptive transfer activity 27
Dollar cost averaging 27
Rebalancing your account value 27
- ----------------------
"We," "our," and "us" refer to Equitable Life. When we use the word "contract"
it also includes certificates that are When we address the reader of this
prospectus with words such as issued under group contracts in some states.
"you" and "your," we mean the person who has the right or responsibility that
the prospectus is discussing at that point. This is usually the contract owner.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 29
- --------------------------------------------------------------------------------
Withdrawing your account value 29
How withdrawals are taken from your account value 30
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 30
Loans under Rollover TSA contracts 30
Surrendering your contract to receive its cash value 31
When to expect payments 31
Your annuity payout options 31
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 34
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 34
Charges that the Trusts deduct 35
Group or sponsored arrangements 35
Other distribution arrangements 36
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 37
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 37
How death benefit payment is made 37
Beneficiary continuation option 38
- --------------------------------------------------------------------------------
7. TAX INFORMATION 39
- --------------------------------------------------------------------------------
Overview 39
Buying a contract to fund a retirement arrangement 39
Transfers among investment options 39
Taxation of nonqualified annuities 39
Individual retirement arrangements (IRAs) 41
Special rules for contracts funding qualified plans 42
Tax-Sheltered Annuity contracts (TSAs) 42
Federal and state income tax withholding and
information reporting 43
Impact of taxes to Equitable Life 44
- --------------------------------------------------------------------------------
8. MORE INFORMATION 45
- --------------------------------------------------------------------------------
About Separate Account No. 49 45
About the Trusts 45
About our fixed maturity options 45
About the general account 46
About other methods of payment 46
Dates and prices at which contract events occur 47
About your voting rights 47
About legal proceedings 48
About our independent accountants 48
Financial statements 48
Transfers of ownership, collateral assignments, loans
and borrowing 48
Distribution of the contracts 48
- --------------------------------------------------------------------------------
9. INVESTMENT PERFORMANCE 50
- --------------------------------------------------------------------------------
Communicating performance data 52
- --------------------------------------------------------------------------------
10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 53
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE IN
TERM PROSPECTUS
account value 26
annuitant 15
annuity payout options 31
annuity purchase factors 22
baseBUILDER 22
beneficiary 37
benefit base 22
business day 47
cash value 26
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 41
regular contributions 41
rollovers and direct transfers 41
conversion contributions 42
contributions to traditional IRAs 41
regular contributions 41
rollovers and transfers 41
disruptive transfer activity 27
EQAccess 6
ERISA 30
fixed maturity options 21
guaranteed minimum death benefit 23
guaranteed minimum income benefit 22
IRA cover
PAGE IN
TERM PROSPECTUS
IRS 39
investment options 17
loan reserve account 31
market adjusted amount 21
market timing 27
market value adjustment 21
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 41
SAI cover
SEC cover
TOPS 6
TSA 42
traditional IRA 41
Trusts cover
unit 26
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your registered representative can provide further explanation about
your contract or supplemental materials.
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL
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Equitable Accumulator(R) Elite(SM) II
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY
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Equitable Accumulator(R) Elite(SM) II
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR
MAIL
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Equitable Accumulator(R) Elite(SM) II
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY
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Equitable Accumulator(R) Elite(SM) II
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
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TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
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TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options (not available through
EQAccess);
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http:// www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith, or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options later in this Prospectus").
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CUSTOMER SERVICE REPRESENTATIVE:
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You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your registered representative
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests
would normally be the owner. If there are joint owners
all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Elite(SM) II at a glance -- key features
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PROFESSIONAL INVESTMENT Equitable Accumulator(R)Elite(SM) II's variable investment options invest in different portfolios
managed by management professional investment advisers.
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FIXED MATURITY OPTIONS o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value
adjustment due to differences in interest rates. This may increase or decrease any value that you
have left in that
fixed maturity option. If you surrender your contract, a market value adjustment may also apply.
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TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
If you are purchasing an annuity contract as an Individual Retirement Annuity
(IRA), you should be aware that such annuities do not provide tax deferral
benefits beyond those already provided by the Internal Revenue Code. Before
purchasing one of these annuities, you should consider whether its features and
benefits beyond tax deferral meet your needs and goals. You may also want to
consider the relative features, benefits and costs of these annuities compared
with any other investment that you may use in connection with your retirement
plan or arrangement. (For more information, see "Tax information," later in this
Prospectus and in the SAI.)
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BASEBUILDER(R) PROTECTION baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum death benefit
provided under the contract. The guaranteed minimum income benefit provides income protection for you
while the annuitant lives. The guaranteed minimum death benefit provides a death benefit for the
beneficiary should the annuitant die.
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CONTRIBUTION AMOUNTS o Initial minimum: $10,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
Maximum contribution limitations may apply.
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ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract.
You may also incur income tax and a tax penalty.
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PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
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ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness or confinement to a nursing home
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
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8 Equitable Accumulator(R) Elite(SM) II at a glance -- key features
FEES AND CHARGES o Daily charges on amounts invested in the variable
investment options for mortality and expense risks,
administrative charges and distribution charges at an
annual rate of 1.80%.
o Annual 0.30% benefit base charge for the optional
baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout
option or the contract date anniversary after the
annuitant reaches age 85 (age 83 in Oregon), whichever
occurs first. The benefit base is described under "Your
benefit base" in "Contract features and benefits" later
in this Prospectus. If you don't elect baseBUILDER, you
still receive a guaranteed minimum death benefit under
your contract at no additional charge.
o Annual 0.20% Protection Plus charge for this optional
death benefit.
o No sales charge deducted at the time you make
contributions. During the first three contract years
following a contribution, a charge will be deducted
from amounts that you withdraw that exceed 10% of your
account value. We use the account value on the most
recent contract date anniversary to calculate the 10%
amount available. The charge is 8%. There is no
withdrawal charge in the fourth and later contract
years following a contribution.
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The "contract date" is the effective date of a
contract. This usually is the business day we receive
the properly completed and signed application, along
with any other required documents, and your initial
contribution. Your contract date will be shown in your
contract. The 12-month period beginning on your
contract date and each 12-month period after that date
is a "contract year." The end of each 12-month period
is your "contract date anniversary."
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o We deduct a charge designed to approximate certain
taxes that may be imposed on us, such as premium taxes
in your state. This charge is generally deducted from
the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from
amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of the Trusts' portfolios are
calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses
include management fees ranging from 0.25% to 1.20%
annually, 12b-1 fees of 0.25% annually and other
expenses.
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ANNUITANT ISSUE AGES NQ: 0-85
Rollover IRA,
Roth Conversion IRA and Rollover TSA: 20-85 QP: 20-75
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Elite(SM) II at a glance -- key features 9
Fee table
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The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this Prospectus.
The fixed maturity options are not covered by the fee table and examples.
However, the withdrawal charge does apply to the fixed maturity options. A
market value adjustment (up or down) may apply as a result of a withdrawal,
transfer or surrender of amounts from a fixed maturity option.
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL
PERCENTAGE OF DAILY NET ASSETS
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Mortality and expense risks(1) 1.10%
Administrative 0.25%
Distribution 0.45%
----
Total annual expenses 1.80%
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN
TRANSACTIONS
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Withdrawal charge as a percentage of contributions (deducted if you Contract
surrender your contract or make certain withdrawals in any of the first year
three years after we receive a contribution. For each contribution, we 1 ............................8.00%
consider the contract year in which we receive that contribution to be 2 ............................8.00%
"contract year 1")(2) 3 ............................8.00%
4+ ...........................0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL
BENEFIT
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BASEBUILDER BENEFIT CHARGE (calculated as a percentage of the
benefit base. Deducted annually on each contract date anniversary)(3) 0.30%
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PROTECTION PLUS BENEFIT CHARGE (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary) 0.20%
Fee table 10
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
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NET
TOTAL ANNUAL
MANAGEMENT FEES OTHER EXPENSES EXPENSES (AFTER
(AFTER EXPENSE (AFTER EXPENSE EXPENSE
PORTFOLIO NAME LIMITATION)(4) 12B-1 FEES(5) LIMITATION)(6) LIMITATION)(7)
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AXA PREMIER VIP TRUST:
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AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
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EQ ADVISORS TRUST:
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EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
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Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal
amount and upon surrender of a contract.
(3) The benefit base is described under "Your guaranteed minimum income benefit
under baseBUILDER" in "Contract features and benefits" later in this
Prospectus.
11 Fee table
(4) The management fees shown for each portfolio cannot be increased without a
vote of each portfolio's shareholders. See footnote (7) for any expense
limitation agreement information.
(5) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by The Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(6) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Initial seed capital was invested for the Portfolios
of the AXA Premier VIP Trust on December 31, 2001 thus, "Other Expenses"
shown are estimated. See footnote (7) for any expense limitation
agreements information.
(7) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
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MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
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AXA PREMIER VIP TRUST:
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AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
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EQ ADVISORS TRUST:
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EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
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MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
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EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
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Fee table 12
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected baseBUILDER with a 5% roll up to age 80 or annual ratchet to age 80
guaranteed minimum death benefit and Protection Plus) would pay in the
situation illustrated. We assume that a $1,000 contribution is invested in one
of the variable investment options listed and a 5% annual return is earned on
the assets in that option.(1) Since the Protection Plus feature is only
available under certain contracts expenses would be lower for contracts that do
not have this feature.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the examples.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
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IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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AXA Premier VIP Core Bond $ 110.98 $ 180.86 $ 173.42 $ 367.11
AXA Premier VIP Health Care $ 120.43 $ 208.51 $ 218.26 $ 450.12
AXA Premier VIP International Equity $ 119.90 $ 206.99 $ 215.82 $ 445.71
AXA Premier VIP Large Cap Core Equity $ 115.18 $ 193.22 $ 193.57 $ 404.96
AXA Premier VIP Large Cap Growth $ 115.18 $ 193.22 $ 193.57 $ 404.96
AXA Premier VIP Large Cap Value $ 115.18 $ 193.22 $ 193.57 $ 404.96
AXA Premier VIP Small/Mid Cap Growth $ 117.80 $ 200.88 $ 205.98 $ 427.84
AXA Premier VIP Small/Mid Cap Value $ 117.80 $ 200.88 $ 205.98 $ 427.84
AXA Premier VIP Technology $ 120.43 $ 208.51 $ 218.26 $ 450.12
EQ/Aggressive Stock $ 110.87 $ 180.55 $ 172.91 $ 366.14
EQ/Alliance Common Stock $ 109.19 $ 175.58 $ 164.75 $ 350.54
EQ/Alliance Global $ 112.55 $ 185.51 $ 181.01 $ 381.49
EQ/Alliance Growth and Income $ 110.24 $ 178.69 $ 169.85 $ 360.32
EQ/Alliance Growth Investors $ 110.24 $ 178.69 $ 169.85 $ 360.32
EQ/Alliance Intermediate Government Securities $ 110.14 $ 178.38 $ 169.34 $ 359.35
EQ/Alliance International $ 115.18 $ 193.22 $ 193.57 $ 404.96
EQ/Alliance Money Market $ 107.83 $ 171.53 $ 158.07 $ 337.67
EQ/Alliance Premier Growth $ 113.08 $ 187.05 $ 183.53 $ 386.23
EQ/Alliance Quality Bond $ 109.93 $ 177.76 $ 168.32 $ 357.40
EQ/Alliance Small Cap Growth $ 112.13 $ 184.27 $ 178.99 $ 377.67
EQ/Alliance Technology $ 113.08 $ 187.05 $ 183.53 $ 386.23
EQ/AXP New Dimensions $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/AXP Strategy Aggressive $ 111.50 $ 182.41 $ 175.95 $ 371.93
EQ/Balanced $ 110.45 $ 179.31 $ 170.87 $ 362.26
EQ/Bernstein Diversified Value $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Calvert Socially Responsible $ 112.03 $ 183.96 $ 178.49 $ 376.72
EQ/Capital Guardian International $ 113.60 $ 188.60 $ 186.05 $ 390.95
EQ/Capital Guardian Research $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Capital Guardian U.S. Equity $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Emerging Markets Equity $ 119.90 $ 206.99 $ 215.82 $ 445.71
EQ/Equity 500 Index $ 106.88 $ 168.72 $ 153.43 $ 328.66
EQ/Evergreen Omega $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/FI Mid Cap $ 111.50 $ 182.41 $ 175.95 $ 371.93
EQ/FI Small/Mid Cap Value $ 112.55 $ 185.51 $ 181.01 $ 381.49
EQ/High Yield $ 110.66 $ 179.93 $ 171.89 $ 364.20
EQ/International Equity Index $ 112.55 $ 185.51 $ 181.01 $ 381.49
EQ/J.P. Morgan Core Bond $ 109.40 $ 176.20 $ 165.77 $ 352.50
EQ/Janus Large Cap Growth $ 113.08 $ 187.05 $ 183.53 $ 386.23
EQ/Lazard Small Cap Value $ 112.55 $ 185.51 $ 181.01 $ 381.49
EQ/Marsico Focus $ 113.08 $ 187.05 $ 183.53 $ 386.23
EQ/Mercury Basic Value Equity $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/MFS Emerging Growth Companies $ 111.19 $ 181.48 $ 174.43 $ 369.04
EQ/MFS Investors Trust $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/MFS Research $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Putnam Growth & Income Value $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Putnam International Equity $ 114.13 $ 190.14 $ 188.56 $ 395.65
EQ/Putnam Voyager $ 110.98 $ 180.86 $ 173.42 $ 367.11
EQ/Small Company Index $ 109.93 $ 177.76 $ 168.32 $ 357.40
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- --------------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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AXA Premier VIP Core Bond $ 30.98 $ 100.86 $ 173.42 $ 367.11
AXA Premier VIP Health Care $ 40.43 $ 128.51 $ 218.26 $ 450.12
AXA Premier VIP International Equity $ 39.90 $ 126.99 $ 215.82 $ 445.71
AXA Premier VIP Large Cap Core Equity $ 35.18 $ 113.22 $ 193.57 $ 404.96
AXA Premier VIP Large Cap Growth $ 35.18 $ 113.22 $ 193.57 $ 404.96
AXA Premier VIP Large Cap Value $ 35.18 $ 113.22 $ 193.57 $ 404.96
AXA Premier VIP Small/Mid Cap Growth $ 37.80 $ 120.88 $ 205.98 $ 427.84
AXA Premier VIP Small/Mid Cap Value $ 37.80 $ 120.88 $ 205.98 $ 427.84
AXA Premier VIP Technology $ 40.43 $ 128.51 $ 218.26 $ 450.12
EQ/Aggressive Stock $ 30.87 $ 100.55 $ 172.91 $ 366.14
EQ/Alliance Common Stock $ 29.19 $ 95.58 $ 164.75 $ 350.54
EQ/Alliance Global $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/Alliance Growth and Income $ 30.24 $ 98.69 $ 169.85 $ 360.32
EQ/Alliance Growth Investors $ 30.24 $ 98.69 $ 169.85 $ 360.32
EQ/Alliance Intermediate Government Securities $ 30.14 $ 98.38 $ 169.34 $ 359.35
EQ/Alliance International $ 35.18 $ 113.22 $ 193.57 $ 404.96
EQ/Alliance Money Market $ 27.82 $ 91.53 $ 158.07 $ 337.67
EQ/Alliance Premier Growth $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/Alliance Quality Bond $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Alliance Small Cap Growth $ 32.13 $ 104.27 $ 178.99 $ 377.67
EQ/Alliance Technology $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/AXP New Dimensions $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/AXP Strategy Aggressive $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/Balanced $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/Bernstein Diversified Value $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Calvert Socially Responsible $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Capital Guardian International $ 33.60 $ 108.60 $ 186.05 $ 390.95
EQ/Capital Guardian Research $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Capital Guardian U.S. Equity $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Emerging Markets Equity $ 39.90 $ 126.99 $ 215.82 $ 445.71
EQ/Equity 500 Index $ 26.88 $ 88.72 $ 153.43 $ 328.66
EQ/Evergreen Omega $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/FI Mid Cap $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/FI Small/Mid Cap Value $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/High Yield $ 30.66 $ 99.93 $ 171.89 $ 364.20
EQ/International Equity Index $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/J.P. Morgan Core Bond $ 29.40 $ 96.20 $ 165.77 $ 352.50
EQ/Janus Large Cap Growth $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/Lazard Small Cap Value $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/Marsico Focus $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/Mercury Basic Value Equity $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/MFS Emerging Growth Companies $ 31.19 $ 101.48 $ 174.43 $ 369.04
EQ/MFS Investors Trust $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/MFS Research $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Putnam Growth & Income Value $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Putnam International Equity $ 34.13 $ 110.14 $ 188.56 $ 395.65
EQ/Putnam Voyager $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Small Company Index $ 29.93 $ 97.76 $ 168.32 $ 357.40
- --------------------------------------------------------------------------------------------------
13 Fee table
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money" later
in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $5.44 based on the average amount
applied to annuity payout options in 2001. See "Annuity administrative fee" in
"Charges and expenses" later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
Fee table 14
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $10,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. In some states, our rules
may vary. All ages in the table refer to the age of the annuitant named in the
contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
AVAILABLE FOR
ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTONS
- --------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 85 o After-tax money. o No additional contributions after age 88.
o Paid to us by check or transfer of
contract value in a tax-deferred
exchange under Section 1035 of the
Internal Revenue Code.
- --------------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 85 o Eligible rollover distributions o No rollover or direct transfer contributions
from TSA contracts or other 403(b) after age 88.
arrangements, qualified plans, and
governmental EDC plans. o Contributions after age 70-1/2 must be net of
required minimum distributions.
o Rollovers from another traditional
individual retirement arrangement. o Although we accept regular IRA contributions
(limited to $3,000 for the calendar year 2002)
o Direct custodian-to-custodian under Rollover IRA contracts, we intend that
transfers from another traditional this contract be used primarily for
individual retirement arrangement. rollover and direct transfer contributions.
o Regular IRA contributions. o Additional catch-up contributions totalling up
to $500 can be made for the calendar year 2002
o For the calendar year 2002 and later, where the owner is at least age 50 but under
additional "catch-up" contributions. age 70-1/2 at any time during 2002.
- --------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA contributions after age 88.
o Conversion rollovers from a o Conversion rollovers after age 70-1/2 must be
traditional IRA. net of required minimum distributions for the
traditional IRA you are rolling over.
o Direct transfers from another Roth
IRA. o You cannot roll over funds from a traditional
IRA if your adjusted gross income is $100,000
o Regular Roth IRA contributions. or more.
o For the calendar year 2002 and o Although we accept regular Roth IRA contribu-
later, additional catch-up tions (limited to $3,000 for the calendar year
contributions. 2002) under Roth IRA contracts, we intend that
this contract be used primarily for rollover and
direct transfer contributions.
o Additional catch-up contributions totalling up
to $500 can be made for the calendar year 2002
where the owner is at least age 50 at any time
during 2002.
- --------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- --------------------------------------------------------------------------------------------------------------------------------
AVAILABLE FOR
ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTONS
- --------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o Direct transfers of pre-tax o No additional rollover or direct transfer
funds from anothercontract or contributions after age 88.
arrangement under Section 403(b)
of the Internal Revenue Code, o Rollover or direct transfer contributions
complying with IRS Revenue after age 70-1/2 must be net of any
Ruling 90-24. required minimum distributions.
o Eligible rollover distributions of o Employer-remitted contributions are not
pre-tax funds from other 403(b) permitted.
plans, qualified plans, govern-
mental EDC plans and Traditional
IRAs.
- --------------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o Only transfer contributions from o Regular ongoing payroll contributions are not
qualified plan trust as a change permitted.
of investment vehicle under the
plan. o Only one additional transfer contribution
may be made during a contract year.
o The plan must be qualified under
Section 401(a) of the Internal o No additional transfer contributions after
Revenue Code. age 76.
o For 401(k) plans, transferred o For defined benefit plans, employee
contributions may only include contributions are not permitted, and we will
employee pre-tax contributions. not accept contributions that fund more than
80% of the actuarial value of the plan parti
normal retirement benefit.
o Contributions after age 70-1/2 must be net of
any required minimum distributions.
Please refer to Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- --------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Elite(SM) II contracts with the
same annuitant would then total more than $1,500,000. We reserve the right to
limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the registered representative
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options and the fixed
maturity options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
PORTFOLIOS OF THE TRUSTS
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Elite(SM) II contracts. These portfolios may even have the same manager(s)
and/or a similar name. However, there are numerous factors that can contribute
to differences in performance between two investments, particularly over short
periods of time. Such factors include the timing of stock purchases and sales;
differences in fund cash flows; and specific strategies employed by the
portfolio manager.
- ---------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors Inc.
income and capital appreciation Pacific Investment Mangement Company LLC
consistent with a prudent level of
risk
- -------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company LLP
- -------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Manangement, Inc.
Equity* through its Bernstein Investment Research
and Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
Oppenheimer Funds Inc.
- -------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Manangement, Inc.
Equity* through its Bernstein Investment Research
and Management Unit
AXA Premier VIP Large Cap Long-term growth of capital Janus Capital Management LLC
Growth* Thornburg Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital Management LP
Institutional Capital Corporation
MFS Investment Management
- -------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management LP
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- -------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management LP
Value* The Boston Company Asset Management, LLC
TCW Investment Management Company
- -------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management LP
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
Portfolio Name Objective Adviser(s)
- ---------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth Alliance Capital Management L.P.
of capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and increased income
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- --------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return Alliance Capital Management L.P
consistent with the Adviser's
determination of reasonable risk
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income Alliance Capital Management L.P
Government Securities* consistent with relative stability
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P
(including through its Bernstein
Investment Research and
Management Unit)
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current Alliance Capital Management L.P
income, preserve its assets and
maintain liquidity
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income Alliance Capital Management L.P
consistent with moderate risk of
capital
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of Alliance Capital Management L.P
capital
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Alliance Capital Management L.P
Current income is incidental to the
Portfolio's objective
- -------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
- -------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through Alliance Capital Management L.P
both appreciation of capital and Capital Guardian Trust Company
current income Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment Research
Management Unit
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses Alliance Capital Management L.P.,
that approximates the total return
performance of the S&P 500 Index,
including reinvestment of dividends,
at a risk level consistent with that
of the S&P 500 Index
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management Company,
LLC
- -------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- -------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- -------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return Alliance Capital Management L.P.,
through a combination of current
income and capital appreciation
- -------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
Portfolios of the Trusts (continued)
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Name Objective Adviser(s)
- ---------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as Deutsche Asset Management Inc.
possible (before deduction of
Portfolio expenses) the total return
of the MSCI EAFE Index
- -------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total return J.P. Morgan Investment Management, Inc.
consistent with moderate risk of
capital and maintenance of liquidity
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of Marsico Capital Management, LLC
capital
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and Mercury Advisors
secondarily, income
- -------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital MFS Investment Management
Companies growth
- -------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital MFS Investment Management
with a secondary objective to seek
reasonable current income
- -------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of MFS Investment Management
capital and future income
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income Putnam Investment Management, LLC.
Value is a secondary objective
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC.
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital Putnam Investment Management, LLC.
and any increased income that results
from this growth
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as Deutsche Asset Management, Inc.
possible (before deduction of
Portfolio expenses) the total return
of the Russell 2000 Index
- -------------------------------------------------------------------------------------------------------------------------------
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in all states. Check with your registered representative to see
if fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
Prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2003 through
2012. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the next
available fixed maturity option with the earliest maturity date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among two ways to allocate your contributions under your
contract: self-directed and principal assurance.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed
Contract features and benefits 21
maturity option's maturity date. The maturity date you select generally may not
be later than 10 years, or earlier than 7 years from your contract date. You
allocate the rest of your contribution to the variable investment options
however you choose.
For example, if your initial contribution is $25,000, and on February 15, 2002,
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $14,507.17 to that fixed maturity option and the balance to your
choice of variable investment options. On the maturity date your value in the
fixed maturity option would be $25,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options, or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information" later in this Prospectus and in the SAI.
Please check with your registered representative if the principal assurance
allocation feature is available in your state.
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% (3% in Washington) roll up to age 80 guaranteed minimum death benefit.
Your benefit base is not an account value or a cash value. See "Our baseBUILDER
option" and "Guaranteed minimum death benefit" below. The benefit base is equal
to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money" later in this Prospectus); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit.
The effective annual interest rate credited to the benefit base is:
o 5% (3% in Washington for purposes of calculating the guaranteed minimum
death benefit only) for the benefit base with respect to the variable
investment options (other than the AXA Premier VIP Core Bond, EQ/Alliance
Intermediate Government Securities, EQ/Alliance Money Market and
EQ/Alliance Quality Bond options); and
o 3% for the benefit base with respect to the AXA Premier VIP Core Bond,
EQ/Alliance Intermediate Government Securities. EQ/Alliance Money Market
and EQ/Alliance Quality Bond options, the fixed maturity options and the
loan reserve account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract date anniversary
following the annuitant's 80th birthday.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our baseBUILDER
option" and annuity payout options are discussed in "Accessing your money"
later in this Prospectus. The guaranteed annuity purchase factors are those
factors specified in your contract. The current annuity purchase factors are
those factors that are in effect at any given time. Annuity purchase factors
are based on interest rates, mortality tables, frequency of payments, the form
of annuity benefit and the annuitant's (and any joint annuitant's) age and sex
in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses" later in this Prospectus.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability. For contracts issued in Oregon, only the Income Manager
life with a period certain payout annuity contract is available. You choose
which of these payout options you want and whether you want the option to be
paid on a single or joint life basis at the time you exercise your guaranteed
minimum income benefit. The maximum period certain available under the Income
Manager payout option is 10 years. This period may be shorter, depending on the
annuitant's age when you exercise your guaranteed minimum income benefit and
the type of contract you own. We may also make other forms of payout options
available. For a description of payout options, see "Your annuity payout
options" in "Accessing your money" later in this Prospectus.
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The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
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When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base less any outstanding loan plus accrued interest
(applies to Rollover TSA only) at guaranteed annuity purchase factors or (ii)
the income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will
22 Contract features and benefits
begin receiving payments one payment period after the annuity payout option is
issued. Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death. There is no continuation of benefits
following the annuitant's (or joint annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below
illustrates the guaranteed minimum income benefit amounts per $100,000 of
initial contribution, for a male annuitant age 60 (at issue) on the contract
date anniversaries indicated, who has elected the life annuity fixed payout
option, using the guaranteed annuity purchase factors as of the date of this
prospectus, assuming no additional contributions, withdrawals or loans under
Rollover TSA contracts, and assuming there were no allocations to the AXA
Premier VIP Core Bond, EQ/Alliance Intermediate Government Securities,
EQ/Alliance Money Market, EQ/Alliance Quality Bond options, the fixed maturity
options or the loan reserve account.
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GUARANTEED MINIMUM INCOME
CONTRACT DATE BENEFIT -- ANNUAL INCOME
ANNIVERSARY AT EXERCISE PAYABLE FOR LIFE
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10 $10,816
15 $16,132
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise
the benefit. You will begin receiving payments one payment period after the
annuity payout contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 (age 53 in
Oregon) when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary after the annuitant is age 60.
o If the annuitant was at least age 50 (age 54 in Oregon) and no older than
age 75 when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary beginning with the 10th (7th in Oregon) contract date
anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit is
the contract date anniversary following the annuitant's 85th (83rd in
Oregon) birthday; and
(ii) if the annuitant was age 75 when the contract was issued, the only time you
may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary (in Oregon, the first and
second contract date anniversary) that it becomes available;
(iii) if the annuitant was older than age 60 (age 63 in Oregon) at the time an
IRA, QP or Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can be
exercised; and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you don't elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% (3% in Washington) roll up to age 80" or the
"annual ratchet to age 80" guaranteed minimum death benefit when you apply for
a contract. Once you have made your election, you may not change it.
5% (3% IN WASHINGTON) ROLL UP TO AGE 80. The guaranteed minimum death benefit
is equal to the benefit base described earlier in "Your benefit base."
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed mini-
Contract features and benefits 23
mum death benefit by comparing your current guaranteed minimum death benefit to
your account value on that contract date anniversary. If your account value is
higher than your guaranteed minimum death benefit, we will increase your
guaranteed minimum death benefit to equal your account value. On the other
hand, if your account value on the contract date anniversary is less than your
guaranteed minimum death benefit, we will not adjust your guaranteed minimum
death benefit either up or down. If you make additional contributions, we will
increase your current guaranteed minimum death benefit by the dollar amount of
the contribution on the date the contribution is allocated to your investment
options.
If you take a withdrawal from your contract, we will reduce your guaranteed
minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
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Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix IV at the end of this Prospectus for an example of how we
calculate the guaranteed minimum death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract,
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus and in the
SAI for the potential tax consequences of electing to purchase the Protection
Plus feature in an NQ or IRA contract.
If the annuitant is 69 or younger when we issue your contract (or if the
successor owner/annuitant is 69 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
40% of the lesser of:
o the total net contributions or
o the death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including withdrawal charges and loans). Reduction on a pro rata basis means
that we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
If the annuitant is age 70 through 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 70 and 75 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
25% of the lesser of:
o the total net contributions (as described above) or
o the death benefit (as described above) less total net contributions
Protection Plus must be elected when the contract is first issued: neither the
owner nor the successor owner/annuitant can add it subsequently. Ask your
registered representative if this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct) and (ii) any positive or negative market
value adjustments in the fixed maturity options through the date we receive
your contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) or (ii) above). For any IRA contract returned
to us within seven days after you receive it, we are required to refund the
full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
24 Contract features and benefits
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your registered representative, can provide you with
the cancellation instructions.
Contract features and benefits 25
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applicable to Rollover
TSA contracts only). These amounts are subject to certain fees and charges
discussed under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) any
applicable withdrawal charges and (ii) the amount of any outstanding loan plus
accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
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Units measure your value in each variable investment option.
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The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge and/or the
Protection Plus benefit charge the number of units credited to your contract
will be reduced. A description of how unit values are calculated is found in
the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
26 Determining your contract's value
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Elite(SM) II contract is not designed
for professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
DOLLAR COST AVERAGING
Dollar cost averaging allows you to gradually transfer amounts from the
EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the other
variable investment options you select. This will cause you to purchase more
units if the unit value is low and fewer units if the unit value is high.
Therefore, you may get a lower average cost per unit over the long term. This
plan of investing, however, does not guarantee that you will earn a profit or
be protected against losses. You may not make transfers to the fixed maturity
options.
If your value in the EQ/Alliance Money Market option is at least $5,000, you
may choose, at any time, to have a specified dollar amount or percentage of
your value transferred from that option to the other variable investment
options. You can select to have transfers made on a monthly, quarterly, or
annual basis. The transfer date will be the same calendar day of the month as
the contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the transfers
until all amounts in the EQ/Alliance Money Market option have been transferred
out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The dollar cost averaging program will then
end. You may change the transfer amount once each contract year or cancel this
program at any time.
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You may not elect dollar cost averaging if you are participating in the
rebalancing program. There is no charge for the dollar cost averaging feature.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually on a contract year basis).
Transferring your money among investment options 27
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your registered representative
before electing the program.
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You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested. The rebalancing program will remain in effect unless you
request that it be canceled in writing. There is no charge for the rebalancing
feature.
You may not elect the rebalancing program if you are participating in the
dollar cost averaging program. Rebalancing is not available for amounts you
have allocated in the fixed maturity options.
28 Transferring your money among investment options
4. Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
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METHOD OF WITHDRAWAL
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LIFETIME
REQUIRED
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
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NQ Yes Yes No No
Rollover IRA Yes Yes Yes Yes
Roth
Conversion
IRA Yes Yes Yes No
QP Yes No No Yes
Rollover
TSA* Yes Yes No Yes
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* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Lump sum withdrawals will be subject to a withdrawal charge if they exceed the
10% free withdrawal amount (see "10% free withdrawal amount" in "Charges and
expenses" later in this Prospectus.) Under Rollover TSA contracts, if a loan is
outstanding, you may only take lump sum withdrawals as long as the cash value
remaining after any withdrawal equals at least 10% of the outstanding loan plus
accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 0.8% monthly, 2.4% quarterly and 10.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, the amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 10% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
Accessing your money 29
Substantially equal withdrawals are not subject to a withdrawal charge.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP and Rollover TSA contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually. See the
"Required minimum distributions" section in "Tax information" later in this
Prospectus and in the SAI for your specific type of retirement arrangement.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 10% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
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For Rollover IRA, QP and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
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HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% (3% in Washington) roll up to age 80 -- If you elect the 5% roll up to age
80 guaranteed minimum death benefit, your benefit base will be reduced on a
dollar-for-dollar basis as long as the sum of your withdrawals in a contract
year is 5% or less of the benefit base on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the benefit base on the most recent contract
date anniversary, that withdrawal and any subsequent withdrawals in that same
contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
benefit base and current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 85 -- If your contract was issued when the
annuitant was between ages 80 and 85, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
30 Accessing your money
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charges) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Elite(SM) II offers you several choices of annuity
payout options. Some enable you to receive fixed annuity payments, which can be
either level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option" earlier in this
Prospectus).
- --------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- --------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available in
payout options New York)
Life annuity with period
certain
- --------------------------------------------------------------------------
Income Manager payout options Life annuity with period
(available for annuitants age 83 certain
or less at contract issue) Period certain annuity
- --------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with a
period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recov-
Accessing your money 31
ered, payments to the beneficiary will continue until that amount has been
recovered. This payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain and life annuity with refund
certain payout options are available on a single life or joint and survivor
life basis. The joint and survivor life annuity guarantees payments for the
rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your registered representative can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your registered representative. Income Manager
payout options are described in a separate prospectus that is available from
your registered representative. Before you select an Income Manager payout
option, you should read the prospectus which contains important information
that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your contract.
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Elite(SM) II contract to an Income Manager payout annuity. In
this case, we will consider any amounts applied as a withdrawal from your
Equitable Accumulator(R) Elite(SM) II, and we will deduct any applicable
withdrawal charge. For the tax consequences of withdrawals, see "Tax
information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under our
contract is imposed if you select a period certain. If the period certain is
more than 5 years, then the withdrawal charge deducted will not exceed 5% of
the account value.
For the Income Manager payout options no withdrawal charge is imposed under
your contract. If the withdrawal charge that otherwise would have been applied
to your account value under your contract is greater than 2% of the
contributions that remain in your contract at the time you purchase your payout
option, the withdrawal charges under the Income Manager will apply. The year in
which your account value is applied to the payout option will be "contract year
1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Elite(SM) II contract date.
Except with respect to the Income Manager annuity payout options, where
payments are made on the 15th day of each
32 Accessing your money
month, you can change the date your annuity payments are to begin anytime
before that date as long as you do not choose a date later than the 28th day of
any month.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- -------------------------------------
MAXIMUM
ISSUE AGE ANNUITIZATION AGE
- -------------------------------------
0-75 85
76 86
77 87
78-80 88
81-85 90
- -------------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
Accessing your money 33
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o At the time you make certain withdrawals or surrender your contract -- a
withdrawal charge.
o A charge for baseBUILDER, if you elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to
approximate certain taxes that may be imposed on us, such as premium taxes
in your state. An annuity administrative fee may also apply.
o A charge for Protection Plus, if you elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your registered
representative for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.45% of the net assets in each
variable investment option.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances:
(1) if you make one or more withdrawals during a contract year that, in total,
exceeds the 10% free withdrawal amount, described below, or
(2) if you surrender your contract to receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn in any
of the first three years after we receive a contribution. We determine the
withdrawal charge separately for each contribution according to the following
table:
- --------------------------------------------------------------------
CONTRACT YEAR
- --------------------------------------------------------------------
1 2 3 4
- --------------------------------------------------------------------
Percentage of contribution 8% 8% 8% 0%
- --------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information" later in this Prospectus and in the SAI.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and withdrawal charge from your account
value. The amount deducted to pay withdrawal charges is also subject to that
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover sales expenses.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 10%
free withdrawal amount does not apply if you surrender your contract.
34 Charges and expenses
Note the following special rule for NQ contracts issued to a charitable
remainder trust:
The free withdrawal amount will equal the greater of:
(1) the current account value less contributions that have not been withdrawn
(earnings in the contract), and (2) the 10% free withdrawal amount defined
above.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
(i) The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
(ii) We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
(iii) The annuitant has been confined to a nursing home for more than 90 days
(or such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved
by Medicare as a provider of skilled nursing care service, or (b) licensed
as a skilled nursing home by the state or territory in which it is located
(it must be within the United States, Puerto Rico, or U.S. Virgin Islands)
and meets all of the following:
-- its main function is to provide skilled, intermediate or custodial
nursing care;
-- it provides continuous room and board to three or more persons;
-- it is supervised by a registered nurse or licensed practical nurse;
-- it keeps daily medical records of each patient;
-- it controls and records all medications dispensed; and
-- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions as described in (i), (ii)
and (iii) above existed at the time a contribution was remitted or if the
condition began within 12 months of the period following remittance. Some
states may not permit us to waive the withdrawal charge in the above
circumstances or may limit the circumstances for which the withdrawal charge
may be waived. Your registered representative can provide more information or
you may contact our processing office.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85 (83 in Oregon),
whichever occurs first. The charge is equal to 0.30% of the benefit base in
effect on the contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.20% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment option on a
pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in the order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (the rate is
1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit and the guaranteed minimum death benefit or offer variable investment
options that invest in shares of either Trust that are not subject to the 12b-1
fees. Group arrangements include those in which a trustee or an employer, for
example, purchases contracts covering a group of individuals on a group basis.
Group arrangements are not available for Rollover IRA
Charges and expenses 35
and Roth Conversion IRA contracts. Sponsored arrangements include those in
which an employer allows us to sell contracts to its employees or retirees on
an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
36 Charges and expenses
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) and any amount applicable under the Protection Plus feature, as
of the date we receive satisfactory proof of the annuitant's death, any
required instructions for the method of payment, information and forms
necessary to effect payment. The amount of the guaranteed minimum death benefit
will be the guaranteed minimum death benefit as of the date of the annuitant's
death, adjusted for any subsequent withdrawals (and any associated withdrawal
charges). Under Rollover TSA contracts we will deduct the amount of any
outstanding loan plus accrued interest from the amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" later in this
Prospectus.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive this death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will
pay any cash value five years after your death (or the death of the first
owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor
Payment of death benefit 37
owner/annuitant feature, we will increase the account value to equal your
guaranteed minimum death benefit as of the date of your death if such death
benefit is greater than such account value, plus any amount applicable under
the Protection Plus feature and adjusted for any subsequent withdrawals. The
increase in the account value will be allocated to the investment options
according to the allocation percentages we have on file for your contract.
Thereafter, withdrawal charges will no longer apply to contributions made
before your death. Withdrawal charges will apply if additional contributions
are made. These additional contributions will be considered to be withdrawn
only after all other amounts have been withdrawn. In determining whether the
guaranteed minimum death benefit will continue to grow, we will use your
surviving spouse's age (as of the date we receive satisfactory proof of your
death, any required instructions and the information and forms necessary to
effect the successor owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the death benefit as of
the date of your death, if such death benefit is greater than such account
value, plus any amount applicable under the Protection Plus feature and
adjusted for any subsequent withdrawals. The beneficiary continuation option is
available if we have received regulatory clearance in your state. Where an IRA
contract is owned in a custodial individual retirement account, the custodian
may reinvest the death benefit in an Accumulator(R) Elite(SM) II individual
retirement annuity contract, using the account beneficiary as the annuitant.
Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in
effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected
by the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
38 Payment of death benefit
7. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Elite(SM) II contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers or federal gift and estate taxes. Transfers of the contract,
rights under the contract, or payments under the contract may be subject to
gift or estate taxes. You should not rely only on this document, but should
consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans.
In addition to increasing amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator(R) Elite(SM) II's Dollar Cost Averaging, choice of
death benefits, selection of investment funds and fixed maturity options and
its choices of pay-out options, as well as the features and benefits of other
permissible funding vehicles and the relative costs of annuities and other
arrangements. You should be aware that cost may vary depending on the features
and benefits made available and the charges and expenses of the investment
options or funds that you elect. See also Appendix II at the end of this
Prospectus for a discussion of QP contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
Tax information 39
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
Annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which should have no adverse tax effect, it is possible that the IRS could take
a contrary position or assert that the Protection Plus rider is not part of the
contract. IN SUCH A CASE, THE CHARGES FOR THE PROTECTION PLUS RIDER COULD BE
TREATED FOR FEDERAL INCOME TAX PURPOSES AS A PARTIAL WITHDRAWAL FROM THE
CONTRACT. If this were so, such a deemed withdrawal could be taxable and, for
contract owners under age 59-1/2, also subject to a tax penalty. Were the IRS to
take this position, Equitable would take all reasonable steps to attempt to
avoid this result, which would include amending the contract (with appropriate
notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Elite(SM) II NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Elite(SM) II NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between carriers and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER
YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
currently included in your gross income for federal income tax purposes.
Incidents of investment control could include among other items, the number of
investment options available under a contract and/or the frequency of transfers
available under the contract. In connection with the issuance of regulations
concerning investment diversification in 1986, the Treasury Department
announced that the diversification regulations did not provide guidance on
investor control but that guidance would be issued in the form of regulations
or rulings. As of the date of this prospectus, no such guidance has been
issued. It is not known whether such guidelines, if in fact issued, would have
retroactive adverse effect on existing contracts. We can not provide assurance
as to the terms or scope of any future guidance nor any
40 Tax information
assurance that such guidance would not be imposed on a retroactive basis to
contracts issued under this prospectus. We reserve the right to modify the
contract as necessary to attempt to prevent you from being considered the owner
of the assets of the separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets funding the account
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account. In an
individual retirement annuity, an insurance company issues an annuity contract
that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http:// www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). This prospectus contains the information that the IRS
requires you to have before you purchase an IRA. This section of the prospectus
covers some of the special tax rules that apply to IRAs. The next section
covers Roth IRAs. Education IRAs are not discussed in this prospectus because
they are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Elite(SM) II traditional and Roth IRA contracts
have been approved by the IRS as to form for use as a traditional IRA and Roth
IRA, respectively. This IRS approval is a determination only as to the form of
the annuity. It does not represent a determination of the merits of the annuity
as an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Elite(SM) II traditional and Roth
IRA contracts. Because the IRS has announced that issuers of formally approved
IRAs must amend their contracts to reflect recent tax law changes and resubmit
the amended contracts to retain such formal approval, Equitable intends to
comply with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) ELITE(SM) II
CONTRACT AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE
PARAGRAPH ABOVE, DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We
have filed a request with the IRS that the contract with the Protection Plus
feature qualifies as to form for use as a traditional IRA and Roth IRA,
respectively. THERE IS NO ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS
FEATURE MEETS THE IRS QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may
not invest in life insurance contracts. Although we view the optional
Protection Plus benefit as an investment protection feature which should have
no adverse tax effect and not as life insurance, it is possible that the IRS
could take a contrary position regarding tax qualification or assert that the
Protection Plus rider is not a permissible part of an individual retirement
annuity contract. We further view the optional Protection Plus benefit as part
of the contract. There is also a risk that the IRS may take the position that
the optional Protection Plus benefit is not part of the annuity contract. In
such a case, the charges for the Protection Plus rider could be treated for
federal income tax purposes as a partial withdrawal from the contract. If this
were so, such a deemed withdrawal could be taxable, and for contract owners
under age 59-1/2, also subject to a tax penalty. Were the IRS to take any
adverse position, Equitable would take all reasonable steps to attempt to avoid
any adverse result, which would include amending the contract (with appropriate
notice to you). YOU SHOULD DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD
CONSIDER PURCHASING AN ACCUMULATOR(R) ELITE(SM) II IRA OR ACCUMULATOR(R)
ELITE(SM) II ROTH IRA WITH THE OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
Tax information 41
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA, surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally there are two types of funding vehicles available for 403(b)
arrangements-- an annuity contract under Section 403(b)(1) of the Code or a
custodial account which invests only in mutual funds and which is treated as an
annuity contract under Section 403(b)(7) of which the Code. Both types of
403(b) arrangements qualify for tax deferral.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Elite(SM) II Rollover TSA contract:
42 Tax information
o a rollover from another eligible retirement plan; or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another, because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds;
and
o the Equitable Accumulator(R) Elite(SM) II contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Elite(SM) II Rollover
TSA contract, you may have to obtain your employer's authorization or
demonstrate that you do not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Elite(SM) II Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to the withdrawal restrictions may depend on the
source of the funds used to establish the Accumulator(R) Elite(SM) II TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over an "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation of service, if later. These rules are discussed in greater detail
in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding
Tax information 43
in some cases. Generally, we do not have to withhold if your distributions are
not taxable. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of your distribution. Any income tax withheld
is a credit against your income tax liability. If you do not have sufficient
income tax withheld or do not make sufficient estimated income tax payments,
you may incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA to the extent it is reasonable for us to believe that a
distribution is includable in your gross income. This may result in tax
being withheld even though the Roth IRA distribution is ultimately not
taxable. You can elect out of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2
or retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
44 Tax information
8. More information
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ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. The results of Separate Account No. 49's operations are
accounted for without regard to Equitable Life's other operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in Class IB/B shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No. 49
or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999 EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to its
Class IB/B shares and other aspects of its operations, appears in the
prospectuses for each Trust, which are attached at the end of this Prospectus,
or in the respective SAIs which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table are illustrative only
and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your registered representative.
The rates to maturity for new allocations as of February 15, 2002 and the
related price per $100 of maturity value were as shown below:
- --------------------------------------------------------------------------
FIXED MATURITY OPTIONS
WITH FEBRUARY 15TH RATE TO MATURITY
MATURITY DATE OF AS OF PRICE PER $100
MATURITY YEAR FEBRUARY 15, 2002 OF MATURITY VALUE
- --------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
2009 5.08% $ 70.67
2010 5.29% $ 66.19
2011 5.47% $ 61.90
2012 5.59% $ 58.03
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More information 45
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix III at the end of this Prospectus for
an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be
46 More information
accompanied by information we require to allocate your contribution. Wire
orders not accompanied by complete information may be retained as described
under "How you can make your contributions" in "Contract features and benefits"
earlier in this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgement of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgement of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT
EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in the prospectuses for the Trusts or requiring
a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of
More information 47
the Trusts are held by separate accounts of insurance companies both affiliated
and unaffiliated with us. Shares held by these separate accounts will probably
be voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001, in this prospectus
by reference to the 2001 Annual Report on Form 10-K are incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI is
available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. If your individual
retirement annuity contract is held in your custodial individual retirement
account, you may only assign or transfer ownership of such an IRA contract to
yourself. Loans are not available and you cannot assign Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contracts as security for a loan or other
obligation. If the employer that provided the funds does not restrict them,
loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules. In the case of such a transfer, which involves
a surrender of your contract, we will impose a withdrawal charge, if one
applies.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC and AXA Distributors,
LLC. For this purpose, AXA Advisors, LLC serves as the principal underwriter of
Separate Account No. 45, and AXA Distributors, LLC serves as the principal
underwriter of Separate Account No. 49. The offering of the contracts is
intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for sales and
marketing functions for the contracts funded through Separate Account No. 45.
AXA Advisors also acts as distributor for other Equitable Life annuity products
with different features, expenses and fees. AXA Advisors is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
These contracts will be sold by registered representatives who are registered
representatives of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
DISTRIBUTION OF THE CONTRACTS BY AXA DISTRIBUTORS, LLC
AXA Distributors, LLC ("AXA Distributors"), an indirect, wholly owned
subsidiary of Equitable Life, has responsibility for sales and marketing
functions for the contracts funded through Separate Account No. 49. AXA
Distributors also acts as distributor for other Equitable Life annuity products
with different features, expenses, and fees. AXA Distributors is registered
with the SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Distributors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
48 More information
AXA Distributors is the successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. Like AXA Distributors, Equitable
Distributors, Inc. was owned by Equitable Holdings, LLC.
These contracts are sold by registered representatives of AXA Distributors, as
well as by affiliated and unaffiliated broker-dealers who have entered into
selling agreements with AXA Distributors. We pay broker-dealer sales
compensation that will generally not exceed an amount equal to 7% of total
contributions made under the contracts. AXA Distributors may also receive
compensation and reimbursement for its marketing services under the terms of
its distribution agreement with Equitable Life. Broker-dealers receiving sales
compensation will generally pay a portion of it to their registered
representative as commissions related to sales of the contracts. The offering
of the contracts is intended to be continuous.
More information 49
9. Investment performance
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The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the withdrawal charge, the optional baseBUILDER benefits charge and the charge
for Protection Plus, but does not reflect the charges designed to approximate
certain taxes imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts will be offered
for the first time in 2002.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985 reflect the results of the variable investment options that preceded them.
The "Since portfolio inception" figures for these options are based on the date
of inception of the preceding variable investment options. We have adjusted
these results to reflect the maximum investment advisory fee payable for the
portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
50 Investment performance
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
LENGTH OF OPTION PERIOD
-------------------------------------------
SINCE OPTION
VARIABLE INVESTMENT OPTIONS 1 YEAR 5 YEARS INCEPTION*
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EQ/Aggressive Stock (34.53)% (5.33)% (5.15)%
EQ/Alliance Common Stock (20.36)% 7.39% 8.00%
EQ/Alliance Global (29.71)% 1.62% 2.01%
EQ/Alliance Growth Investors (22.21)% 4.97% 5.15%
EQ/Alliance Money Market (6.31)% 2.59% 2.51%
EQ/Alliance Premier Growth (33.34)% -- (16.58)%
EQ/Alliance Small Cap Growth (22.81)% -- 7.02%
EQ/Alliance Technology (33.81)% -- (41.75)%
EQ/Bernstein Diversified Value (6.77)% -- 3.59%
EQ/Capital Guardian International (30.32)% -- (9.28)%
EQ/Capital Guardian Research (11.79)% -- (1.19)%
EQ/Capital Guardian U.S. Equity (11.78)% -- (3.35)%
EQ/Emerging Markets Equity (14.87)% -- (7.17)%
EQ/Equity 500 Index (21.75)% 7.62% 8.23%
EQ/Evergreen Omega (26.51)% -- (12.35)%
EQ/FI Mid Cap (22.98)% -- (17.62)%
EQ/FI Small/Mid Cap Value (5.88)% -- 1.24%
EQ/High Yield (9.13)% (2.44)% (2.01)%
EQ/International Equity Index (34.81)% -- (3.64)%
EQ/J.P. Morgan Core Bond (2.01)% -- 4.28%
EQ/Janus Large Cap Growth (32.36)% -- (35.64)%
EQ/Lazard Small Cap Value 7.61% -- 4.82%
EQ/Mercury Basic Value Equity (4.38)% -- 11.37%
EQ/MFS Emerging Growth Companies (43.25)% -- 7.22%
EQ/MFS Investors Trust (25.50)% -- (8.33)%
EQ/MFS Research (31.23)% -- 3.71%
EQ/Putnam Growth & Income Value (16.50)% -- 3.23%
EQ/Putnam International Equity (30.94)% -- 5.84%
EQ/Putnam Voyager (33.83)% -- 4.76%
EQ/Small Company Index (7.79)% -- 1.58%
- --------------------------------------------------------------------------------
LENGTH OF PORTFOLIO PERIOD
----------------------------------------------------
SINCE
PORTFOLIO
VARIABLE INVESTMENT OPTIONS 3 YEARS 5 YEARS 10 YEARS INCEPTION**
- ----------------------------------------------------------------------------------------
EQ/Aggressive Stock (13.80)% (5.33)% 1.60% 9.72%
EQ/Alliance Common Stock ( 6.54)% 7.39% 10.11% 11.48%
EQ/Alliance Global ( 8.80)% 1.62% 6.07% 6.29%
EQ/Alliance Growth Investors ( 4.06)% 4.97% 6.47% 9.49%
EQ/Alliance Money Market ( 0.08)% 2.59% 2.09% 4.09%
EQ/Alliance Premier Growth -- -- -- (16.57)%
EQ/Alliance Small Cap Growth 3.26% -- -- 7.02%
EQ/Alliance Technology -- -- -- (41.75)%
EQ/Bernstein Diversified Value ( 3.43)% -- -- 3.59%
EQ/Capital Guardian International -- -- -- ( 9.28)%
EQ/Capital Guardian Research -- -- -- ( 1.20)%
EQ/Capital Guardian U.S. Equity -- -- -- ( 3.36)%
EQ/Emerging Markets Equity ( 1.18)% -- -- (11.63)%
EQ/Equity 500 Index ( 6.70)% 7.62% -- 11.04%
EQ/Evergreen Omega (12.35)% -- -- (12.35)%
EQ/FI Mid Cap -- -- -- (18.27)%
EQ/FI Small/Mid Cap Value ( 1.24)% -- -- 1.54%
EQ/High Yield ( 9.22)% (2.44)% 4.47% 4.82%
EQ/International Equity Index (13.20)% -- -- ( 3.64)%
EQ/J.P. Morgan Core Bond 0.98% -- -- 4.28%
EQ/Janus Large Cap Growth -- -- -- (36.14)%
EQ/Lazard Small Cap Value 7.75% -- -- 4.81%
EQ/Mercury Basic Value Equity 7.34% -- -- 11.37%
EQ/MFS Emerging Growth Companies ( 7.44)% -- -- 7.22%
EQ/MFS Investors Trust ( 8.33)% -- -- ( 8.33)%
EQ/MFS Research ( 8.13)% -- -- 3.71%
EQ/Putnam Growth & Income Value ( 5.65)% -- -- 3.23%
EQ/Putnam International Equity ( 1.51)% -- -- 5.84%
EQ/Putnam Voyager (12.11)% -- -- 4.76%
EQ/Small Company Index 1.20% -- -- 1.58%
- ----------------------------------------------------------------------------------------
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October
16, 1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity,
EQ/MFS Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity and EQ/Putnam Voyager
(May 1, 1997); EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap
Value and EQ/Janus Large Cap Growth (September 5, 2000); EQ/Balanced (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Growth and Income. EQ/Alliance
International, EQ/Alliance Quality Bond, EQ/AXP New Dimensions and EQ/AXP
Strategy Aggressive (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May
1, 1997); EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Calvert Socially Responsible (September 1, 1999); EQ/Alliance Technology
(May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid
Cap and EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus
(August 31, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care,
AXA Premier VIP International Equity, AXA Premier VIP Large Cap Core
Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value,
AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value
and AXA Premier VIP Technology (December 31, 2001). No performance
information is provided for portfolios and/or variable investment options
with inception dates after December 31, 2000.
Investment performance 51
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- ----------------------------------------------------------
Barron's
Morningstar's Variable Annuity
Sourcebook
Business Week
Forbes
Fortune
Institutional Investor
Money
Kiplinger's Personal Finance
Financial Planning
Investment Adviser
- ----------------------------------------------------------
Investment Management Weekly
Money Management Letter
Investment Dealers Digest
National Underwriter
Pension & Investments
USA Today
Investor's Business Daily
The New York Times
The Wall Street Journal
The Los Angeles Times
The Chicago Tribune
- ----------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) performance relative to other variable annuity
products. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
withdrawal charge, the optional baseBUILDER benefit charge, the optional
Protection Plus charge, and any charge designed to approximate certain taxes
that may be imposed on us, such as premium taxes in your state. For more
information, see "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option" in the SAI.
52 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2001 is considered to be a part of this prospectus because they are
incorporated by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 53
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Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 49 with the same daily asset charges of 1.80%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001
- -----------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDING DECEMBER 31,
2001
- -----------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock
Unit value $ 47.59
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock
Unit value $ 193.35
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market
Unit value $ 26.05
Number of units outstanding (000's) 82
- ----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth
Unit value $ 7.03
Number of units outstanding (000's) 81
- ----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth
Unit value $ 13.98
Number of units outstanding (000's) 6
- ----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology
Unit value $ 4.89
Number of units outstanding (000's) 27
- ----------------------------------------------------------------------------------------------------------------------
EQ/Balanced
Unit value $ 37.90
Number of units outstanding (000's) 7
- ----------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value
Unit value $ 11.68
Number of units outstanding (000's) 46
- ----------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible
Unit value $ 8.58
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International
Unit value $ 8.59
Number of units outstanding (000's) 10
- ----------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research
Unit value $ 10.59
Number of units outstanding (000's) 18
- ----------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U. S. Equity
Unit value $ 10.03
Number of units outstanding (000's) 21
- ----------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity
Unit value $ 5.99
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index
Unit value $ 23.56
Number of units outstanding (000's) 57
- ----------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE INVESTMENT OPTION, EXCEPT FOR THOSE
OPTIONS BEING OFFERED FOR THE FIRST TIME AFTER DECEMBER 31, 2001 (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDING DECEMBER 31,
2001
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega
Unit value $ 7.61
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap
Unit value $ 8.49
Number of units outstanding (000's) 35
- ----------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value
Unit value $ 10.96
Number of units outstanding (000's) 31
- ----------------------------------------------------------------------------------------------------------------------
EQ/High Yield
Unit value $ 22.17
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index
Unit value $ 8.74
Number of units outstanding (000's) 5
- ----------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond
Unit value $ 12.00
Number of units outstanding (000's) 78
- ----------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth
Unit value $ 6.34
Number of units outstanding (000's) 24
- ----------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value
Unit value $ 12.27
Number of units outstanding (000's) 27
- ----------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus
Unit value $ 11.32
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity
Unit value $ 16.84
Number of units outstanding (000's) 20
- ----------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies
Unit value $ 14.07
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust
Unit value $ 8.59
Number of units outstanding (000's) 33
- ----------------------------------------------------------------------------------------------------------------------
EQ/MFS Research
Unit value $ 12.07
Number of units outstanding (000's) 13
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
Unit value $ 11.82
Number of units outstanding (000's) 32
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity
Unit value $ 13.26
Number of units outstanding (000's) 9
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth
Unit value $ 12.63
Number of units outstanding (000's) 11
- ----------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index
Unit value $ 10.81
Number of units outstanding (000's) 10
- ----------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Elite(SM) II QP contract should discuss with their tax advisers whether this is
an appropriate investment vehicle for the employer's plan. Trustees should
consider whether the plan provisions permit the investment of plan assets in the
QP contract, the distribution of such an annuity, the purchase of the guaranteed
minimum income benefit and the payment of death benefits in accordance with the
requirements of the federal income tax rules. The QP contract and this
prospectus should be reviewed in full, and the following factors, among others,
should be noted. Assuming continued plan qualification and operation, earnings
on qualified plan assets will accumulate value on a tax-deferred basis even if
the plan is not funded by the Equitable Accumulator(R) Elite(SM) II QP contract
or another annuity. Therefore, you should purchase an Equitable Accumulator(R)
Elite(SM) II QP contract to fund a plan for the contract's features and benefits
other than tax deferral, after considering the relative costs and benefits of
annuity contracts and other types of arrangements and funding vehicles. This QP
contract accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge and/or market value adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants
approaching or over age 70-1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60-1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,846 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- ---------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2007
----------------------
5.00% 9.00%
- ---------------------------------------------------------------------------------
As of February 15, 2007 (before withdrawal)
- ---------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
(2) Fixed maturity amount $131,080 $ 131,080
(3) Market value adjustment:
(1)-(2) $ 12,968 $ (11,593)
- ---------------------------------------------------------------------------------
On February 15, 2007 (after withdrawal)
- ---------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
(5) Reduction in fixed maturity amount: [$50,000-(4)] $ 45,499 $ 54,851
(6) Fixed maturity amount: (2)-(5) $ 85,581 $ 76,229
(7) Maturity value $120,032 $ 106,915
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ---------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Appendix IV: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
* If your contract is issued in the state of Washington, the applicable
crediting rate would be 3%, and, therefore, the values shown would be lower.
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market or EQ/Alliance Quality Bond
options or the fixed maturity options), no additional contributions, no
transfers, no withdrawals and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- ---------------------------------------------------------------------------------------
1 $105,000 $ 105,000(1) $ 105,000(3)
2 $115,500 $ 110,250(2) $ 115,500(3)
3 $129,360 $ 115,763(2) $ 129,360(3)
4 $103,488 $ 121,551(1) $ 129,360(4)
5 $113,837 $ 127,628(1) $ 129,360(4)
6 $127,497 $ 134,010(1) $ 129,360(4)
7 $127,497 $ 140,710(1) $ 129,360(4)
- ---------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80*
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the guaranteed minimum death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current guaranteed minimum death
benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is the guaranteed minimum death benefit at the end of the prior year
since it is equal to or higher than the current account value. 1
Appendix IV: Guaranteed minimum death benefit example D-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High
Yield Option 23
Distribution of the contracts 24
Financial Statements 24
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR(R) ELITE(SM) II STATEMENT OF ADDITIONAL
INFORMATION FOR
SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator(R) Elite(SM) II
P.O. Box 1547 Secaucus, NJ 07096-1547
Please send me an Equitable Accumulator(R) Elite(SM) II SAI dated May, 1, 2002.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
Equitable Accumulator(R) Select(SM)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) SELECT(SM)?
Equitable Accumulator(R) Select(SM) is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
There is no withdrawal charge under the contract. However, we deduct a
distribution charge calculated as a percentage of the amounts in the variable
investment options. We deduct this charge for the life of the contract. This
contract may not currently be available in all states.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities* o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager (2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
- --------------------------------------------------------------------------------
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate to any of the variable investment options. Each variable
investment option is a subaccount of Separate Account No. 45 and Separate
Account No. 49. Each variable investment option, in turn, invests in a
corresponding securities portfolio of EQ Advisors Trust or AXA Premier VIP
Trust (the "Trusts"). Your investment results in a variable investment option
will depend on the investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined contribution
or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
The SEC has not approved or disapproved these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense. The contracts are not insured by the FDIC or any other
agency. They are not deposits or other obligations of any bank and are not bank
guaranteed. They are subject to investment risks and possible loss of
principal.
X00290/ML
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) SELECT(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Select(SM) at a glance -- key features 8
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FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 21
Your benefit base 23
Annuity purchase factors 23
Our baseBUILDER option 23
Guaranteed minimum death benefit 24
Your right to cancel within a certain number of days 25
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 26
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Your account value and cash value 26
Your contract's value in the variable investment options 26
Your contract's value in the fixed maturity options 26
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 27
- --------------------------------------------------------------------------------
Transferring your account value 27
Disruptive transfer activity 27
Rebalancing your account value 27
- ----------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 28
- --------------------------------------------------------------------------------
Withdrawing your account value 28
How withdrawals are taken from your account value 29
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 29
Loans under Rollover TSA contracts 29
Surrendering your contract to receive its cash value 30
When to expect payments 30
Your annuity payout options 30
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5. CHARGES AND EXPENSES 33
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Charges that Equitable Life deducts 33
Charges that the Trusts deduct 34
Group or sponsored arrangements 34
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6. PAYMENT OF DEATH BENEFIT 35
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Your beneficiary and payment of benefit 35
How death benefit payment is made 35
Beneficiary continuation option 36
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7. TAX INFORMATION 37
- --------------------------------------------------------------------------------
Overview 37
Buying a contract to fund a retirement arrangement 37
Transfers among investment options 37
Taxation of nonqualified annuities 37
Individual retirement arrangements (IRAs) 39
Special rules for contracts funding qualified plans 40
Tax-Sheltered Annuity contracts (TSAs) 40
Federal and state income tax withholding
and information reporting 41
Impact of taxes to Equitable Life 42
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8. MORE INFORMATION 43
- --------------------------------------------------------------------------------
About Separate Account No. 45 and Separate Account No. 49 43
About the Trusts 43
About our fixed maturity options 43
About the general account 44
About other methods of payment 45
Dates and prices at which contract events occur 45
About your voting rights 45
About legal proceedings 46
About our independent accountants 46
Financial statements 46
Transfers of ownership, collateral assignments, loans
and borrowing 46
Distribution of the contracts 46
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9. INVESTMENT PERFORMANCE 48
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Communicating performance data 52
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10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 53
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE IN
TERM PROSPECTUS
account value 26
annuitant 15
annuity payout options 30
annuity purchase factors 23
baseBUILDER 23
beneficiary 35
benefit base 23
business day 45
cash value 26
contract date 9
contract date anniversary 9
contract year 9
contributions 39
regular contributions 39
rollovers and direct transfers 39
conversion contributions 40
disruptive transfer activity 27
EQAccess 6
ERISA 29
fixed maturity options 21
guaranteed minimum death benefit 24
guaranteed minimum income benefit 23
IRA cover
IRS 37
PAGE IN
TERM PROSPECTUS
investment options 17
loan reserve account 29
market adjusted amount 21
market timing 27
market value adjustment 21
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 39
SAI cover
SEC cover
TOPS 6
Trusts cover
TSA 40
traditional IRA 39
unit 26
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your financial professional can provide further explanation about
your contract or supplemental materials.
- -----------------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- -----------------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
- -----------------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
REGULAR MAIL
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
EXPRESS DELIVERY
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options (not available through
EQAccess);
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith, or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your financial professional
(available to clients of AXA Distributors only);
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) 12 month dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Select(SM) at a glance -- key features
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PROFESSIONAL INVESTMENT Equitable Accumulator(R) Select(SM)'s variable investment options invest in different portfolios
MANAGEMENT managed by professional investment advisers.
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FIXED MATURITY OPTIONS o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
--------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any value
that you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
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TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
--------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), you should be
aware that such annuities do not provide tax deferral benefits beyond those already provided by the
Internal Revenue Code. Before purchasing one of these annuities, you should consider whether its
features and benefits beyond tax deferral meet your needs and goals. You may also want to consider the
relative features, benefits and costs of these annuities, compared with any other investment that you
may use in connection with your retirement plan or arrangement. (For more information, see "Tax
information," later in this Prospectus and in the SAI).
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BASEBUILDER(R) PROTECTION baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum death benefit
provided under the contract. The guaranteed minimum income benefit provides income protection for you
while the annuitant lives. The guaranteed minimum death benefit provides a death benefit for the
beneficiary should the annuitant die.
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CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
Maximum contribution limitations may apply.
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ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur income tax and a tax penalty.
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PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
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ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
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8 Equitable Accumulator(R) Select(SM) at a glance -- key features
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FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality and expense risks,
administrative charges and distribution charges at a current annual rate of 1.60%.
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout option or the contract date anniversary after the
annuitant reaches age 85 (age 83 in Oregon), whichever occurs first. The benefit base is described under
"Your benefit base" in "Contract features and benefits" later in this Prospectus. If you don't elect
baseBUILDER, you still receive a guaranteed minimum death benefit under your contract at no additional
charge.
o Annual 0.20% Protection Plus charge for this optional death benefit
o No sales charge deducted at the time you make contributions, no withdrawal charge and no annual contract
fee.
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The "contract date" is the effective date of a contract. This usually is the business day we receive the
properly completed and signed application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The end of each 12-month period
is your "contract date anniversary."
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o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. This charge is generally deducted from the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of the Trust's portfolios are calculated as a percentage of the average daily net assets
invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses.
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ANNUITANT ISSUE AGES NQ: 0-85
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-85
QP: 20-75
- ------------------------------------------------------------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Select(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this Prospectus.
The fixed maturity options and the 12 month dollar cost averaging account are
not covered by the fee table and examples. A market value adjustment (up or
down) may apply as a result of a withdrawal, transfer or surrender of amounts
from a fixed maturity option.
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%
Administrative 0.25%
Distribution 0.25%
----
Total annual expenses 1.60%
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Charge if you elect a Variable Immediate Annuity payout option $350
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- ------------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER benefit charge (calculated as a percentage of the benefit base.
Deducted annually on each contract date anniversary)(2) 0.30%
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PROTECTION PLUS BENEFIT CHARGE (calculated as a percentage of the account value.
Deducted annually on each contract date anniversary) 0.20%
- ------------------------------------------------------------------------------------------------------------------------------------
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- ------------------------------------------------------------------------------------------------------------------------------------
NET
TOTAL ANNUAL
MANAGEMENT FEES OTHER EXPENSES EXPENSES (AFTER
(AFTER EXPENSE (AFTER EXPENSE EXPENSE
PORTFOLIO NAME LIMITATION)(3) 12B-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
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EQ ADVISORS TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- ------------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) The benefit base is described under "Your guaranteed minimum income benefit
under baseBUILDER" in "Contract features" and benefits later in this
Prospectus.
(3) The management fees shown for each portfolio cannot be increased without a
vote of each portfolio's shareholders. See footnote (6) for any expense
limitation agreement information.
Fee table 11
(4) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Initial seed capital was invested for the Portfolios
of the AXA Premier VIP Trust on December 31, 2001, thus, "Other Expenses"
shown are estimated. See footnote (6) for any expense limitation
agreements information.
(6) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- --------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- --------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- --------------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected baseBUILDER with a 5% roll up to age 80 or annual ratchet to age 80
guaranteed minimum death benefit and Protection Plus) would pay in the
situation illustrated. We assume that a $1,000 contribution is invested in one
of the variable investment options listed and a 5% annual return is earned on
the assets in that option.(1) Since the Protection Plus feature is only
available under certain contracts expenses would be lower for contracts that do
not have this feature.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the examples.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
- ---------------------------------------------------------------------------------------------------
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
----------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 29.93 $ 97.76 $ 168.32 $ 357.40
AXA Premier VIP Health Care $ 39.38 $ 125.46 $ 213.37 $ 441.28
AXA Premier VIP International Equity $ 38.85 $ 123.94 $ 210.91 $ 436.82
AXA Premier VIP Large Cap Core Equity $ 34.13 $ 110.14 $ 188.56 $ 395.65
AXA Premier VIP Large Cap Growth $ 34.13 $ 110.14 $ 188.56 $ 395.65
AXA Premier VIP Large Cap Value $ 34.13 $ 110.14 $ 188.56 $ 395.65
AXA Premier VIP Small/Mid Cap Growth $ 36.75 $ 117.82 $ 201.03 $ 418.76
AXA Premier VIP Small/Mid Cap Value $ 36.75 $ 117.82 $ 201.03 $ 418.76
AXA Premier VIP Technology $ 39.38 $ 125.46 $ 213.37 $ 441.28
EQ/Aggressive Stock $ 29.82 $ 97.45 $ 167.81 $ 356.42
EQ/Alliance Common Stock $ 28.14 $ 92.47 $ 159.62 $ 340.65
EQ/Alliance Global $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/Alliance Growth and Income $ 29.19 $ 95.58 $ 164.75 $ 350.54
EQ/Alliance Growth Investors $ 29.19 $ 95.58 $ 164.75 $ 350.54
EQ/Alliance Intermediate Government Securities $ 29.09 $ 95.27 $ 164.23 $ 349.55
EQ/Alliance International $ 34.13 $ 110.14 $ 188.56 $ 395.65
EQ/Alliance Money Market $ 26.78 $ 88.41 $ 152.91 $ 327.65
EQ/Alliance Premier Growth $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Alliance Quality Bond $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Alliance Small Cap Growth $ 31.08 $ 101.17 $ 173.92 $ 368.07
EQ/Alliance Technology $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/AXP New Dimensions $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/AXP Strategy Aggressive $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/Balanced $ 29.40 $ 96.20 $ 165.77 $ 352.50
EQ/Bernstein Diversified Value $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Calvert Socially Responsible $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Capital Guardian International $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/Capital Guardian Research $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Capital Guardian U.S. Equity $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Emerging Markets Equity $ 38.85 $ 123.94 $ 210.91 $ 436.82
EQ/Equity 500 Index $ 25.83 $ 85.59 $ 148.25 $ 318.55
EQ/Evergreen Omega $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/FI Mid Cap $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/FI Small/Mid Cap Value $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/High Yield $ 29.61 $ 96.83 $ 166.79 $ 354.46
EQ/International Equity Index $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/J.P. Morgan Core Bond $ 28.35 $ 93.09 $ 160.64 $ 342.64
EQ/Janus Large Cap Growth $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Lazard Small Cap Value $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/Marsico Focus $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Mercury Basic Value Equity $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/MFS Emerging Growth Companies $ 30.14 $ 98.38 $ 169.34 $ 359.35
EQ/MFS Investors Trust $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/MFS Research $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Putnam Growth & Income Value $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Putnam International Equity $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/Putnam Voyager $ 29.93 $ 97.76 $ 168.32 $ 357.40
- ---------------------------------------------------------------------------------------------------
Fee table 13
- ---------------------------------------------------------------------------------------------------
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
---------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------
EQ/Small Company Index $ 28.88 $ 94.65 $ 163.21 $ 347.58
- ---------------------------------------------------------------------------------------------------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money" later
in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $5.44 based on the average amount
applied to annuity payout options in 2001. See "Annuity administrative fee" in
"Charges and expenses" later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
14 Fee table
1. Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. All ages in the table refer
to the age of the annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE FOR ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 85 o After-tax money. o No additional contributions after age 86.
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue Code.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 85 o Eligible rollover distributions from TSA o No rollover or direct transfer
contracts or other 403(b) arrangements, contributions after age 86.
qualified plans, and governmental EDC
plans. o Contributions after age 70-1/2 must be net
of required minimum distributions.
o Rollovers from another traditional
individual retirement arrangement. o Although we accept regular IRA contribu-
tions (limited to $3,000 for the calendar
o Direct custodian-to-custodian transfers year 2002) under Rollover IRA contracts,
from another traditional individual we intend that this contract be used pri-
retirement arrangement. marily for rollover and direct transfer
contributions.
o Regular IRA contributions.
o Additional catch-up contributions
o For the calendar year 2002 and later, totalling up to $500 can be made for the
additional "catch-up" contributions. calendar year 2002 where the owner is at
least age 50 but under age 70-1/2 at any
time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA contributions after age 86.
o Conversion rollovers from a traditional
IRA. o Conversion rollovers after age 70-1/2 must
be net of required minimum distributions
o Direct transfers from another Roth IRA. for the traditional IRA you are rolling
over.
o Regular Roth IRA contributions.
o You cannot roll over funds from a tradi-
o For the calendar year 2002 and later, tional IRA if your adjusted gross income
additional catch-up contributions. is $100,000 or more.
o Although we accept regular Roth IRA
contributions (limited to $3,000 for the
calendar year 2002) under Roth IRA con-
tracts, we intend that this contract be
used primarily for rollover and direct
transfer contributions.
o Additional catch-up contributions totall
up to $500 can be made for the calendar
year 2002 where the owner is at least age
50 at any time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE FOR ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o Direct transfers of pre-tax funds from o No additional rollover or direct transfer
another contract or arrangement under contributions after age 86.
Section 403(b) of the Internal Revenue
Code, complying with IRS Revenue Ruling o Rollover or direct transfer contributions
90-24. after age 70-1/2 must be net of any
required minimum distributions.
o Eligible rollover distributions of pre-tax
funds from other 403(b) plans, qualified o Employer-remitted contributions are not
plans, governmental EDC plans and tradi- permitted.
tional IRAs.
- ------------------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o Only transfer contributions from an existing o Regular ongoing payroll contributions are
qualified plan trust as a change of invest- not permitted.
ment vehicle under the plan.
o Only one additional transfer contribution
o The plan must be qualified under Section may be made during a contract year.
401(a) of the Internal Revenue Code.
o No additional transfer contributions after
o For 401(k) plans, transferred contributions age 76.
may only include employee pre-tax
contributions. o For defined benefit plans, employee con-
tributions are not permitted, and we will
not accept contributions that fund more
than 80% of the actuarial value of the
plan participant/employee's normal retire-
ment benefit.
o Contributions after age 70-1/2 must be net
of any required minimum distributions.
Please refer to Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Select(SM) contracts with the
same annuitant would then total more than $1,500,000. We reserve the right to
limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant. This
option may not be available under your contract.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options and the fixed
maturity options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
PORTFOLIOS OF THE TRUSTS
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Select(SM). These portfolios may even have the same manager(s) and/or a similar
name. However, there are numerous factors that can contribute to differences in
performance between two investments, particularly over short periods of time.
Such factors include the timing of stock purchases and sales; differences in
fund cash flows; and specific strategies employed by the portfolio manager.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital Pacific Investment Management Company LLC
appreciation consistent with a
prudent level of risk
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital management L.P.
Institutional Capital Corporation
MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management LLC
TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and increased income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent Alliance Capital Management L.P
with the Adviser's determination of reasonable risk
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Seeks to achieve high current income consistent with Alliance Capital Management L.P
Government Securities* relative stability of principal
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P.
(including through its Bernstein
Investment Research and Management Unit)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market Seeks to obtain a high level of current income, Alliance Capital Management L.P.
preserve its assets and maintain liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income consistent with Alliance Capital Management L.P.
moderate risk of capital
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Current income is Alliance Capital Management L.P.
incidental to the Portfolio's objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through both Alliance Capital Management L.P.
appreciation of capital and current income Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment
Research and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index Seeks a total return before expenses that approximates Alliance Capital Management L.P.
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level
consistent with that of the S&P 500 Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management
Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return through a Alliance Capital Management L.P.
combination of current income and capital
appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod- J.P. Morgan Investment Management, Inc.
erate risk of capital and maintenance of liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of capital Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth MFS Investment Management
Companies
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary MFS Investment Management
objective to seek reasonable current income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research Seeks to provide long-term growth of capital and future MFS Investment Management
income
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary Putnam Investment Management, LLC
Value objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and any increased Putnam Investment Management, LLC
income that results from this growth
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the Russell
2000 Index
- ------------------------------------------------------------------------------------------------------------------------------------
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in all states. Check with your financial professional to see if
fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
Prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2003 through
2012. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the next
available fixed maturity option with the earliest maturity date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value
Contract features and benefits 21
to equal the amount of your entire initial contribution on the fixed maturity
option's maturity date. The maturity date you select generally may not be later
than 10 years, or earlier than 7 years from your contract date. You allocate
the rest of your contribution to the variable investment options however you
choose.
For example, if your initial contribution is $25,000, and on February 15, 2002
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $14,507.17 to that fixed maturity option and the balance to your
choice of variable investment options. On the maturity date your value in the
fixed maturity option would be $25,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information" later in this Prospectus and in the SAI.
Please check with your financial professional if the principal assurance
allocation feature is available in your state. Also, you may not elect
principal assurance if the 12 month dollar cost averaging program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually transfer amounts from
the EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the other
variable investment options you select. This will cause you to purchase more
units if the unit value is low and fewer units if the unit value is high.
Therefore, you may get a lower average cost per unit over the long term. These
plans of investing, however, do not guarantee that you will earn a profit or be
protected against losses. You may not make transfers to the fixed maturity
options.
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Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
12 MONTH DOLLAR COST AVERAGING PROGRAM. Subject to state availability, you may
dollar cost average from the EQ/Alliance Money Market option into any of the
other variable investment options. You may elect to participate in the 12 month
dollar cost averaging program at any time subject to the age limitation on
contributions described in Section 1 of this prospectus. Contributions into the
account for 12 month dollar cost averaging may not be transfers from other
investment options. You must allocate your entire initial contribution into the
EQ/Alliance Money Market option if you are selecting the 12 month dollar cost
averaging program at application to purchase an Accumulator(R) Select(SM)
contract; thereafter your initial allocation to any 12 month dollar cost
averaging program time period must be at least $2,000 and any subsequent
contribution to that same time period must be at least $250. You may only have
one time period in effect at any time. We will transfer your value in the
EQ/Alliance Money Market option into the other variable investment options that
you select over the next 12 months or such other period we may offer. Once the
time period then in effect has run, you may then select to participate in the
dollar cost averaging program for an additional time period. At that time, you
may also select a different allocation for transfers to the variable investment
options, or, if you wish, we will continue to use the selection that you have
previously made.
Currently, the transfer date will be the same day of the month as the contract
date, but not later than the 28th. For a 12 month dollar cost averaging program
selected after application, the first transfer date and each subsequent
transfer date for the time period selected will be one month from the date the
first contribution is made into the 12 month dollar cost averaging program, but
not later than the 28th of the month. All amounts will be transferred out by
the end of the time period then in effect. Under this program we will not
deduct the mortality and expense risks, administrative and distribution charges
from assets in the EQ/Alliance Money Market option.
You may not transfer amounts to the EQ/Alliance Money Market option established
for this program that are not part of the 12 month dollar cost averaging
program. The only amounts that should be transferred from the EQ/Alliance Money
Market option are your regularly scheduled transfers to the other variable
investment options. If you request to transfer or withdraw any other amounts
from the EQ/Alliance Money Market option, we will transfer all of the value
that you have remaining in the account for 12 month dollar cost averaging to
the investment options according to the allocation percentages we have on file
for you. You may ask us to cancel your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options. You can select to have
transfers made on a monthly, quarterly, or annual basis. The transfer date will
be the same calendar day of the month as the contract date, but not later than
the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the
EQ/Alliance Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------
You may not elect general dollar cost averaging or 12 month dollar cost
averaging if you are participating in the rebalancing program. See
"Transferring your money among investment options" later in this Prospectus.
22 Contract features and benefits
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% (3% in Washington) roll up to age 80 guaranteed minimum death benefit.
Your benefit base is not an account value or a cash value. See "Our baseBUILDER
option" and "Guaranteed minimum death benefit" below. The benefit base is equal
to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money" later in this Prospectus).
The effective annual interest rate credited to the benefit base is:
o 5% (3% in Washington for purposes of calculating the guaranteed minimum death
benefit only) for the benefit base with respect to the variable investment
options (other than the AXA Premier VIP Core Bond, EQ/Alliance
Intermediate Government Securities, EQ/Alliance Money Market and
EQ/Alliance Quality Bond options), and the 12 month dollar cost averaging
program; and
o 3% for the benefit base with respect to the AXA Premier VIP Core Bond,
EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market
and EQ/Alliance Quality Bond options, the fixed maturity options and the
loan reserve account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract date anniversary
following the annuitant's 80th birthday.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our baseBUILDER
option" and annuity payout options are discussed in "Accessing your money"
later in this Prospectus. The guaranteed annuity purchase factors are those
factors specified in your contract. The current annuity purchase factors are
those factors that are in effect at any given time. Annuity purchase factors
are based on interest rates, mortality tables, frequency of payments, the form
of annuity benefit and the annuitant's (and any joint annuitant's) age and sex
in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses" later in this Prospectus.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability. For contracts issued in Oregon, only the income manager
life with a period certain payout annuity contract is available. For contracts
issued in Washington, the income manager payout feature is not available. You
choose which of these payout options you want and whether you want the option
to be paid on a single or joint life basis at the time you exercise your
guaranteed minimum income benefit. The maximum period certain available under
the Income Manager payout option is 10 years. This period may be shorter,
depending on the annuitant's age when you exercise your guaranteed minimum
income benefit and the type of contract you own. We may also make other forms
of payout options available. For a description of payout options, see "Your
annuity payout options" in "Accessing your money" later in this Prospectus.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base less any outstanding loan plus accrued interest
(applies to Rollover TSA only) at guaranteed annuity purchase factors, or (ii)
the income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the annuitant's (or joint annuitant's, if
applicable) death. There is no continuation of benefits following the
annuitant's (or joint annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below
illustrates the guaranteed minimum income benefit amounts per $100,000 of
initial contribution, for a male annuitant age 60 (at issue) on the contract
date anniversaries indicated, who has elected the life annuity fixed payout
option, using the guaranteed annuity pur-
Contract features and benefits 23
chase factors as of the date of this prospectus, assuming no additional
contributions, withdrawals or loans under Rollover TSA contracts, and assuming
there were no allocations to the AXA Premier VIP Core Bond, EQ/Alliance
Intermediate Government Securities, Alliance Money Market or EQ/Alliance
Quality Bond options, the fixed maturity options or the loan reserve account.
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GUARANTEED MINIMUM INCOME
CONTRACT DATE BENEFIT -- ANNUAL INCOME
ANNIVERSARY AT EXERCISE PAYABLE FOR LIFE
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10 $10,816
15 $16,132
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise
the benefit. You will begin receiving payments one payment period after the
annuity payout contract is issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 (age 53 in
Oregon) when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary after the annuitant is
age 60.
o If the annuitant was at least age 50 (age 54 in Oregon) and no older than
age 75 when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary beginning with the 10th (7th in Oregon) contract date
anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 85th (83rd in
Oregon) birthday; and
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first (in Oregon, the first and second contract date
anniversary) contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 (63 in Oregon) at the time an
IRA, QP or Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can be
exercised; and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you don't elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% (3% in Washington) roll up to age 80" or the
"annual ratchet to age 80" guaranteed minimum death benefit when you apply for
a contract. Once you have made your election, you may not change it.
5% (3% IN WASHINGTON) ROLL UP TO AGE 80. The guaranteed minimum death benefit
is equal to the benefit base described earlier in "Your benefit base," and is
subject to state availability.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum
death benefit to equal your account value. On the other hand, if your account
value on the contract date anniversary is less than your guaranteed minimum
death benefit, we will not adjust your guaranteed minimum death benefit either
up or down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on
the date the contribution is allocated to your investment options.
If you take a withdrawal from your contract, we will reduce your guaranteed
minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
24 Contract features and benefits
See Appendix IV at the end of this Prospectus for an example of how we
calculate the guaranteed minimum death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus for the
potential tax consequences of electing to purchase the Protection Plus feature
in an NQ or IRA contract.
If the annuitant is 69 or younger when we issue your Contract (or if the
successor owner/annuitant is 69 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
40% of the lesser of:
o the total net contributions or
o the death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including surrender charges and loans). Reduction on a pro rata basis means
that we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
If the annuitant is age 70 through 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 70 and 75 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
25% of the lesser of:
o the total net contributions (as described above) or
o the death benefit (as described above) less total net contributions
Protection Plus must be elected when the contract is first issued: neither the
owner nor the successor owner/annuitant can add it subsequently. Ask your
financial professional if this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), and (ii) any positive or negative market
value adjustments in the fixed maturity options through the date we receive
your contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) or (ii) above). For any IRA contract returned
to us within seven days after you receive it, we are required to refund the
full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your financial professional, can provide you with the
cancellation instructions.
Contract features and benefits 25
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applicable to Rollover
TSA contracts only). These amounts are subject to certain fees and charges
discussed under "Charges and expenses" later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less the
amount of any outstanding loan plus accrued interest (applicable to Rollover
TSA contracts only). Please see "Surrendering your contract to receive its cash
value" in "Accessing your money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal;
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge and/or the
Protection Plus benefit charge the number of units credited to your contract
will be reduced. A description of how unit values are calculated is found in
the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
26 Determining your contract's value
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately
following the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Select(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually on a contract year basis).
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested. The rebalancing program will remain in effect unless you
request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging or 12 month dollar cost averaging program.
Rebalancing is not available for amounts you have allocated in the fixed
maturity options.
Transferring your money among investment options 27
4. Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
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METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------------
LIFETIME
REQUIRED
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------------
NQ Yes Yes No No
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Rollover IRA Yes Yes Yes Yes
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Roth
Conversion IRA Yes Yes Yes No
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QP Yes No No Yes
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Rollover TSA* Yes Yes No Yes
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* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and
in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Under Rollover TSA contracts, if a loan is outstanding, you may only take lump
sum withdrawals as long as the cash value remaining after any withdrawal equals
at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, the amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP and Rollover TSA contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribu-
28 Accessing your money
tion withdrawal payments will be made annually. See the "Required minimum
distributions" section in "Tax information" later in this Prospectus and in the
SAI for your specific type of retirement arrangement.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, QP and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options. If those amounts are insufficient,
we will deduct all or a portion of the charge from amounts in the 12 month
dollar cost averaging program.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% (3% in Washington) roll up to age 80 -- If you elect the 5% roll up to age
80 guaranteed minimum death benefit, your benefit base will be reduced on a
dollar-for-dollar basis as long as the sum of your withdrawals in a contract
year is 5% or less of the benefit base on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the benefit base on the most recent contract
date anniversary, that withdrawal and any subsequent withdrawals in that same
contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
benefit base and current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 85 -- If your contract was issued when the
annuitant was between ages 80 and 85, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time
Accessing your money 29
your loan is outstanding. On each contract date anniversary after the date the
loan is processed, we will transfer the amount of interest earned in the loan
reserve account to the variable investment options on a pro rata basis. When
you make a loan repayment, unless you specify otherwise, we will transfer the
dollar amount of the loan repaid from the loan reserve account to the
investment options according to the allocation percentages we have on our
records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw and, upon surrender, payment of the cash value. We may postpone such
payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Select(SM) offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option" earlier in this
Prospectus).
- --------------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
- --------------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available in
payout options New York)
Life annuity with period certain
- --------------------------------------------------------------------------------
Income Manager payout options Life annuity with period certain
(available for annuitants age 83 Period certain annuity
or less at contract issue)
- --------------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain and life annuity with refund
certain payout options are available on a single life or joint and survivor
life basis. The joint and survivor life annuity guarantees payments for the
rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide details.
30 Accessing your money
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only).
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Select(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Select(SM). For the tax consequences of withdrawals, see "Tax
information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Select(SM) contract date.
Except with respect to the Income Manager annuity payout options, where
payments are made on the 15th day of each month, you can change the date your
annuity payments are to begin anytime before that date as long as you do not
choose a date later than the 28th day of any month.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- ------------------------------------------------------------
MAXIMUM
ISSUE AGE ANNUITIZATION AGE
- ------------------------------------------------------------
0-75 85
76 86
77 87
78-80 88
81-85 90
- ------------------------------------------------------------
This may also be different in other states.
Accessing your money 31
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
32 Accessing your money
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o A charge for baseBUILDER, if you elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
o A charge for Protection Plus, if you elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" later in this Prospectus.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the contracts to
increase this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85 (83 in Oregon),
whichever occurs first. The charge is equal to 0.30% of the benefit base in
effect on the contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in order of the earliest maturity date(s) first, and then,
from amounts in the 12 month dollar cost averaging program. A market value
adjustment may apply.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.20% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment option on a
pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in the order of the earliest maturity date(s) first, and
then, from amounts in the 12 month dollar cost averaging program. A market
value adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (the rate is
1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
Charges and expenses 33
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this Prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the mortality and
expense risks charge or change the minimum initial contribution requirements.
We also may change the guaranteed minimum income benefit and the guaranteed
minimum death benefit or offer variable investment options that invest in
shares of either Trust that are not subject to the 12b-1 fee. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
34 Charges and expenses
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) and any amount applicable under the Protection Plus feature, as
of the date we receive satisfactory proof of the annuitant's death, any
required instructions for the method of payment, information and forms
necessary to effect payment. The amount of the guaranteed minimum death benefit
will be the guaranteed minimum death benefit as of the date of the annuitant's
death, adjusted for any subsequent withdrawals. Under Rollover TSA contracts we
will deduct the amount of any outstanding loan plus accrued interest from the
amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive this death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (new
owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will
pay any cash value five years after your death (or the death of the first
owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor
Payment of death benefit 35
owner/annuitant feature, we will increase the account value to equal your
guaranteed minimum death benefit as of the date of your death if such death
benefit is greater than such account value, plus any amount applicable under
the Protection Plus feature and adjusted for any subsequent withdrawals. The
increase in the account value will be allocated to the investment options
according to the allocation percentages we have on file for your contract. In
determining whether the guaranteed minimum death benefit will continue to grow,
we will use your surviving spouse's age (as of the date we receive satisfactory
proof of your death, any required instructions and the information and forms
necessary to effect the successor owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the death benefit as of
the date of your death, if such death benefit is greater than such account
value, plus any amount applicable under the Protection Plus feature and
adjusted for any subsequent withdrawals. The beneficiary continuation option is
available if we have received regulatory clearance in your state. Where an IRA
contract is owned in a custodial individual retirement account, the custodian
may reinvest the death benefit in an Accumulator(R) Select(SM) individual
retirement annuity contract, using the account beneficiary as the annuitant.
Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in
effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions
for the method of payment and the information and forms necessary to
effect payment), unless such person elects to continue the payment method
elected by the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
36 Payment of death benefit
7. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Select(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers or federal gift and estate taxes. Transfers of the contract,
rights under the contract, or payments under the contract may be subject to
gift or estate taxes. You should not rely only on this document, but should
consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans.
In addition to increasing amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator(R) Select(SM)'s 12 Month Dollar Cost Averaging,
choice of death benefits, selection of investment funds and fixed maturity
options and its choices of pay-out options, as well as the features and
benefits of other permissible funding vehicles and the relative costs of
annuities and other arrangements. You should be aware that cost may vary
depending on the features and benefits made available and the charges and
expenses of the investment options or funds that you elect. See also Appendix
II at the end of this Prospectus for a discussion of QP contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
Tax information 37
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which is part of the contract and which should have no adverse tax effect, it
is possible that the IRS could take a contrary position or assert that the
Protection Plus rider is not part of the contract. In such a case the charges
for the Protection Plus rider could be treated for federal income tax purposes
as a partial withdrawal from the contract. If this were so, such a deemed
withdrawal could be taxable and, for contract owners under age 59-1/2, also
subject to a tax penalty. Were the IRS to take this position, Equitable would
take all reasonable steps to attempt to avoid this result, which would include
amending the contract (with appropriate notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the NQ
contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Select(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Select(SM) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between carriers and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER
YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
currently included in your gross income for federal income tax purposes.
Incidents of investment control could include among other items, the number of
investment options available under a contract and/or the frequency of transfers
available under the contract. In connection with the issuance of regulations
concerning investment diversification in 1986, the Treasury Department
announced that the diversification regulations did not provide guidance on
investor control but that guidance would be issued in the form of regulations
or rulings. As of the date of this prospectus, no such guidance has been
issued. It is not known whether such guidelines, if in fact issued, would have
retroactive adverse effect on existing contracts. We can not provide assurance
as to the terms or scope of any future guidance nor any assurance that such
guidance would not be imposed on a retroactive
38 Tax information
basis to contracts issued under this prospectus. We reserve the right to modify
the contract as necessary to attempt to prevent you from being considered the
owner of the assets of the separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets funding the account
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account . In
an individual retirement annuity, an insurance company issues an annuity
contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator(R) Select(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Select(SM) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) SELECT(SM)
CONTRACT AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE PARAGRAPH
ABOVE DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We have filed a
request with the IRS that the contract with the Protection Plus feature
qualifies as to form for use as a traditional IRA and Roth IRA, respectively.
THERE IS NO ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS
THE IRS QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may not invest in
life insurance contracts. Although we view the optional Protection Plus benefit
as an investment protection feature which should have no adverse tax effect and
not as life insurance, it is possible that the IRS could take a contrary
position regarding tax qualification or assert that the Protection Plus rider is
not a permissible part of an individual retirement annuity contract. We further
view the optional Protection Plus benefit as part of the contract. There is also
a risk that the IRS may take the position that the optional Protection Plus
benefit is not part of the annuity contract. In such a case, the charges for the
Protection Plus rider could be treated for federal income tax purposes as a
partial withdrawal from the contract. If this were so, such a deemed withdrawal
could be taxable, and for contract owners under age 59-1/2, also subject to a
tax penalty. Were the IRS to take any adverse position, Equitable would take all
reasonable steps to attempt to avoid any adverse result, which would include
amending the contract (with appropriate notice to you). YOU SHOULD DISCUSS WITH
YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER PURCHASING AN ACCUMULATOR(R)
SELECT(SM) IRA OR ACCUMULATOR(R) SELECT(SM) ROTH IRA WITH THE OPTIONAL
PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
Tax information 39
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA , surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally there are two types of funding vehicles available for 403(b)
arrangements -- an annuity contract under Section 403(b)(1) of the Code or a
custodial account which invests only in mutual funds and which is treated as an
annuity contract under Section 403(b)(7) of which the Code. Both types of
403(b) arrangements qualify for tax deferral.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Select Rollover TSA contract:
o a rollover from another eligible retirement plan, or
40 Tax information
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of
the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) Select(SM) contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Select(SM) Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Select(SM) Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to the withdrawal restrictions may depend on the
source of the funds used to establish the Accumulator(R) Select(SM) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over an "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation of service, if later. These rules are discussed in greater detail
in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding
Tax information 41
in some cases. Generally, we do not have to withhold if your distributions are
not taxable. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of your distribution. Any income tax withheld
is a credit against your income tax liability. If you do not have sufficient
income tax withheld or do not make sufficient estimated income tax payments,
you may incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional
IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution
is includable in your gross income. This may result in tax being withheld
even though the Roth IRA distribution is ultimately not taxable. You can
elect out of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2 or
retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 and Separate
Account No. 49 for taxes. We do not now, but may in the future set up reserves
for such taxes.
42 Tax information
8. More information
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ABOUT SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 45 and
Separate Account No. 49. We established Separate Account No. 45 in 1994 and
Separate Account No. 49 in 1996 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts. We are the legal owner of all of the
assets in Separate Account No. 45 and in Separate Account No. 49 and may
withdraw any amounts that exceed our reserves and other liabilities with
respect to variable investment options under our contracts. The results of the
Separate Accounts' operations are accounted for without regard to Equitable
Life's other operations.
Each Separate Account is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or the Separate Accounts.
Each subaccount (variable investment option) within the Separate Accounts
invests solely in Class IB/B shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from either Separate Account, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate each Separate Account or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against each Separate Account
or a variable investment option directly);
(5) to deregister the Separate Accounts under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to the Separate Accounts ;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999 EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling its
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to its
Class IB/B shares and other aspects of its operations, appears in the
prospectuses for each Trust, which are attached at the end of this Prospectus,
or in the respective SAIs which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table are illustrative only
and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your financial professional.
The rates to maturity for new allocations as of February 15, 2002 and the
related price per $100 of maturity value were as shown below:
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
WITH FEBRUARY 15TH RATE TO MATURITY
MATURITY DATE OF AS OF PRICE PER $100 OF
MATURITY YEAR FEBRUARY 15, 2002 MATURITY VALUE
- --------------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
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More information 43
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
WITH FEBRUARY 15TH RATE TO MATURITY
MATURITY DATE OF AS OF PRICE PER $100 OF
MATURITY YEAR FEBRUARY 15, 2002 MATURITY VALUE
- --------------------------------------------------------------------------------
2008 4.82% $ 75.38
2009 5.08% $ 70.67
2010 5.29% $ 66.19
2011 5.47% $ 61.90
2012 5.59% $ 58.03
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based
on a 365-day year. For example, three years and 12 days becomes
3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. See Appendix III at the end of
this Prospectus for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
44 More information
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits" earlier in
this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form. Until we receive the signed application or the signed
Acknowledgement of Receipt form, your ability to perform financial transactions
may be limited.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT
EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m., Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity in
effect for that fixed maturity option on the business day of the transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in each prospectus for the Trusts or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
More information 45
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to the Separate Accounts require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45 and Separate Account No. 49, our ability to meet
our obligations under the contracts or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001, in this prospectus
by reference to the 2001 Annual Report on Form 10-K are incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45 and Separate Account No.
49, as well as the consolidated financial statements of Equitable Life, are in
the applicable SAI. The SAI is available free of charge. You may request one by
writing to our processing office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. If your individual
retirement annuity contract is held in your custodial individual retirement
account, you may only assign or transfer ownership of such an IRA contract to
yourself. Loans are not available and you cannot assign Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contracts as security for a loan or other
obligation. If the employer that provided the funds does not restrict them,
loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules .
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC and AXA Distributors,
LLC. For this purpose, AXA Advisors, LLC serves as the principal underwriter of
Separate Account No. 45, and AXA Distributors, LLC serves as the principal
underwriter of Separate Account No. 49. The offering of the contracts is
intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for sales and
marketing functions for the contracts funded through Separate Account No. 45.
AXA Advisors also acts as distributor for other Equitable Life annuity products
with different features, expenses and fees. AXA Advisors is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
These contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
DISTRIBUTION OF THE CONTRACTS BY AXA DISTRIBUTORS, LLC
AXA Distributors, LLC ("AXA Distributors"), an indirect, wholly owned
subsidiary of Equitable Life, has responsibility for sales and marketing
functions for the contracts funded through Separate Account No. 49.
46 More information
AXA Distributors also acts as distributor for other Equitable Life annuity
products with different features, expenses, and fees. AXA Distributors is
registered with the SEC as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. AXA Distributors' principal business
address is 1290 Avenue of the Americas, New York, New York 10104.
AXA Distributors is the successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. Like AXA Distributors, Equitable
Distributors, Inc. was owned by Equitable Holdings, LLC.
These contracts are sold by financial professionals of AXA Distributors, as
well as by affiliated and unaffiliated broker-dealers who have entered into
selling agreements with AXA Distributors. We pay broker-dealer sales
compensation that will generally not exceed an amount equal to 7% of total
contributions made under the contracts. AXA Distributors may also receive
compensation and reimbursement for its marketing services under the terms of
its distribution agreement with Equitable Life. Broker-dealers receiving sales
compensation will generally pay a portion of it to their financial professional
as commissions related to sales of the contracts. The offering of the contracts
is intended to be continuous.
More information 47
9. Investment performance
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The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all current fees and charges under the contract,
including the optional baseBUILDER benefits charge and the charge for
Protection Plus, but does not reflect the charges designed to approximate
certain taxes imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts were offered
for the first time in 2000.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985, reflect the results of the variable investment options that preceded
them. The "Since portfolio inception" figures for these options are based on
the date of inception of the preceding variable investment options. We have
adjusted these results to reflect the maximum investment advisory fee payable
for the portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
48 Investment performance
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
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LENGTH OF OPTION PERIOD
-------------------------------------------
SINCE OPTION
VARIABLE INVESTMENT OPTIONS 1 YEAR 5 YEARS INCEPTION*
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EQ/Aggressive Stock (26.38)% (5.13)% (4.95)%
- --------------------------------------------------------------------------------
EQ/Alliance Common Stock (12.18)% 7.61% 8.22%
- --------------------------------------------------------------------------------
EQ/Alliance Global (21.55)% 1.83% 2.22%
- --------------------------------------------------------------------------------
EQ/Alliance Growth Investors (14.03)% 5.19% 5.36%
- --------------------------------------------------------------------------------
EQ/Alliance Money Market 1.90% 2.80% 2.72%
- --------------------------------------------------------------------------------
EQ/Alliance Premier Growth (25.19)% -- (12.50)%
- --------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (14.63)% -- 7.24%
- --------------------------------------------------------------------------------
EQ/Alliance Technology (25.66)% -- (34.99)%
- --------------------------------------------------------------------------------
EQ/Bernstein Diversified Value 1.44% -- 3.81%
- --------------------------------------------------------------------------------
EQ/Capital Guardian International (22.16)% -- (5.67)%
- --------------------------------------------------------------------------------
EQ/Capital Guardian Research (3.59)% -- 2.00%
- --------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity (3.58)% -- (0.06)%
- --------------------------------------------------------------------------------
EQ/Emerging Markets Equity (6.68)% -- (6.98)%
- --------------------------------------------------------------------------------
EQ/Equity 500 Index (13.58)% 7.84% 8.45%
- --------------------------------------------------------------------------------
EQ/Evergreen Omega (18.35)% -- (8.83)%
- --------------------------------------------------------------------------------
EQ/FI Mid Cap (14.80)% -- (11.07)%
- --------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value 2.33% -- 7.44%
- --------------------------------------------------------------------------------
EQ/High Yield (0.93)% (2.24)% (1.81)%
- --------------------------------------------------------------------------------
EQ/International Equity Index (26.66)% -- (3.45)%
- --------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond 6.21% -- 4.49%
- --------------------------------------------------------------------------------
EQ/Janus Large Cap Growth (24.20)% -- (28.63)%
- --------------------------------------------------------------------------------
EQ/Lazard Small Cap Value 15.85% -- 5.03%
- --------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 3.84% -- 11.60%
- --------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (35.11)% -- 7.44%
- --------------------------------------------------------------------------------
EQ/MFS Investors Trust (17.33)% -- (5.06)%
- --------------------------------------------------------------------------------
EQ/MFS Research (23.08)% -- 3.92%
- --------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (8.31)% -- 3.44%
- --------------------------------------------------------------------------------
EQ/Putnam International Equity (22.79)% -- 6.05%
- --------------------------------------------------------------------------------
EQ/Putnam Voyager (25.67)% -- 4.97%
- --------------------------------------------------------------------------------
EQ/Small Company Index 0.42% -- 1.79%
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
LENGTH OF PORTFOLIO PERIOD
----------------------------------------------------
SINCE
PORTFOLIO
VARIABLE INVESTMENT OPTIONS 3 YEARS 5 YEARS 10 YEARS INCEPTION**
- ---------------------------------------------------------------------------------------------
EQ/Aggressive Stock (10.16)% (5.13)% 1.81% 9.95%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Common Stock (3.38)% 7.61% 10.33% 11.71%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Global (5.51)% 1.83% 6.29% 6.51%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors (1.04)% 5.19% 6.69% 9.71%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Money Market 2.73% 2.80% 2.30% 4.30%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth -- -- -- (12.50)%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth 5.92% -- -- 7.24%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Technology -- -- -- (34.99)%
- ---------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value (0.45)% -- -- 3.80%
- ---------------------------------------------------------------------------------------------
EQ/Capital Guardian International -- -- -- (5.67)%
- ---------------------------------------------------------------------------------------------
EQ/Capital Guardian Research -- -- -- 1.99%
- ---------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity -- -- -- (0.07)%
- ---------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity 1.69% -- -- (11.45)%
- ---------------------------------------------------------------------------------------------
EQ/Equity 500 Index (3.54)% 7.84% -- 11.27%
- ---------------------------------------------------------------------------------------------
EQ/Evergreen Omega (8.83)% -- -- (8.83)%
- ---------------------------------------------------------------------------------------------
EQ/FI Mid Cap -- -- -- (11.74)%
- ---------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value 1.63% -- -- 1.74%
- ---------------------------------------------------------------------------------------------
EQ/High Yield (5.90)% (2.24)% 4.69% 5.04%
- ---------------------------------------------------------------------------------------------
EQ/International Equity Index (9.61)% -- -- (3.45)%
- ---------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond 3.74% -- -- 4.49%
- ---------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth -- -- -- (29.15)%
- ---------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value 10.22% -- -- 5.03%
- ---------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 9.83% -- -- 11.60%
- ---------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (4.23)% -- -- 7.44%
- ---------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (5.07)% -- -- (5.07)%
- ---------------------------------------------------------------------------------------------
EQ/MFS Research (4.88)% -- -- 3.92%
- ---------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (2.55)% -- -- 3.44%
- ---------------------------------------------------------------------------------------------
EQ/Putnam International Equity 1.37% -- -- 6.05%
- ---------------------------------------------------------------------------------------------
EQ/Putnam Voyager (8.60)% -- -- 4.97%
- ---------------------------------------------------------------------------------------------
EQ/Small Company Index 3.95% -- -- 1.79%
- ---------------------------------------------------------------------------------------------
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October 16,
1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard
Small Cap Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian International, EQ/Capital Guardian Research and
EQ/Capital Guardian U.S. Equity (May 1, 1999); EQ/Alliance Technology (May 1,
2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap Value and EQ/Janus Large Cap Growth
(September 5, 2000); EQ/Balanced (May 18, 2001); EQ/Calvert Socially
Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier VIP Core
Bond, AXA Premier VIP Health Care, AXA Premier VIP International Equity, AXA
Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA
Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA
Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology, EQ/Alliance
Growth and Income, EQ/Alliance International, EQ/Alliance Quality Bond,
EQ/AXP New Dimensions and EQ/AXP Strategy Aggressive (January 14, 2002);
EQ/Alliance Intermediate Government Securities (April 1, 2002). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997);
Investment performance 49
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein Diversified Value,
EQ/International Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap
Value and EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and
EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier Growth,
EQ/Capital Guardian International, EQ/Capital Guardian Research and EQ/Capital
Guardian U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September
1, 1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September 1,
2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier VIP
Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP Large
Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap
Value and AXA Premier VIP Technology (December 31, 2001). No performance
information is provided for portfolios and/or variable investment options with
inception dates after December 31, 2000.
50 Investment performance
TABLE FOR SEPARATE ACCOUNT 45
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
- ---------------------------------------------------------------------------------------------
LENGTH OF OPTION PERIOD
-------------------------------------------
SINCE OPTION
VARIABLE INVESTMENT OPTIONS 1 YEAR 5 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------
EQ/Aggressive Stock (26.38)% (5.13)% 1.86%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Common Stock (12.18)% 7.61% 11.91%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Global (21.55)% 1.83% 5.08%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income (3.13)% 11.86% 13.71%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors (14.03)% 5.19% 7.82%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities 6.15% 4.06% 4.19%
- ---------------------------------------------------------------------------------------------
EQ/Alliance International (24.54)% (4.83)% (1.50)%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Money Market 1.90% 2.80% 2.81%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth (25.19)% -- (12.50)%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (14.63)% -- 7.24%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Technology (25.66)% -- (34.99)%
- ---------------------------------------------------------------------------------------------
EQ/AXP New Dimensions (16.87)% -- (24.01)%
- ---------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive (34.54)% -- (48.67)%
- ---------------------------------------------------------------------------------------------
EQ/Capital Guardian Research (3.59)% -- 2.00%
- ---------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity (3.58)% -- (0.06)%
- ---------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity (6.68)% -- (9.96)%
- ---------------------------------------------------------------------------------------------
EQ/Equity 500 Index (13.58)% 7.84% 11.62%
- ---------------------------------------------------------------------------------------------
EQ/Evergreen Omega (18.35)% -- (8.83)%
- ---------------------------------------------------------------------------------------------
EQ/FI Mid Cap (14.80)% -- (11.07)%
- ---------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value 2.33% -- 1.74%
- ---------------------------------------------------------------------------------------------
EQ/High Yield (0.93)% (2.24)% 2.44%
- ---------------------------------------------------------------------------------------------
EQ/International Equity Index (26.66)% -- (3.45)%
- ---------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth (24.20)% -- (28.63)%
- ---------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 3.84% -- 11.60%
- ---------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (35.11)% -- 7.44%
- ---------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (17.33)% -- ( 5.06)%
- ---------------------------------------------------------------------------------------------
EQ/MFS Research (23.08)% -- 3.92%
- ---------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (8.31)% -- 3.44%
- ---------------------------------------------------------------------------------------------
EQ/Small Company Index 0.42% -- 1.79%
- ---------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
LENGTH OF PORTFOLIO PERIOD
----------------------------------------------------
SINCE
PORTFOLIO
VARIABLE INVESTMENT OPTIONS 3 YEARS 5 YEARS 10 YEARS INCEPTION**
- --------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock (10.16)% (5.13)% 1.81% 9.95%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock (3.38)% 7.61% 10.33% 11.71%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Global (5.51)% 1.83% 6.29% 6.51%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income 6.13% 11.86% -- 11.13%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors (1.04)% 5.19% 6.69% 9.71%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities 3.43% 4.06% 3.57% 4.27%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance International (8.57)% (4.83)% -- (1.30)%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market 2.73% 2.80% 2.30% 4.30%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth -- -- -- (12.50)%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth 5.92% -- -- 7.24%
- --------------------------------------------------------------------------------------------------------
EQ/Alliance Technology -- -- -- (34.99)%
- --------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions -- -- -- (24.79)%
- --------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive -- -- -- (49.43)%
- --------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research -- -- -- 1.99%
- --------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity -- -- -- (0.07)%
- --------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity 1.69% -- -- (11.45)%
- --------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index (3.54)% 7.84% -- 11.27%
- --------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega (8.83)% -- -- (8.83)%
- --------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap -- -- -- (11.74)%
- --------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value 1.63% -- -- 1.74%
- --------------------------------------------------------------------------------------------------------
EQ/High Yield (5.90)% (2.24)% 4.69% 5.04%
- --------------------------------------------------------------------------------------------------------
EQ/International Equity Index (9.61)% -- -- (3.45)%
- --------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth -- -- -- (29.15)%
- --------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 9.83% -- -- 11.60%
- --------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (4.23)% -- -- 7.44%
- --------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (5.07)% -- -- (5.07)%
- --------------------------------------------------------------------------------------------------------
EQ/MFS Research (4.88)% -- -- 3.92%
- --------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (2.55)% -- -- 3.44%
- --------------------------------------------------------------------------------------------------------
EQ/Small Company Index 3.95% -- -- 1.79%
- --------------------------------------------------------------------------------------------------------
* The variable option inception dates are: EQ/Aggressive Stock, EQ/Alliance
Common Stock, EQ/Alliance Global, EQ/Alliance Growth and Income, EQ/Alliance
Growth Investors, EQ/Alliance Intermediate Government Securities, EQ/Alliance
International, EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High
Yield (May 1, 1995); EQ/Alliance Small Cap Growth, EQ/FI Small/Mid Cap Value,
EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth Companies, EQ/MFS
Research and EQ/Putnam Growth & Income Value (May 1, 1997); EQ/Emerging
Markets Equity (September 2, 1997); EQ/International Equity Index and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy
Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September 5, 2000);
EQ/Balanced and EQ/Bernstein Diversified Value (May 18, 2001); EQ/Calvert
Socially Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier
VIP Core Bond, AXA Premier VIP Health Care, AXA Premier VIP International
Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap
Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap
Growth, AXA Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology,
EQ/Alliance Quality Bond, EQ/Capital Guardian International, EQ/J.P. Morgan
Core Bond, EQ/Lazard Small Cap Value, EQ/Putnam International Equity and
EQ/Putnam Voyager (January 14, 2002). No performance information is provided
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
Investment performance 51
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) performance relative to other variable annuity
products. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
optional baseBUILDER benefit charge, the optional Protection Plus benefit
charge and any charge designed to approximate certain taxes that may be imposed
on us, such as premium taxes in your state. The yields and effective yields for
the EQ/Alliance Money Market option, when used for the 12 month dollar cost
averaging program, assume that no contract charges are deducted. For more
information, see "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option" in the SAI.
52 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
2000, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 53
(This page intentionally left blank)
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Accounts No. 45 and No. 49 with the same daily asset
charges of 1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 49.16 $ 66.77 $ 78.30 $ 67.13 $ 68.19
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 73 65 16 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 402 420 141 16 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE COMMON STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $203.81 $ 232.08 $ 275.01 $ 223.79 $ 176.22
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 380 310 66 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 661 618 255 35 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GLOBAL
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 26.96 $ 34.37 $ 43.04 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 726 602 97 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH AND INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 25.00 $ 25.80 $ 24.13 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 3,407 1,662 342 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH INVESTORS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 33.29 $ 38.72 $ 42.29 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 933 792 149 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 16.72 $ 15.75 $ 14.70 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,545 486 59 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.48 $ 12.56 $ 16.61 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 404 302 38 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE MONEY MARKET
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 27.16 $ 26.65 $ 25.55 $ 24.80 $ 23.98
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 3,954 1,882 549 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 13,759 9,875 5,805 349 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.07 $ 9.45 $ 11.77 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 5,608 4,909 1,112 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 18,765 17,412 5,630 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE SMALL CAP GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 14.11 $ 16.53 $ 14.78 $ 11.77 $ 12.52
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,276 718 30 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,423 3,189 818 211 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.91 $ 6.60 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 3,001 1,672 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 7,562 5,505 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP NEW DIMENSIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.88 $ 8.28 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 213 29 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP STRATEGY AGGRESSIVE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.06 $ 6.21 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 252 66 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BALANCED
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $39.15 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,005 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 97 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BERNSTEIN DIVERSIFIED VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $11.78 $ 11.61 $ 12.04 $ 11.81 --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,138 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,000 3,700 1,532 315 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY RESPONSIBLE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.62 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 6 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 13 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.64 $ 11.09 $ 13.93 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 5,697 5,514 1,286 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $10.65 $ 11.04 $ 10.60 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 166 112 13 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,151 2,953 987 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN U.S. EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $10.09 $ 10.46 $ 10.26 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 337 155 31 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,886 5,538 2,436 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EMERGING MARKETS EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.04 $ 6.47 $ 10.97 $ 5.70 --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 821 715 126 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,043 2,958 962 203 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $23.93 $ 27.69 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,038 734 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,601 6,057 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN OMEGA
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.66 $ 9.38 $ 10.80 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 90 17 8 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 141 78 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI MID CAP
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.51 $ 9.99 $ 10.45 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 932 126 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,644 617 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI SMALL/MID CAP VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $11.07 $ 10.82 $ 10.45 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,487 87 18 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,090 251 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/HIGH YIELD
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 22.86 $ 23.07 $ 25.73 $ 27.12 $ 29.13
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 500 219 35 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 1,835 1,211 574 170 2
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/INTERNATIONAL EQUITY INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.81 $ 12.02 $ 14.82 $ 11.82 --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 254 147 33 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,518 2,531 992 248 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. MORGAN CORE BOND
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.10 $ 11.40 $ 10.39 $ 10.73 --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 10,537 5,112 2,026 379 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/JANUS LARGE CAP GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.36 $ 8.39 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,187 295 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,856 1,315 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/LAZARD SMALL CAP VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.37 $ 10.68 $ 9.15 $ 9.14 --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,274 2,109 98 344 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MARSICO FOCUS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.33 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 24 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 78 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MERCURY BASIC VALUE EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 17.00 $ 16.37 $ 14.88 $ 12.71 $ 11.58
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,305 431 163 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 1,559 1,079 173 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS EMERGING GROWTH COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 14.20 $ 21.88 $ 27.40 $ 16.03 $ 12.11
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,966 1,834 383 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 5,707 5,759 1,680 200 2
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS INVESTORS TRUST
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.64 $ 10.45 $ 10.70 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 543 359 103 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 8,655 7,052 2,906 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.18 $ 15.84 $ 16.99 $ 14.02 $ 11.48
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 860 712 71 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,188 5,917 1,725 410 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & Income Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.94 $ 13.02 $ 12.39 $ 12.76 $ 11.50
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 287 124 12 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 4,156 1,755 978 714 17
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 13.39 $ 17.34 $ 20.10 $ 12.75 $ 10.84
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,126 2,033 771 422 4
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.75 $ 17.16 $ 21.20 $ 16.54 $ 12.33
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,221 1,658 576 282 --
- ------------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-3
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.90 $ 10.86 $ 11.42 $ 9.61 --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 239 113 23 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 1,535 1,382 522 211 --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/T. Rowe Price International Stock
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.71 $ 11.32 $ 14.15 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 614 368 37 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
A-4 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Select(SM) QP contract should discuss with their tax advisers whether this is an
appropriate investment vehicle for the employer's plan. Trustees should
consider whether the plan provisions permit the investment of plan assets in
the QP contract, the distribution of such an annuity, the purchase of the
guaranteed minimum income benefit and the payment of death benefits in
accordance with the requirements of the federal income tax rules. The QP
contract and this prospectus should be reviewed in full, and the following
factors, among others, should be noted. Assuming continued plan qualification
and operation, earnings on qualified plan assets will accumulate value on a
tax-deferred basis even if the plan is not funded by the Equitable
Accumulator(R) Select(SM) QP contract or another annuity. Therefore, you should
purchase an Equitable Accumulator(R) QP contract to fund a plan for the
contract's features and benefits other than tax deferral, after considering the
relative costs and benefits of annuity contracts and other types of
arrangements and funding vehicles. This QP contract accepts transfer
contributions only and not regular, ongoing payroll contributions. For 401(k)
plans under defined contribution plans, no employee after-tax contributions are
accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A market value
adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70-1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 601/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,846 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- ----------------------------------------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED RATE TO MATURITY ON FEBRUARY 15, 2007
--------------------------------------------------------------------
5.00% 9.00%
- ----------------------------------------------------------------------------------------------------------------------------
AS OF FEBRUARY 15, 2007 (BEFORE WITHDRAWAL)
- ----------------------------------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- ----------------------------------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- ----------------------------------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- ----------------------------------------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2007 (AFTER WITHDRAWAL)
- ----------------------------------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- ----------------------------------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,499 $ 54,851
- ----------------------------------------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- ----------------------------------------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- ----------------------------------------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ----------------------------------------------------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Appendix IV: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market or EQ/Alliance Quality Bond
options or the fixed maturity options), no additional contributions, no
transfers, no withdrawals and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
- -------------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- -------------------------------------------------------------------------------------------
1 $105,000 $ 105,000(1) $ 105,000(3)
- -------------------------------------------------------------------------------------------
2 $115,500 $ 110,250(2) $ 115,500(3)
- -------------------------------------------------------------------------------------------
3 $129,360 $ 115,763(2) $ 129,360(3)
- -------------------------------------------------------------------------------------------
4 $103,488 $ 121,551(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------
5 $113,837 $ 127,628(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------
6 $127,497 $ 134,010(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------
7 $127,497 $ 140,710(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80*
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the guaranteed minimum death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current guaranteed minimum death
benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is the guaranteed minimum death benefit at the end of the prior year
since it is equal to or higher than the current account value.
- -----
* If your contract is issued in the state of Washington, the applicable
crediting rate would be 3%, and, therefore, the values shown would be lower.
Appendix IV: Guaranteed minimum death benefit example D-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option, EQ/Alliance
Quality Bond Option and EQ/High Yield Option 23
Distribution of the contracts 24
Financial Statements 25
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR(R) SELECT(SM) STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 45 AND SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator(R) Select(SM)
P.O. Box 1547 Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --
Please send me an Equitable Accumulator(R) Select(SM) SAI dated 2002:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
(SAI 4ACS(5/02))
Equitable Accumulator(R) Select(SM)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) Select(SM)?
Equitable Accumulator(R) Select(SM) is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
There is no withdrawal charge under the contract. However, we deduct a
distribution charge calculated as a percentage of the amounts in the variable
investment options. We deduct this charge for the life of the contract. This
contract may not currently be available in all states.
- --------------------------------------------------------------------------------
Variable investment options
- --------------------------------------------------------------------------------
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity* o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth* o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth* o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value* o EQ/FI Mid Cap
o AXA Premier VIP Technology* o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock o EQ/High Yield(1)
o EQ/Alliance Common Stock o EQ/International Equity Index
o EQ/Alliance Global o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government o EQ/Marsico Focus*
Securities o EQ/Mercury Basic Value Equity
o EQ/Alliance International o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth o EQ/MFS Research
o EQ/Alliance Quality Bond o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth o EQ/Putnam International Equity
o EQ/Alliance Technology o EQ/Putnam Voyager (2)
o EQ/AXP New Dimensions** o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
- --------------------------------------------------------------------------------
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 45. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"). Your
investment results in a variable investment option will depend on the
investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined contribution
or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
X00307-170
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) SELECT(SM)
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Select(SM) at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 21
Your benefit base 22
Annuity purchase factors 23
Our baseBUILDER option 23
Guaranteed minimum death benefit 24
Your right to cancel within a certain number of days 25
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 26
- --------------------------------------------------------------------------------
Your account value and cash value 26
Your contract's value in the variable investment options 26
Your contract's value in the fixed maturity options 26
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG INVESTMENT
OPTIONS 27
- --------------------------------------------------------------------------------
Transferring your account value 27
Disruptive transfer activity 27
Rebalancing your account value 27
- ----------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 28
- --------------------------------------------------------------------------------
Withdrawing your account value 28
How withdrawals are taken from your account value 29
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit 29
Loans under Rollover TSA contracts 29
Surrendering your contract to receive its cash value 30
When to expect payments 30
Your annuity payout options 30
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 32
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 32
Charges that the Trusts deduct 32
Group or sponsored arrangements 33
Other distribution arrangements 33
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 34
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 34
How death benefit payment is made 34
Beneficiary continuation option 35
- --------------------------------------------------------------------------------
7. TAX INFORMATION 36
- --------------------------------------------------------------------------------
Overview 36
Buying a contract to fund a retirement arrangement 36
Transfers among investment options 36
Taxation of nonqualified annuities 36
Individual retirement arrangements (IRAs) 38
Special rules for contracts funding qualified plans 39
Tax-Sheltered Annuity contracts (TSAs) 39
Federal and state income tax withholding
and information reporting 40
Impact of taxes to Equitable Life 41
- --------------------------------------------------------------------------------
8. MORE INFORMATION 42
- --------------------------------------------------------------------------------
About Separate Account No. 45 42
About the Trusts 42
About our fixed maturity options 42
About the general account 43
About other methods of payment 43
Dates and prices at which contract events occur 44
About your voting rights 44
About legal proceedings 45
About our independent accountants 45
Financial statements 45
Transfers of ownership, collateral assignments, loans
and borrowing 45
Distribution of the contracts 45
- --------------------------------------------------------------------------------
9. INVESTMENT PERFORMANCE 46
- --------------------------------------------------------------------------------
Communicating performance data 48
- --------------------------------------------------------------------------------
10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 49
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed Financial Information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
TERM PAGE IN
PROSPECTUS
account value 26
annuitant 15
annuity payout options 30
Annuity purchase factor 23
baseBUILDER 23
beneficiary 34
benefit base 22
business day 44
cash value 26
contract date 9
contract date anniversary 9
contract year 9
contributions 38
regular contributions 38
rollovers and direct transfers 38
disruptive transfer activity 27
EQAccess 6
ERISA 29
fixed maturity options 21
guaranteed minimum death benefit 24
guaranteed minimum income benefit 23
IRA cover
IRS 36
investment options 17
TERM PAGE IN
PROSPECTUS
loan reserve account 29
market adjusted amount 21
market timing 27
market value adjustment 21
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 38
SAI cover
SEC cover
TOPS 6
TSA 39
traditional IRA 38
Trusts cover
unit 26
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your financial professional can provide further explanation about
your contract or supplemental materials.
- ---------------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
- --------------------------------------------------------------------------------------
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/ or we may be unavailable due to
an emergency closing). In addition, the level and type of service available may
be restricted based on criteria established by us.
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
P.O. Box 13014
Newark, NJ 07188-0014
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR
MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Select(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http:// www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) conversion of a traditional IRA to a Roth Conversion
IRA contract;
(2) election of the automatic investment program;
(3) election of the rebalancing program;
(4) requests for loans under Rollover TSA contracts;
(5) spousal consent for loans under Rollover TSA contracts;
(6) requests for withdrawals or surrenders from Rollover TSA
contracts;
6 Who is Equitable Life?
(7) tax withholding elections;
(8) election of the beneficiary continuation option;
(9) IRA contribution recharacterizations;
(10) certain section 1035 exchanges; and
(11) direct transfers.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) 12 month dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests
would normally be the owner. If there are joint owners all
must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Select(SM) at a glance -- key features
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL INVESTMENT Equitable Accumulator(R) Select(SM)'s variable investment options invest in different portfolios
MANAGEMENT managed by professional investment advisers.
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY OPTIONS o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
--------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any value
that you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
- ------------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
--------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), Tax Sheltered
Annuity (TSA) or to fund an employer retirement plan (QP or Qualified Plan), you should be aware that
such annuities do not provide tax deferral benefits beyond those already provided by the Internal
Revenue Code. Before purchasing one of these annuities, you should consider whether its features and
benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative
features, benefits and costs of these annuities compared with any other investment that you may use in
connection with your retirement plan or arrangement. (For more information, see "Tax information,"
later in this Prospectus and in the SAI.)
- ------------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER(R) PROTECTION baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum death benefit
provided under the contract. The guaranteed minimum income benefit provides income protection for you
while the annuitant lives. The guaranteed minimum death benefit provides a death benefit for the
beneficiary should the annuitant die.
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
--------------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
--------------------------------------------------------------------------------------------------------
You may incur income tax and a tax penalty
- ------------------------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS
o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit, even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o "Protection Plus," an optional death benefit available under certain contracts (subject to state
availability)
- ------------------------------------------------------------------------------------------------------------------------------------
8 Equitable Accumulator(R) Select(SM) at a glance -- key features
- ------------------------------------------------------------------------------------------------------------------------------------
FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality and expense risks,
administrative charges and distribution charges at an annual rate of 1.70%.
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout option or the contract date anniversary after the
annuitant reaches age 85, whichever occurs first. The benefit base is described under "Your benefit base"
in "Contract features and benefits" later in this Prospectus. If you don't elect baseBUILDER, you still
receive a guaranteed minimum death benefit under your contract at no additional charge.
o Annual 0.20% Protection Plus charge for this optional death benefit.
o No sales charge deducted at the time you make contributions, no withdrawal charge and no annual
contract fee.
-------------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we receive the
properly completed and signed application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The end of each 12-month period
is your "contract date anniversary."
-------------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. This charge is generally deducted from the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net assets
invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-85
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-85
QP: 20-75
- ------------------------------------------------------------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES, RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES
OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges, that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your financial
professional can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Select(SM) at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this Prospectus.
The fixed maturity options and the 12 month dollar cost averaging account are
not covered by the fee table and examples. A market value adjustment (up or
down) may apply as a result of a withdrawal, transfer or surrender of amounts
from a fixed maturity option.
- ---------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL
PERCENTAGE OF DAILY NET ASSETS
- ---------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%
Administrative 0.25%
Distribution 0.35%
----
Total annual expenses 1.70%
- ---------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN
TRANSACTIONS
- ---------------------------------------------------------------------------------
Charge if you elect a Variable Immediate Annuity payout option $350
- ---------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL
BENEFIT
- ---------------------------------------------------------------------------------
BASEBUILDER BENEFIT CHARGE (calculated as a percentage of the
benefit base. Deducted annually on each contract date anniversary)(2) 0.30%
- ---------------------------------------------------------------------------------
PROTECTION PLUS BENEFIT CHARGE (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary) 0.20%
- ---------------------------------------------------------------------------------
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- ------------------------------------------------------------------------------------------------------------------------------------
NET
TOTAL ANNUAL
MANAGEMENT FEES OTHER EXPENSES EXPENSES (AFTER
(AFTER EXPENSE (AFTER EXPENSE EXPENSE
PORTFOLIO NAME LIMITATION)(3) 12B-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- ------------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) The benefit base is described under "Your guaranteed minimum income benefit
under baseBUILDER" in "Contract features and benefits" later in this
Prospectus.
(3) The management fees for each portfolio cannot be increased without a vote
of each portfolio's shareholders. See footnote (6) for any expense
limitation agreement information.
Fee table 11
(4) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Also, initial seed capital was invested for the
Portfolios of the AXA Premier VIP Trust on December 31, 2001, thus, "Other
Expenses" shown are estimated. See footnote (6) for any expense limitation
agreement information.
(6) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information, see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- --------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- --------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MANAGEMENT OTHER EXPENSES
FEES (BEFORE ANY (BEFORE ANY FEE
FEE WAIVERS WAIVERS AND/OR
AND/OR EXPENSE EXPENSE
PORTFOLIO NAME REIMBURSEMENTS) REIMBURSEMENTS)
- --------------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- --------------------------------------------------------------------------------
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected baseBUILDER with a 5% roll up to age 80 or annual ratchet to age 80
guaranteed minimum death benefit and Protection Plus) would pay in the
situation illustrated. We assume that a $1,000 contribution is invested in one
of the variable investment options listed and a 5% annual return is earned on
the assets in that option.(1) Since the Protection Plus feature is only
available under certain contracts, expenses would be lower for contracts that
do not have this feature.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each Portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the example.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
- ----------------------------------------------------------------------------------------------
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond $ 29.93 $ 97.76 $ 168.32 $ 357.40
AXA Premier VIP Health Care $ 39.38 $ 125.46 $ 213.37 $ 441.28
AXA Premier VIP International Equity $ 38.85 $ 123.94 $ 210.91 $ 436.82
AXA Premier VIP Large Cap Core Equity $ 34.13 $ 110.14 $ 188.56 $ 395.65
AXA Premier VIP Large Cap Growth $ 34.13 $ 110.14 $ 188.56 $ 395.65
AXA Premier VIP Large Cap Value $ 34.13 $ 110.14 $ 188.56 $ 395.65
AXA Premier VIP Small/Mid Cap Growth $ 36.75 $ 117.82 $ 201.03 $ 418.76
AXA Premier VIP Small/Mid Cap Value $ 36.75 $ 117.82 $ 201.03 $ 418.76
AXA Premier VIP Technology $ 39.38 $ 125.46 $ 213.37 $ 441.28
EQ/Aggressive Stock $ 29.82 $ 97.45 $ 167.81 $ 356.42
EQ/Alliance Common Stock $ 28.14 $ 92.47 $ 159.62 $ 340.65
EQ/Alliance Global $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/Alliance Growth and Income $ 29.19 $ 95.58 $ 164.75 $ 350.54
EQ/Alliance Growth Investors $ 29.19 $ 95.58 $ 164.75 $ 350.54
EQ/Alliance Intermediate Government
Securities $ 29.09 $ 95.27 $ 164.23 $ 349.55
EQ/Alliance International $ 34.13 $ 110.14 $ 188.56 $ 395.65
EQ/Alliance Money Market $ 26.78 $ 88.41 $ 152.91 $ 327.65
EQ/Alliance Premier Growth $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Alliance Quality Bond $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Alliance Small Cap Growth $ 31.08 $ 101.17 $ 173.92 $ 368.07
EQ/Alliance Technology $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/AXP New Dimensions $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/AXP Strategy Aggressive $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/Balanced $ 29.40 $ 96.20 $ 165.77 $ 352.50
EQ/Bernstein Diversified Value $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Calvert Socially Responsible $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Capital Guardian International $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/Capital Guardian Research $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Capital Guardian U.S. Equity $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Emerging Markets Equity $ 38.85 $ 123.94 $ 210.91 $ 436.82
EQ/Equity 500 Index $ 25.83 $ 85.59 $ 148.25 $ 318.55
EQ/Evergreen Omega $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/FI Mid Cap $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/FI Small/Mid Cap Value $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/High Yield $ 29.61 $ 96.83 $ 166.79 $ 354.46
EQ/International Equity Index $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/J.P. Morgan Core Bond $ 28.35 $ 93.09 $ 160.64 $ 342.64
EQ/Janus Large Cap Growth $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Lazard Small Cap Value $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/Marsico Focus $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Mercury Basic Value Equity $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/MFS Emerging Growth Companies $ 30.14 $ 98.38 $ 169.34 $ 359.35
EQ/MFS Investors Trust $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/MFS Research $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Putnam Growth & Income Value $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Putnam International Equity $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/Putnam Voyager $ 29.93 $ 97.76 $ 168.32 $ 357.40
EQ/Small Company Index $ 28.88 $ 94.65 $ 163.21 $ 347.58
- ----------------------------------------------------------------------------------------------
Fee table
13
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods shown
in the examples. This is because if the amount applied to purchase an
annuity payout option is less than $2,000, or the initial payment is less
than $20, we may pay the amount to you in a single sum instead of payments
under an annuity payout option. See "Accessing your money" later in this
Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $5.44 based on the average amount
applied to annuity payout options in 2001. See "Annuity administrative fee" in
"Charges and expenses" later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
14 Fee table
1. Contract features and benefits
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HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. All ages in the table refer
to the age of the annuitant named in the contract.
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The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
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AVAILABLE FOR
ANNUITANT ISSUE SOURCE OF
CONTRACT TYPE AGES CONTRIBUTIONS LIMITATIONS ON CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 85 o After-tax money. o No additional contributions after age 86.
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue Code.
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Rollover IRA 20 through 85 o Eligible rollover distributions from TSA o No rollover or direct transfer contributions
contracts or other 403(b) arrangements, after age 86.
qualified plans, and governmental EDC plans.
o Contributions after age 70-1/2 must required
o Rollovers from another traditional minimum distributions.
individual retirement arrangement.
o Direct custodian-to-custodian transfers o Although we accept regular IRA contributions
from another traditional individual (limited to $3,000 for the calendar year 2002)
retirement arrangement. under Rollover IRA contracts, we intend that
this contract be used primarily for rollover
o Regular IRA contributions. and direct transfer contributions.
o For the calendar year 2002 and later, o Additional catch-up contributions totalling up
additional "catch-up" contributions. to $500 can be made for the calendar year 2002
where the owner is at least age 50 but under
o Rollovers from another Roth IRA. age 70-1/2 at any time during 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 85 o Conversion rollovers from a traditional o No additional rollover or direct transfer
IRA IRA. contributions after age 86.
o Direct transfers from another Roth IRA. o Conversion rollovers after age 70-1/2 must be
net of required minimum distributions for the
o Regular Roth IRA contributions. traditional IRA you are rolling over.
o For the calendar year 2002 and later, o You cannot roll over funds from a traditional
additional catch-up contributions. IRA if your adjusted gross income is $100,000
or more.
o Although we accept regular Roth IRA contri-
butions (limited to $3,000 for the calendar
year 2002) under Roth IRA contracts, we
intend that this contract be used primarily for
rollover and direct transfer contributions.
o Additional catch-up contributions totalling up
to $500 can be made for the calendar year
2002 where the owner is at least age 50 at
any time during 2002.
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Contract features and benefits 15
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AVAILABLE FOR
ANNUITANT ISSUE SOURCE OF
CONTRACT TYPE AGES CONTRIBUTIONS LIMITATIONS ON CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o Direct transfers of pre-tax funds from another o No additional rollover or direct transfer
contract or arrangement under Section 403(b) contributions after age 86.
of the Internal Revenue Code, complying with
IRS Revenue Ruling 90-24. o Rollover or direct transfer contributions
after age 70-1/2 must be net of any required
o Eligible rollover distributions of pre-tax funds minimum distributions.
from other 403(b) plans, qualified plans,
governmental EDC plans and traditional IRAs. o Employer-remitted contributions are not
permitted.
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QP 20 through 75 o Only transfer contributions from an existing o Regular ongoing payroll contributions are not
qualified plan trust as a change of investment permitted.
vehicle under the plan.
o Only one additional transfer contribution may
o The plan must be qualified under Section 401(a) be made during a contract year.
of the Internal Revenue Code.
o No additional transfer contributions after
o For 401(k) plans, transferred contributions may age 76.
only include employee pre-tax contributions.
o For defined benefit plans, employee
contributions are not permitted and we will
not accept contributions that fund more than
80% of the actuarial value of the plan
participant/employee's normal retirement
benefit.
o Contributions after age 70-1/2 must be net of
a required minimum distributions.
See Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Select(SM) contracts with the
same annuitant would then total more than $1,500,000. We reserve the right to
limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
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A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
Additional contributions may also be made under our automatic investment
program. This method of payment is discussed in detail in "More information"
later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
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Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
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WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
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You can choose from among the variable investment options and the fixed
maturity options.
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Contract features and benefits 17
PORTFOLIOS OF THE TRUSTS
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as Accumulator(R)
Select(SM). These portfolios may even have the same manager(s) and/or a similar
name. However, there are numerous factors that can contribute to differences in
performance between two investments, particularly over short periods of time.
Such factors include the timing of stock purchases and sales; differences in
fund cash flows; and specific strategies employed by the portfolio manager.
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AXA PREMIER VIP TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital Pacific Investment Management Company LLC
appreciation consistent with a
prudent level of risk
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLC
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
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AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P., through its
Equity* Bernstein Investment Research and
Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
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AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
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AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital management L.P.
Institutional Capital Corporation
MFS Investment Management
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AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management LLC
TCW Investment Management Company
- ----------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
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EQ ADVISORS TRUST:
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
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EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and
increased income
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EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return Alliance Capital Management L.P
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent Alliance Capital Management L.P.
with the Adviser's determination of reasonable risk
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EQ/Alliance Intermediate Seeks to achieve high current income consistent Alliance Capital Management L.P.
Government Securities* with relative stability of principal
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International Seeks long-term growth of capital Alliance Capital Management L.P.
(including through its Bernstein
Investment Research and Management Unit)
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EQ/Alliance Money Market Seeks to obtain a high level of current income, Alliance Capital Management L.P.
preserve its assets and maintain liquidity
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EQ/Alliance Premier Growth Seeks long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond Seeks to achieve high current income consistent Alliance Capital Management L.P.
with moderate risk of capital
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EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Seeks to achieve growth of capital. Current Alliance Capital Management L.P.
income is incidental to the Portfolio's objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions Seeks long-term growth of capital American Express Financial Corporation
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EQ/AXP Strategy Aggressive Seeks long-term growth of capital American Express Financial Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced Seeks to achieve a high return through both Alliance Capital Management L.P.
appreciation of capital and current income Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
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EQ/Bernstein Diversified Value Seeks capital appreciation Alliance Capital Management L.P.,
through its Bernstein Investment
Research and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity Seeks long-term capital appreciation Morgan Stanley Investment Management
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EQ/Equity 500 Index Seeks a total return before expenses that approximates Alliance Capital Management L.P.
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level
consistent with that of the S&P 500 Index
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega Seeks long-term capital growth Evergreen Investment Management
Company, LLC
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EQ/FI Mid Cap Seeks long-term growth of capital Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield Seeks to achieve a high total return through a combina- Alliance Capital Management L.P.
tion of current income and capital appreciation
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Contract features and benefits 19
PORTFOLIOS OF THE TRUSTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER(S)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
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EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod- J.P. Morgan Investment Management, Inc.
erate risk of capital and maintenance of liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth Seeks long-term growth of capital Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value Seeks capital appreciation Lazard Asset Management
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus* Seeks to achieve long-term growth of capital Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income Mercury Advisors
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Seeks to provide long-term capital growth MFS Investment Management
Companies
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary MFS Investment Management
objective to seek reasonable current income
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EQ/MFS Research Seeks to provide long-term growth of capital and future MFS Investment Management
income
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EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary Putnam Investment Management, LLC
Value objective
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EQ/Putnam International Equity Seeks capital appreciation Putnam Investment Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager Seeks long-term growth of capital and any increased Putnam Investment Management, LLC
income that results from this growth
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EQ/Small Company Index Seeks to replicate as closely as possible (before deduc- Deutsche Asset Management Inc.
tion of Portfolio expenses) the total return of the Russell
2000 Index
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* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in all states. Check with your financial professional to see if
fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail in "More information"
later in this Prospectus.
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2003 through
2012. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the next
available fixed maturity option with the earliest maturity date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures, we will make a market value adjustment,
which will increase or decrease any fixed maturity amount you have in that
fixed maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value
Contract features and benefits 21
to equal the amount of your entire initial contribution on the fixed maturity
option's maturity date. The maturity date you select generally may not be later
than 10 years, or earlier than 7 years from your contract date. You allocate
the rest of your contribution to the variable investment options however you
choose.
For example, if your initial contribution is $25,000 and on February 15, 2002
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $14,507.17 to that fixed maturity option and the balance to your
choice of variable investment options. On the maturity date your value in the
fixed maturity option would be $25,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information" later in this Prospectus and in the SAI.
Please check with your financial professional if the principal assurance
allocation feature is available in your state. Also, you may not elect
principal assurance if the 12 month dollar cost averaging program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually transfer amounts from
the EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the other
variable investment options you select. This will cause you to purchase more
units if the unit value is low and fewer units if the unit value is high.
Therefore, you may get a lower average cost per unit over the long term. These
plans of investing, however, do not guarantee that you will earn a profit or be
protected against losses. You may not make transfers to the fixed maturity
options.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
12 MONTH DOLLAR COST AVERAGING PROGRAM. Subject to state availability, you may
dollar cost average from the EQ/Alliance Money Market option into any of the
other variable investment options. You may elect to participate in the 12 month
dollar cost averaging program at any time subject to the age limitation on
contributions described in Section 1 of this prospectus. Contributions into the
account for 12 month dollar cost averaging may not be transfers from other
investment options. You must allocate your entire initial contribution into the
EQ/Alliance Money Market option if you are selecting the 12 month dollar cost
averaging program at application to purchase an Accumulator Select contract;
thereafter your initial allocation to any 12 month dollar cost averaging
program time period must be at least $2,000 and any subsequent contribution to
that same time period must be at least $250. You may only have one time period
in effect at any time. We will transfer your value in the EQ/Alliance Money
Market option into the other variable investment options that you select over
the next 12 months or such other period we may offer. Once the time period then
in effect has run, you may then select to participate in the dollar cost
averaging program for an additional time period. At that time, you may also
select a different allocation for transfer to the variable investment options,
or, if you wish, we will continue to use the selection that you have previously
made.
Currently, the transfer date will be the same day of the month as the contract
date, but not later than the 28th. For a 12 month dollar cost averaging program
selected after application, the first transfer date and each subsequent
transfer date for the time period selected will be one month from the date the
first contribution is made into the 12 month dollar cost averaging program, but
not later than the 28th of the month. All amounts will be transferred out by
the end of the time period then in effect. Under this program we will not
deduct the mortality and expense risks, administrative, and distribution
charges from assets in the EQ/Alliance Money Market option.
You may not transfer amounts to the EQ/Alliance Money Market option that are
not part of the 12 month dollar cost averaging program. The only amounts that
should be transferred from the EQ/Alliance Money Market option are your
regularly scheduled transfers to the other variable investment options. If you
request to transfer or withdraw any other amounts from the EQ/Alliance Money
Market option, we will transfer all of the value that you have remaining in the
account for 12 month dollar cost averaging to the investment options according
to the allocation percentages we have on file for you. You may ask us to cancel
your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options. You can select to have
transfers made on a monthly, quarterly, or annual basis. The transfer date will
be the same calendar day of the month as the contract date, but not later than
the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the
EQ/Alliance Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
------------------------------------
You may not elect general dollar cost averaging or 12 month dollar cost
averaging if you are participating in the rebalancing program. See
"Transferring your money among investment options."
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% (3% in Washington) roll up to age 80 guaranteed
22 Contract features and benefits
minimum death benefit. Your benefit base is not an account value or a cash
value. See "Our baseBUILDER option" and "Guaranteed minimum death benefit"
below. The benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money").
The effective annual interest rate credited to the benefit base is:
o 5% (3% in Washington) for the benefit base with respect to the variable
investment options (other than the AXA Premier VIP Core Bond, EQ/Alliance
Intermediate Government Securities, EQ/Alliance Money Market and
EQ/Alliance Quality Bond options), and the 12 month dollar cost averaging
program; and
o 3% for the benefit base with respect to the AXA Premier VIP Core Bond,
EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market
and EQ/Alliance Quality Bond options, the fixed maturity options and the
loan reserve account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract date anniversary
following the annuitant's 80th birthday.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our baseBUILDER
option" and annuity payout options are discussed in "Accessing your money"
later in this Prospectus. The guaranteed annuity purchase factors are those
factors specified in your contract. The current annuity purchase factors are
those factors that are in effect at any given time. Annuity purchase factors
are based on interest rates, mortality tables, frequency of payments, the form
of annuity benefit and the annuitant's (and any joint annuitant's) age and sex
in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses" later in this Prospectus.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability. You choose which of these payout options you want and
whether you want the option to be paid on a single or joint life basis at the
time you exercise your guaranteed minimum income benefit. The maximum period
certain available under the Income Manager payout option is 10 years. This
period may be shorter, depending on the annuitant's age when you exercise your
guaranteed minimum income benefit and the type of contract you own. We may also
make other forms of payout options available. For a description of payout
options, see "Your annuity payout options" in "Accessing your money" later in
this Prospectus.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base less any outstanding loan plus accrued interest
(applies to Rollover TSA only) at guaranteed annuity purchase factors, or (ii)
the income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive the annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the annuitant's (or joint annuitant's, if
applicable) death. There is no continuation of benefits following the
annuitant's (or joint annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT The table below illustrates
the guaranteed minimum income benefit amounts per $100,000 of initial
contribution, for a male annuitant age 60 (at issue) on the contract date
anniversaries indicated, who has elected the life annuity fixed payout option,
using the guaranteed annuity purchase factors as of the date of this
prospectus, assuming no additional contributions, withdrawals, or loans under
Rollover TSA contracts, and assuming there were no allocations to the AXA
Premier VIP Core Bond, EQ/Alliance Intermediate Government Securities,
EQ/Alliance Money Market or EQ/Alliance Quality Bond options, the fixed
maturity
Contract features and benefits 23
options or the loan reserve account.
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GUARANTEED MINIMUM INCOME
CONTRACT DATE ANNIVERSARY AT BENEFIT -- ANNUAL INCOME
EXERCISE PAYABLE FOR LIFE
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10 $10,816
15 $16,132
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise
the benefit. You will begin receiving payments one payment period after the
annuity payout contract is issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
after the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 85th birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 at the time an IRA, QP or
Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can be
exercised; and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you don't elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% (3% in Washington) roll up to age 80" or the
"annual ratchet to age 80" guaranteed minimum death benefit when you apply for
a contract. Once you have made your election, you may not change it.
5% (3% IN WASHINGTON) ROLL UP TO AGE 80. This guaranteed minimum death benefit
is equal to the benefit base described earlier in "Your benefit base," and is
subject to state availability.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum
death benefit to equal your account value. On the other hand, if your account
value on the contract date anniversary is less than your guaranteed minimum
death benefit, we will not adjust your guaranteed minimum death benefit either
up or down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on
the date the contribution is allocated to your investment options.
If you take a withdrawal from your contract, we will reduce your guaranteed
minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix IV at the end of this Prospectus for an example of how we
calculate the guaranteed minimum death benefit.
PROTECTION PLUS
Subject to state and contract availability, if you are purchasing a contract
under which the Protection Plus feature is available, you may elect the
Protection Plus death benefit at the time you purchase your
24 Contract features and benefits
contract. Protection Plus provides an additional death benefit as described
below. See the appropriate part of "Tax information" later in this Prospectus
and in the SAI for the potential tax consequences of electing to purchase the
Protection Plus feature in an NQ or IRA contract.
If the annuitant is 69 or younger when we issue your contract (or if the
successor owner/annuitant is 69 or younger when he or she becomes the successor
owner/annuitant, the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
40% of the lesser of:
o the total net contributions or
o the death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals,
including surrender charges and loans. Reduction on a pro rata basis means that
we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
If the annuitant is age 70 through 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 70 and 75 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
25% of the lesser of:
o the total net contributions (as described above) or
o the death benefit (as described above) less total net contributions
Protection Plus must be elected when the contract is first issued: neither the
owner nor the successor/owner annuitant can add it subsequently. Ask your
financial professional if this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), and (ii) any positive or negative market
value adjustments in the fixed maturity options through the date we receive
your contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) or (ii) above). For any IRA contract returned
to us within seven days after you receive it, we are required to refund the
full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your financial professional, can provide you with the
cancellation instructions.
Contract features and benefits 25
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applies for Rollover TSA
contracts only). These amounts are subject to certain fees and charges
discussed under "Charges and expenses" later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value less the amount
of any outstanding loan plus accrued interest (applicable to Rollover TSA
contracts only). Please see "Surrendering your contract to receive its cash
value" in "Accessing your money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal;
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge and/or the
Protection Plus benefit charge, the number of units credited to your contract
will be reduced. A description of how unit values are calculated is found in
the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
26 Determining your contract's value
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately
following the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Select(SM) contract is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and their life
insurance policies that we believe are under common ownership, control or
direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis).
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be cancelled in writing. There is no charge for the rebalancing
feature.
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging or 12 month dollar cost averaging program.
Rebalancing is not available for amounts you have allocated in the fixed
maturity options.
Transferring your money among investment options 27
4. Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
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METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------------
LIFETIME
REQUIRED
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------------
NQ Yes Yes No No
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Rollover IRA Yes Yes Yes Yes
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Roth
Conversion
IRA Yes Yes Yes No
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QP Yes No No Yes
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Rollover
TSA* Yes Yes No Yes
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*For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal restriction
information when you apply for a contract. See "Tax Sheltered Annuity contracts
(TSAs)" in "Tax information" later in this Prospectus and in the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Under Rollover TSA contracts, if a loan is outstanding, you may only take lump
sum withdrawals as long as the cash value remaining after any withdrawal equals
at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions.)
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, the amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP and Rollover TSA contracts only -- See "Tax information" later
in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the
28 Accessing your money
method you want us to use to calculate your minimum distribution withdrawals
from the choices we offer. Currently, minimum distribution withdrawal payments
will be made annually. See the "Required minimum distributions" section in "Tax
information" later in this Prospectus and in the SAI for your specific type of
retirement arrangement.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
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For Rollover IRA, QP and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR
ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options. If those amounts are insufficient,
we will deduct all or a portion of the charge from amounts in the 12 month
dollar cost averaging program.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% (3% in Washington) roll up to age 80 -- If you elect the 5% roll up to age
80 guaranteed minimum death benefit, your benefit base will be reduced on a
dollar-for-dollar basis as long as the sum of your withdrawals in a contract
year is 5% or less of the benefit base on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the benefit base on the most recent contract
date anniversary, that withdrawal and any subsequent withdrawals in that same
contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
benefit base and current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 85 -- If your contract was issued when the
annuitant was between ages 80 and 85, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any
Accessing your money 29
additional amount of the loan will be subtracted from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS
CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw and, upon surrender, payment of the cash value. We may postpone such
payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Select(SM) offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option" earlier in this
Prospectus).
- --------------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
- --------------------------------------------------------------------------------
Variable Immediate Annuity payout Life annuity (not available in
options New York)
Life annuity with period certain
- --------------------------------------------------------------------------------
Income Manager payout options Life annuity with period certain
(available for annuitants age 83 Period certain annuity
or less at contract issue)
- --------------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain of 10 years is the form of annuity under the contracts
that you will receive if you do not elect a different payout option. In
this case, the period certain will be based on the annuitant's age and
will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide details.
30 Accessing your money
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers
a fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only).
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as the owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Select(SM) contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator(R) Select(SM). For the tax consequences of withdrawals, see "Tax
information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose and the timing of your purchase as it relates
to any market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Select(SM) contract date.
Except with respect to the Income Manager annuity payout options, where
payments are made on the 15th day of each month, you can change the date your
annuity payments are to begin anytime before that date as long as you do not
choose a date later than the 28th day of any month.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
- --------------------------------------------------------------------------------
MAXIMUM
ISSUE AGE ANNUITIZATION AGE
- --------------------------------------------------------------------------------
0-75 85
76 86
77 87
78-80 88
81-85 90
- --------------------------------------------------------------------------------
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
Accessing your money 31
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o A charge for baseBUILDER, if you elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
o A charge for Protection Plus, if you elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities, with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.35% of the net assets in each
variable investment option.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85, whichever occurs
first. The charge is equal to 0.30% of the benefit base in effect on the
contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in order of the earliest maturity date(s) first, and then,
from amounts in the 12 month dollar cost averaging program. A market value
adjustment may apply.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.20% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment options on a
pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in the order of the earliest maturity date(s) first, and
then, from the account for 12 month dollar cost averaging. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (the rate is
1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION
ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
32 Charges and expenses
o Management fees ranging from 0.25% to 1.20%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this Prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the mortality and
expense risks charge or change the minimum initial contribution requirements.
We also may change the guaranteed minimum income benefit and the guaranteed
minimum death benefit or offer variable investment options that invest in
shares of either Trust that are not subject to the 12b-1 fee. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
Charges and expenses 33
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) and any amount applicable under the Protection Plus feature, as
of the date we receive satisfactory proof of the annuitant's death, any
required instructions for the method of payment, information and forms
necessary to effect payment. The amount of the guaranteed minimum death benefit
will be the guaranteed minimum death benefit as of the date of the annuitant's
death, adjusted for any subsequent withdrawals. Under Rollover TSA contracts we
will deduct the amount of any outstanding loan plus accrued interest from the
amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive the death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (new
owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will
pay any cash value five years after your death (or the death of the first
owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor owner/annuitant
feature, we will increase the account value to equal your guaranteed minimum
death benefit as of the date of your death if such death benefit is greater
than such account value, plus any amount applicable under the Protection Plus
feature and adjusted for any subsequent withdrawals. The increase in the
account value will be
34 Payment of death benefit
allocated to the investment options according to the allocation percentages we
have on file for your contract. In determining whether the guaranteed minimum
death benefit will continue to grow, we will use your surviving spouse's age
(as of the date we receive satisfactory proof of your death, any required
instructions and the information and forms necessary to effect the successor
owner/annuitant feature).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the guaranteed minimum
death benefit as of the date of your death, if such death benefit is greater
than such account value, plus any amount applicable under the Protection Plus
feature, and adjusted for any subsequent withdrawals. The beneficiary
continuation option is available if we have received regulatory clearance in
your state. Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in
effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions
for the method of payment and the information and forms necessary to
effect payment), unless such person elects to continue the payment method
elected by the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
Payment of death benefit 35
7. Tax information
- --------------------------------------------------------------------------------
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator(R) Select(SM) contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans.
In addition to increasing amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator Select's 12 Month Dollar Cost Averaging, choice
of death benefits, selection of investment funds and fixed maturity options and
its choices of pay-out options, as well as the features and benefits of other
permissible funding vehicles and the relative costs of annuities and other
arrangements. You should be aware that cost may vary depending on the features
and benefits made available and the charges and expenses of the investment
options or funds that you elect. See also Appendix II at the end of this
Prospectus for a discussion of QP contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
36 Tax information
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
annuitant's death, you may purchase a Protection Plus rider for your contract.
Although we regard this benefit as an investment protection feature which is
part of the contract and which should have no adverse tax effect, it is
possible that the IRS could take a contrary position or assert that the
Protection Plus rider is not part of the contract. In such a case, the charges
for the Protection Plus rider could be treated for federal income tax purposes
as a partial withdrawal from the contract. If this were so, such a deemed
withdrawal could be taxable and, for contract owners under age 59-1/2, also
subject to a tax penalty. Were the IRS to take this position, Equitable would
take all reasonable steps to attempt to avoid this result, which would include
amending the contract (with appropriate notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the NQ
contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Select(SM) NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis, also referred to as your investment on the contract, of the
source contract carries over to the Equitable Accumulator(R) Select(SM) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers and provision of cost basis
information may be required to process this type of exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
included in your gross income for federal income tax purposes. Incidents of
investment control could include among other items, the number of investment
options available under a contract and/or the frequency of transfers available
under the contract. In connection with the issuance of regulations concerning
investment diversification in 1986, the Treasury Department announced that the
diversification regulations did not provide guidance on investor control but
that guidance would be issued in the form of regulations or rulings. As of the
date of this prospectus, no such guidance has been issued. It is not known
whether such guidelines, if in fact issued, would have retroactive adverse
effect on existing contracts. We cannot provide assurance
Tax information 37
as to the terms or scope of any future guidance nor any assurance that such
guidance would not be imposed on a retroactive basis to contracts issued under
this prospectus. We reserve the right to modify the contract as necessary to
attempt to prevent you from being considered the owner of the assets of the
separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets funding the account for the benefit of the IRA owner. The assets
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account. In an
individual retirement annuity, an insurance company issues an annuity contract
that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http:// www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form.
The Equitable Accumulator(R) Select(SM) traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator(R) Select(SM) traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) SELECT(SM)
CONTRACT AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE PARAGRAPH
ABOVE, DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We have filed a
request with the IRS that the contract with the Protection Plus feature
qualifies as to form for use as a traditional IRA and Roth IRA, respectively.
THERE IS NO ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS
THE IRS QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may not invest in
life insurance contracts. Although we view the optional Protection Plus benefit
as an investment protection feature which should have no adverse tax effect and
not as life insurance, it is possible that the IRS could take a contrary
position regarding tax qualification or assert that the Protection Plus rider is
not a permissible part of an individual retirement annuity contract. We further
view the optional Protection Plus benefit as part of the contract. There is also
a risk that the IRS may take the position that the optional Protection Plus
benefit is not part of the annuity contract. In such a case, the charges for the
Protection Plus rider could be treated for federal income tax purposes as a
partial withdrawal from the contract. If this were so, such a deemed withdrawal
could be taxable, and for contract owners under age 59-1/2, also subject to a
tax penalty. Were the IRS to take any adverse position, Equitable would take all
reasonable steps to attempt to avoid any adverse result, which would include
amending the contract (with appropriate notice to you). YOU SHOULD DISCUSS WITH
YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER PURCHASING AN ACCUMULATOR(R)
SELECT(SM) IRA OR ACCUMULATOR(R) SELECT(SM) ROTH IRA WITH THE OPTIONAL
PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
38 Tax information
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA , surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally there are two types of funding vehicles available for 403(b)
arrangements--an annuity contract under Section 403(b)(1) of the Code or a
custodial account which invests only in mutual funds and which is treated as an
annuity contract under Section 403(b)(7) of the Code. Both types of 403(b)
arrangements qualify for tax deferral.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Select Rollover TSA contract:
o A rollover from another eligible retirement plan, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of
the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
Tax information 39
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) Select(SM) contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable(R) AccumulatorSM Select Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Select(SM) Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to the withdrawal restrictions may depend on the
source of the funds used to establish the Accumulator(R) Select(SM) TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation of service, if later. These rules are discussed in greater detail
in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If
40 Tax information
you do not have sufficient income tax withheld or do not make sufficient
estimated income tax payments, you may incur penalties under the estimated
income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional
IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution
is includable in your gross income. This may result in tax being withheld
even though the Roth IRA distribution is ultimately not taxable. You can
elect out of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However, we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age 70-1/2 or
retirement from service with the employer; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 for taxes. We
do not now, but may in the future set up reserves for such taxes.
Tax information 41
8. More information
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ABOUT OUR SEPARATE ACCOUNT NO. 45
Each variable investment option is a subaccount of our Separate Account No. 45.
We established Separate Account No. 45 in 1994 under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts. We are the legal owner of
all of the assets in Separate Account No. 45 and may withdraw any amounts that
exceed our reserves and other liabilities with respect to variable investment
options under our contracts. The results of Separate Account No. 45's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account No. 45 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 45.
Each subaccount (variable investment option) within Separate Account No. 45
invests solely in Class IB/B shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 45, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 45 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No.
45 or a variable investment option directly);
(5) to deregister Separate Account No. 45 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 45;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each Trust issues different
shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999, EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about each Trust, its portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan relating to its
Class IB/B shares and other aspects of its operations, appears in the
prospectuses for each Trust, which are attached at the end of this Prospectus,
or in the respective SAI's which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table are illustrative only
and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from their financial professional.
The rates to maturity for new allocations as of February 15, 2002, and the
related price per $100 of maturity value were as shown below:
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
WITH FEBRUARY 15TH
MATURITY DATE OF RATE TO MATURITY AS OF PRICE PER $100 OF
MATURITY YEAR FEBRUARY 15, 2002 MATURITY VALUE
- --------------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
2009 5.08% $ 70.67
2010 5.29% $ 66.19
2011 5.47% $ 61.90
2012 5.59% $ 58.03
- --------------------------------------------------------------------------------
42 More information
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based
on a 365-day year. For example, three years and 12 days becomes
3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. See Appendix III at the end of
this Prospectus for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account,
More information 43
money market account, or credit union checking account and contributed as an
additional contribution into an NQ contract on a monthly or quarterly basis.
AIP is not available for Rollover IRA, Roth Conversion IRA, QP or Rollover TSA
contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transactions requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity in
effect for that fixed maturity option on the business day of the transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for each Trust; or
o any other matters described in the prospectus for each Trust or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 45 VOTING RIGHTS
If actions relating to Separate Account No. 45 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
44 More information
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001 incorporated in this
prospectus by reference to the 2001 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI is
available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. Loans are not available
and you cannot assign Rollover IRA, Roth Conversion IRA and QP contracts as
security for a loan or other obligation. If the employer that provided the
funds does not restrict them, loans are available under a Rollover TSA
contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by AXA Advisors, LLC. For this purpose, AXA
Advisors, LLC serves as the principal underwriter of Separate Account No. 45.
The offering of the contracts is intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for sales and
marketing functions for contracts funded through Separate Account No. 45. AXA
Advisors also acts as distributor for other Equitable Life annuity products
with different features, expenses and fees. AXA Advisors is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
These contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
More information 45
9. Investment performance
- --------------------------------------------------------------------------------
The Table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the optional baseBUILDER benefits charge, and the charge for Protection Plus,
but does not reflect the charges designed to approximate certain taxes imposed
on us, such as premium taxes in your state or any applicable annuity
administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts were offered
for the first time in 2000.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985, reflect the results of the variable investment options that preceded
them. The "Since portfolio inception" figures for these options are based on
the date of inception of the preceding variable investment options. We have
adjusted these results to reflect the maximum investment advisory fee payable
for the portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. In each case,
the performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
46 Investment performance
TABLE FOR SEPARATE ACCOUNT 45
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
- ------------------------------------------------------------------------------------------------------
LENGTH OF OPTION PERIOD
-------------------------------------------
SINCE OPTION
VARIABLE INVESTMENT OPTIONS 1 YEAR 5 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock (26.45)% (5.23)% 1.76%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock (12.27)% 7.50% 11.79%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Global (21.63)% 1.73% 4.97%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income ( 3.23)% 11.74% 13.60%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors (14.12)% 5.09% 7.71%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities 6.04% 3.95% 4.08%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance International (24.62)% (4.93)% ( 1.60)%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market 1.80% 2.69% 2.70%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth (25.26)% -- (12.59)%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (14.72)% -- 7.13%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Technology (25.73)% -- (35.05)%
- ------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions (16.96)% -- (24.10)%
- ------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive (34.60)% -- (48.72)%
- ------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research ( 3.69)% -- 1.89%
- ------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity ( 3.68)% -- ( 0.16)%
- ------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity ( 6.78)% -- (10.05)%
- ------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index (13.66)% 7.73% 11.51%
- ------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega (18.43)% -- ( 8.92)%
- ------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap (14.89)% -- (11.16)%
- ------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value 2.22% -- 1.64%
- ------------------------------------------------------------------------------------------------------
EQ/High Yield ( 1.03)% (2.34)% 2.33%
- ------------------------------------------------------------------------------------------------------
EQ/International Equity Index (26.74)% -- ( 3.55)%
- ------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth (24.28)% -- (28.71)%
- ------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 3.73% -- 11.49%
- ------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (35.18)% -- 7.33%
- ------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (17.42)% -- ( 5.16)%
- ------------------------------------------------------------------------------------------------------
EQ/MFS Research (23.16)% -- 3.82%
- ------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value ( 8.40)% -- 3.33%
- ------------------------------------------------------------------------------------------------------
EQ/Small Company Index 0.31% -- 1.68%
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
LENGTH OF PORTFOLIO PERIOD
----------------------------------------------------
SINCE
PORTFOLIO
VARIABLE INVESTMENT OPTIONS 3 YEARS 5 YEARS 10 YEARS INCEPTION**
- ------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock (10.26)% (5.23)% 1.71% 9.83%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock ( 3.49)% 7.50% 10.22% 11.59%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Global ( 5.60)% 1.73% 6.18% 6.40%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income 6.02% 11.74% -- 11.02%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Growth Investors ( 1.14)% 5.09% 6.58% 9.60%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities 3.32% 3.95% 3.46% 4.16%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance International ( 8.66)% (4.93)% -- ( 1.40)%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market 2.62% 2.69% 2.19% 4.19%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth -- -- -- (12.58)%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth 5.81% -- -- 7.13%
- ------------------------------------------------------------------------------------------------------
EQ/Alliance Technology -- -- -- (35.05)%
- ------------------------------------------------------------------------------------------------------
EQ/AXP New Dimensions -- -- -- (24.87)%
- ------------------------------------------------------------------------------------------------------
EQ/AXP Strategy Aggressive -- -- -- (49.47)%
- ------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research -- -- -- 1.89%
- ------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity -- -- -- ( 0.17)%
- ------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity 1.58% -- -- (11.54)%
- ------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index ( 3.64)% 7.73% -- 11.16%
- ------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega ( 8.92)% -- -- ( 8.92)%
- ------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap -- -- -- (11.84)%
- ------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value 1.52% -- -- 1.64%
- ------------------------------------------------------------------------------------------------------
EQ/High Yield ( 6.00)% (2.34)% 4.58% 4.93%
- ------------------------------------------------------------------------------------------------------
EQ/International Equity Index ( 9.71)% -- -- ( 3.55)%
- ------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth -- -- -- (29.21)%
- ------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity 9.72% -- -- 11.49%
- ------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies ( 4.33)% -- -- 7.33%
- ------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust ( 5.17)% -- -- ( 5.17)%
- ------------------------------------------------------------------------------------------------------
EQ/MFS Research ( 4.98)% -- -- 3.82%
- ------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value ( 2.65)% -- -- 3.33%
- ------------------------------------------------------------------------------------------------------
EQ/Small Company Index 3.84% -- -- 1.68
- ------------------------------------------------------------------------------------------------------
* The variable option inception dates are: EQ/Aggressive Stock, EQ/Alliance
Common Stock, EQ/Alliance Global, EQ/Alliance Growth and Income, EQ/Alliance
Growth Investors, EQ/Alliance Intermediate Government Securities, EQ/Alliance
International, EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High
Yield (May 1, 1995); EQ/Alliance Small Cap Growth, EQ/FI Small/Mid Cap Value,
EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth Companies, EQ/MFS
Research and EQ/Putnam Growth & Income Value (May 1, 1997); EQ/Emerging
Markets Equity (September 2, 1997); EQ/International Equity Index and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy
Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September 5, 2000);
EQ/Balanced and EQ/Bernstein Diversified Value (May 18, 2001); EQ/Calvert
Socially Responsible and EQ/Marsico Focus (September 4, 2001); AXA Premier
VIP Core Bond, AXA Premier VIP Health Care, AXA Premier VIP International
Equity, AXA Premier VIP Large Cap Core Equity, AXA Premier VIP Large Cap
Growth, AXA Premier VIP Large Cap Value, AXA Premier VIP Small/Mid Cap
Growth, AXA Premier VIP Small/Mid Cap Value, AXA Premier VIP Technology,
EQ/Alliance Quality Bond, EQ/Capital Guardian International, EQ/J.P. Morgan
Core Bond, EQ/Lazard Small Cap Value, EQ/Putnam International Equity and
EQ/Putnam Voyager (January 14, 2002). No performance information is provided
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market (July
13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986); EQ/High
Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987): EQ/Alliance
Growth Investors (October 2, 1989); EQ/Alliance Intermediate Government
Securities (April 1, 1991); EQ/Alliance Growth and Income and EQ/Alliance
Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1, 1994);
EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity and EQ/Putnam Voyager (May 1, 1997); EQ/Emerging Markets
Equity (August 20, 1997); EQ/Bernstein Diversified Value, EQ/International
Equity Index, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value and
EQ/Small Company Index (January 1, 1998); EQ/Evergreen Omega and EQ/MFS
Investors Trust (January 1, 1999); EQ/Alliance Premier Growth, EQ/Capital
Guardian International, EQ/Capital Guardian Research and EQ/Capital Guardian
U.S. Equity (May 1, 1999); EQ/Calvert Socially Responsible (September 1,
1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, EQ/FI Mid Cap and EQ/Janus Large Cap Growth (September
1, 2000); EQ/Marsico Focus (August 31, 2001); AXA Premier VIP Core Bond, AXA
Premier VIP Health Care, AXA Premier VIP International Equity, AXA Premier
VIP Large Cap Core Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP
Large Cap Value, AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP
Small/Mid Cap Value and AXA Premier VIP Technology (December 31, 2001). No
performance information is provided for portfolios and/or variable investment
options with inception dates after December 31, 2000.
Investment performance 47
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
Barron's Investment Management Weekly
- -----------------------------------------------------------------
Morningstar's Variable Money Management Letter
Annuity Sourcebook Investment Dealers Digest
- -----------------------------------------------------------------
Business Week National Underwriter
- -----------------------------------------------------------------
Forbes Pension & Investments
- -----------------------------------------------------------------
Fortune USA Today
- -----------------------------------------------------------------
Institutional Investor Investor's Business Daily
- -----------------------------------------------------------------
Money The New York Times
- -----------------------------------------------------------------
Kiplinger's Personal Finance The Wall Street Journal
- -----------------------------------------------------------------
Financial Planning The Los Angeles Times
- -----------------------------------------------------------------
Investment Adviser The Chicago Tribune
- -----------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the
portfolios, including the measurements that compare the performance to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper, the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts. Lipper data provide a more accurate picture than market benchmarks of
the Equitable Accumulator(R) Select(SM) performance relative to other variable
annuity products. The Lipper Survey contains two different universes, which
reflect different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
optional baseBUILDER benefits charge, and any charge designed to approximate
certain taxes imposed on us, such as premium taxes in your state. The yields
and effective yields for the EQ/Alliance Money Market option, when used for the
12 month dollar cost averaging program, assume that no contract charges are
deducted. For more information, see "Yield Information for the EQ/Alliance
Money Market Option, EQ/Alliance Quality Bond Option and EQ/High Yield Option"
in the SAI.
48 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2001, is considered to be a part of this prospectus because they are
incorporated by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act") will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 49
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Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 45 with the same daily asset charges of 1.70%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDING DECEMBER 31,
---------------------------------------------
2001
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 48.37
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE COMMON STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 198.52
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 4
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GLOBAL
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 26.57
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 7
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH AND INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 24.79
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 30
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH INVESTORS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 32.88
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 4
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 16.54
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 113
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.41
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE MONEY MARKET
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 26.60
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 93
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.05
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 14
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE SMALL CAP GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 14.04
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 21
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.90
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 4
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP NEW DIMENSIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.87
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/AXP STRATEGY AGGRESSIVE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.06
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BALANCED
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 38.52
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 6
- ------------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDING DECEMBER 31,
----------------------------------------------
2001
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BERNSTEIN DIVERSIFIED VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.73
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 36
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY RESPONSIBLE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.60
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.62
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN U.S. EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.06
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EMERGING MARKETS EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.02
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 23.74
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN OMEGA
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.64
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI MID CAP
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.50
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 37
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI SMALL/MID CAP VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.02
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 11
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/HIGH YIELD
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 22.51
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 14
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/INTERNATIONAL EQUITY INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.78
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 2
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/JANUS LARGE CAP GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.35
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 8
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MARSICO FOCUS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.33
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MERCURY BASIC VALUE EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 16.92
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 15
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS EMERGING GROWTH COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 14.13
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 3
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS INVESTORS TRUST
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.62
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.12
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ------------------------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDING DECEMBER 31,
---------------------------------------------
2001
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & Income Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.88
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 9
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/SMALL COMPANY INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.86
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/T. ROWE PRICE INTERNATIONAL STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.67
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 5
- ------------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-3
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Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Select(SM) QP contract should discuss with their tax advisers whether this is an
appropriate investment vehicle for the employer's plan. Trustees should
consider whether the plan provisions permit the investment of plan assets in
the QP contract, the distribution of such an annuity, the purchase of the
guaranteed minimum income benefit and the payment of death benefits in
accordance with the requirements of the federal income tax rules. The QP
contract and this prospectus should be reviewed in full, and the following
factors, among others, should be noted. Assuming continued plan qualification
and operation, earnings on qualified plan assets will accumulate value on a
tax-deferred basis even if the plan is not funded by the Equitable
Accumulator(R) Select(SM) QP contract or another annuity. Therefore, you should
purchase an Equitable Accumulator(R) Select(SM) QP contract to fund a plan for
the contract's features and benefits other than tax deferral, after considering
the relative costs and benefits of annuity contracts and other types of
arrangements and funding vehicles. This QP contract accepts transfer
contributions only and not regular, ongoing payroll contributions. For 401(k)
plans under defined contribution plans, no employee after-tax contributions are
accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A market value
adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70-1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 601/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
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Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,846 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- -----------------------------------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED RATE TO MATURITY ON FEBRUARY 15, 2007
5.00% 9.00%
--------------------------------------------------------------
AS OF FEBRUARY 15, 2007 (BEFORE WITHDRAWAL)
- -----------------------------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- -----------------------------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- -----------------------------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- -----------------------------------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2007 (AFTER WITHDRAWAL)
- -----------------------------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- -----------------------------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,499 $ 54,851
- -----------------------------------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- -----------------------------------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- -----------------------------------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- -----------------------------------------------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
Appendix III: Market value adjustment example C-1
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Appendix IV: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market or EQ/Alliance Quality Bond
options or the fixed maturity options), no additional contributions, no
transfers, no withdrawals and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
- --------------------------------------------------------------------------------------------------------------------------
5% ROLL UP TO AGE 80 GUARANTEED ANNUAL RATCHET TO AGE 80 GUARANTEED
END OF CONTRACT YEAR ACCOUNT VALUE MINIMUM DEATH BENEFIT(1) MINIMUM DEATH BENEFIT
- --------------------------------------------------------------------------------------------------------------------------
1 $105,000 $105,000(1) $105,000(3)
- ----------------------------------------------------------------------------------------------------------------------
2 $115,500 $110,250(2) $115,500(3)
- ----------------------------------------------------------------------------------------------------------------------
3 $129,360 $115,763(2) $129,360(3)
- ----------------------------------------------------------------------------------------------------------------------
4 $103,488 $121,551(1) $129,360(4)
- ----------------------------------------------------------------------------------------------------------------------
5 $113,837 $127,628(1) $129,360(4)
- ----------------------------------------------------------------------------------------------------------------------
6 $127,497 $134,010(1) $129,360(4)
- ----------------------------------------------------------------------------------------------------------------------
7 $127,497 $140,710(1) $129,360(4)
- --------------------------------------------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80*
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the guaranteed minimum death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current guaranteed minimum death
benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is the guaranteed minimum death benefit at the end of the prior
year since it is equal to or higher than the current account value.
* If your contract is issued in the state of Washington, the applicable
crediting rate would be 3%, and, therefore, the values shown would be lower.
Appendix IV: Guaranteed minimum death benefit example D-1
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Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option 23
Distribution of the contracts 24
Financial Statements 25
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR(R) SELECT(SM) STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 45
Send this request form to:
Equitable Accumulator(R) Select(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator(R) Select(SM) SAI dated May 1, 2002.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
IM 4ACS SAI (5/02)
Equitable Accumulator(R) Select(SM) II
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2002
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectuses for each Trust, which contain important
information about their portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR(R) SELECT(SM) II?
Equitable Accumulator(R) Select(SM) II is a deferred annuity contract issued by
The Equitable Life Assurance Society of the United States. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
There is no withdrawal charge under the contract. However, we deduct a
distribution charge calculated as a percentage of the amounts in the variable
investment options. We deduct this charge for the life of the contract. This
contract may not currently be available in all states.
Variable investment options
o AXA Premier VIP Core Bond* o EQ/Balanced
o AXA Premier VIP Health Care* o EQ/Bernstein Diversified Value
o AXA Premier VIP International Equity* o EQ/Calvert Socially Responsible*
o AXA Premier VIP Large Cap Core o EQ/Capital Guardian International
Equity*
o EQ/Capital Guardian Research
o AXA Premier VIP Large Cap Growth*
o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP Large Cap Value* o EQ/Emerging Markets Equity
o AXA Premier VIP Small/Mid Cap o EQ/Equity 500 Index
Growth*
o EQ/Evergreen Omega
o AXA Premier VIP Small/Mid Cap Value*
o EQ/FI Mid Cap
o AXA Premier VIP Technology*
o EQ/FI Small/Mid Cap Value
o EQ/Aggressive Stock
o EQ/High Yield(1)
o EQ/Alliance Common Stock
o EQ/International Equity Index
o EQ/Alliance Global
o EQ/J.P. Morgan Core Bond
o EQ/Alliance Growth and Income
o EQ/Janus Large Cap Growth
o EQ/Alliance Growth Investors
o EQ/Lazard Small Cap Value
o EQ/Alliance Intermediate Government
o EQ/Marsico Focus*
Securities*
o EQ/Mercury Basic Value Equity
o EQ/Alliance International
o EQ/MFS Emerging Growth Companies
o EQ/Alliance Money Market
o EQ/MFS Investors Trust
o EQ/Alliance Premier Growth
o EQ/MFS Research
o EQ/Alliance Quality Bond
o EQ/Putnam Growth & Income Value
o EQ/Alliance Small Cap Growth
o EQ/Putnam International Equity
o EQ/Alliance Technology
o EQ/Putnam Voyager(2)
o EQ/AXP New Dimensions**
o EQ/Small Company Index
o EQ/AXP Strategy Aggressive**
* Subject to state availability.
** Subject to shareholder approval, we anticipate that the EQ/AXP New
Dimensions and the EQ/AXP Strategy Aggressive investment options (the
"replaced options") will be merged into the EQ/Capital Guardian U.S. Equity
and the EQ/Alliance Small Cap Growth investment options (the "surviving
options"), respectively, on or about July 12, 2002. After the merger, the
replaced options will no longer be available and any allocation elections
to either of them will be considered as allocation elections to the
applicable surviving option. We will notify you if the replacements do not
take place.
(1) Formerly named, "EQ/Alliance High Yield."
(2) Formerly named, "EQ/Putnam Investors Growth."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"). Your
investment results in a variable investment option will depend on the
investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2002, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
The SEC has not approved or disapproved these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense. The contracts are not insured by the FDIC or any other
agency. They are not deposits or other obligations of any bank and are not bank
guaranteed. They are subject to investment risks and possible loss of
principal.
X00284/Mstr
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(R) SELECT(SM) II
- --------------------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator(R) Select(SM) II at a glance -- key features 8
- --------------------------------------------------------------------------------
FEE TABLE 10
- --------------------------------------------------------------------------------
Examples 13
Condensed financial information 14
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 15
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 21
Your benefit base 23
Annuity purchase factors 23
Our baseBUILDER option 23
Guaranteed minimum death benefit 24
Your right to cancel within a certain number of days 25
- --------------------------------------------------------------------------------
2. DETERMINING YOUR CONTRACT'S VALUE 26
- --------------------------------------------------------------------------------
Your account value and cash value 26
Your contract's value in the variable investment options 26
Your contract's value in the fixed maturity options 26
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 27
- --------------------------------------------------------------------------------
Transferring your account value 27
Disruptive transfer activity 27
Rebalancing your account value 27
- ----------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
2 Contents of this prospectus
- --------------------------------------------------------------------------------
4. ACCESSING YOUR MONEY 28
- --------------------------------------------------------------------------------
Withdrawing your account value 28
How withdrawals are taken from your account value 29
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 29
Loans under Rollover TSA contracts 29
Surrendering your contract to receive its cash value 30
When to expect payments 30
Your annuity payout options 30
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 32
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 32
Charges that the Trusts deduct 32
Group or sponsored arrangements 33
Other distribution arrangements 33
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 34
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 34
How death benefit payment is made 34
Beneficiary continuation option 35
- --------------------------------------------------------------------------------
7. TAX INFORMATION 36
- --------------------------------------------------------------------------------
Overview 36
Buying a contract to fund a retirement arrangement 36
Transfers among investment options 36
Taxation of nonqualified annuities 36
Individual retirement arrangements (IRAs) 38
Special rules for contracts funding qualified plans 39
Tax-Sheltered Annuity contracts (TSAs) 39
Federal and state income tax withholding and
information reporting 40
Impact of taxes to Equitable Life 41
- --------------------------------------------------------------------------------
8. MORE INFORMATION 42
- --------------------------------------------------------------------------------
About Separate Account No. 49 42
About the Trusts 42
About our fixed maturity options 42
About the general account 43
About other methods of payment 44
Dates and prices at which contract events occur 44
About your voting rights 44
About legal proceedings 45
About our independent accountants 45
Financial statements 45
Transfers of ownership, collateral assignments, loans
and borrowing 45
Distribution of the contracts 45
- --------------------------------------------------------------------------------
9. INVESTMENT PERFORMANCE 47
- --------------------------------------------------------------------------------
Communicating performance data 50
- --------------------------------------------------------------------------------
10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 51
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
Table of contents
- --------------------------------------------------------------------------------
Contents of this prospectus 3
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
Page in
Term Prospectus
account value 26
annuitant 15
annuity payout options 30
annuity purchase factors 23
baseBUILDER 23
beneficiary 34
benefit base 23
business day 44
cash value 26
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 38
regular contributions 38
rollovers and direct transfers 38
conversion contributions 39
contributions to traditional IRAs 38
regular contributions 38
rollovers and transfers 38
disruptive transfer activity 27
EQAccess 6
ERISA 29
fixed maturity options 21
guaranteed minimum death benefit 24
guaranteed minimum income benefit 23
IRA cover
Page in
Term Prospectus
IRS 36
investment options 17
loan reserve account 29
market adjusted amount 21
market timing 27
market value adjustment 21
maturity value 21
NQ cover
participant 17
portfolio cover
processing office 6
QP cover
rate to maturity 21
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 38
SAI cover
SEC cover
TOPS 6
Trusts cover
TSA 39
traditional IRA 38
unit 26
variable investment options 17
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your registered representative can provide further explanation about
your contract or supplemental materials.
- -----------------------------------------------------------------------------
Prospectus Contract or Supplemental Materials
- -----------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest Accounts
in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
4 Index of key words and phrases
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
- ---------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL
- ---------------------------------------------------------
Equitable Accumulator(R) Select(SM) II
P.O. Box 13014
Newark, NJ 07188-0014
- ---------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY
- ---------------------------------------------------------
Equitable Accumulator(R) Select(SM) II
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- ---------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR
MAIL
- ---------------------------------------------------------
Equitable Accumulator(R) Select(SM) II
P.O. Box 1547
Secaucus, NJ 07096-1547
- ---------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANS-
FERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY
- ---------------------------------------------------------
Equitable Accumulator(R) Select(SM) II
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- ---------------------------------------------------------
REPORTS WE PROVIDE:
- ---------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
- ---------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
- ---------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options (not available through
EQAccess);
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http:// www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith, or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
- ---------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- ---------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your registered representative;
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
6 Who is Equitable Life?
(7) requests for withdrawals or surrenders from Rollover TSA
contracts;
(8) tax withholding elections;
(9) election of the beneficiary continuation option;
(10) IRA contribution recharacterizations;
(11) certain section 1035 exchanges; and
(12) direct transfers.
- ---------------------------------------------------------
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND
YOU USE FOR THE FOLLOWING TYPES OF REQUESTS:
- ---------------------------------------------------------
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) contract surrender and withdrawal requests; and
(5) death claims.
- ---------------------------------------------------------
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE
REQUIRE WRITTEN NOTIFICATION GENERALLY AT LEAST
SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED
TRANSACTION:
- ---------------------------------------------------------
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) 12 month dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners all must sign.
Who is Equitable Life? 7
Equitable Accumulator(R) Select(SM) II at a glance -- key features
- --------------------------------------------------------------------------------
Professional investment Equitable Accumulator(R) Select(SM) II's variable investment options invest in different portfolios
management managed by professional investment advisers.
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed maturity options o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years (subject to
availability).
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any value
that you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
- -----------------------------------------------------------------------------------------------------------------------------------
Tax advantages o On earnings inside the No tax until you make withdrawals from your contract or receive annuity
contract payments.
o On transfers inside the No tax on transfers among investment options.
contract
If you are purchasing an annuity contract as an Individual Retirement Annuity (IRA), you should be
aware that such annuities do not provide tax deferral benefits beyond those already provided by the
Internal Revenue Code.
Before purchasing one of these annuities, you should consider whether its features and benefits
beyond tax deferral meet your needs and goals. You may also want to consider the relative features,
benefits and costs of these annuities compared with any other investment that you may use in connection
with your retirement plan or arrangement. (For more information, see "Tax information," later in this
Prospectus and in the SAI.)
- -----------------------------------------------------------------------------------------------------------------------------------
baseBUILDER(R) protection baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum death benefit
provided under the contract. The guaranteed minimum income benefit provides income protection for you
while the annuitant lives. The guaranteed minimum death benefit provides a death benefit for the
beneficiary should the annuitant die.
- -----------------------------------------------------------------------------------------------------------------------------------
Contribution amounts o Initial minimum: $25,000
$ 1,000
o Additional minimum: $100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
Maximum contribution limitations may apply.
- -----------------------------------------------------------------------------------------------------------------------------------
Access to your money o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur income tax and a tax penalty.
- -----------------------------------------------------------------------------------------------------------------------------------
Payout options o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- -----------------------------------------------------------------------------------------------------------------------------------
Additional features o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Free transfers
o Protection Plus, an optional death benefit available under certain contracts (subject to state
availability)
8 Equitable Accumulator(R) Select(SM) II at a glance -- key features
Fees and charges o Daily charges on amounts invested in the variable investment options for mortality and expense risks,
administrative charges and distribution charges at an annual rate of 1.90%.
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout option or the contract date anniversary after the
annuitant reaches age 85, whichever occurs first. The benefit base is described under "Your benefit
base" in "Contract features and benefits," later in this Prospectus. If you don't elect baseBUILDER, you
still receive a guaranteed minimum death benefit under your contract at no additional charge.
o Annual 0.20% Protection Plus charge for this optional death benefit.
o No sales charge deducted at the time you make contributions, no withdrawal charge and no annual contract
fee.
--------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we receive the
properly completed and signed application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The end of each 12-month
period is your "contract date anniversary."
--------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. This charge is generally deducted from the amount applied to an annuity payout
option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of the Trusts' portfolios are calculated as a percentage of the average daily net assets
invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses.
- ------------------------------------------------------------------------------------------------------------------------------
Annuitant issue ages NQ: 0-85
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-85
QP: 20-75
- ------------------------------------------------------------------------------------------------------------------------------
The above is not a complete description of all material provisions of the
contract. In some cases, restrictions or exceptions apply. Also, all features
of the contract are not necessarily available in your state or at certain ages.
For more detailed information, we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
Other contracts
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, credits, fees and/or charges that are
different from those in the contracts offered by this prospectus. Not every
contract is offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
Equitable Accumulator(R) Select(SM) II at a glance -- key features 9
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this Prospectus.
The fixed maturity options and the 12 month dollar cost averaging account are
not covered by the fee table and examples. A market value adjustment (up or
down) may apply as a result of a withdrawal, transfer or surrender of amounts
from a fixed maturity option.
- ------------------------------------------------------------------------------------------------------
Charges we deduct from your variable investment options expressed as an annual percentage of daily
net assets
- ------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%
Administrative 0.35%
Distribution 0.45%
----
Total annual expenses 1.90%
- ------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- ------------------------------------------------------------------------------------------------------
Charge if you elect a Variable Immediate Annuity payout option $350
- ------------------------------------------------------------------------------------------------------
Charges we deduct from your account value each year if you elect the optional benefit
- ------------------------------------------------------------------------------------------------------
baseBUILDER benefit charge (calculated as a percentage of the benefit base. Deducted annu-
ally on each contract date anniversary)(2) 0.30%
- ------------------------------------------------------------------------------------------------------
Protection Plus benefit charge (calculated as a percentage of the account value. Deducted
annually on each contract date anniversary) 0.20%
- ------------------------------------------------------------------------------------------------------
10 Fee table
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
Net
total annual
Management Fees Other expenses expenses (After
(After expense (After expense expense
Portfolio Name limitation)(3) 12b-1 Fees(4) limitation)(5) limitation)(6)
AXA PREMIER VIP TRUST:
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- ------------------------------------------------ ---- ---- ---- ----
EQ ADVISORS TRUST:
- ------------------------------------------------ ---- ---- ---- ----
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian U.S. Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) The benefit base is described under "Your guaranteed minimum income benefit
under baseBUILDER" in "Contract features and benefits" later in this
Prospectus.
(3) The management fees shown for each portfolio cannot be increased without a
vote of each portfolio's shareholders. See footnote (6) for any expense
limitation agreement information.
Fee table 11
(4) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Initial seed capital was invested for the Portfolios
on December 31, 2001, thus, "Other Expenses" shown are estimated. See
footnote (6) for any expense limitation agreement information.
(6) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures, and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
AXA PREMIER VIP TRUST:
- ----------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
EQ ADVISORS TRUST:
- ----------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian U.S. Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
12 Fee table
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has elected baseBUILDER with a 5% roll up to age 80 or annual ratchet to age 80
guaranteed minimum death benefit and Protection Plus) would pay in the
situation illustrated. We assume that a $1,000 contribution is invested in one
of the variable investment options listed and a 5% annual return is earned on
the assets in that option.(1) Since the Protection Plus feature is only
available under certain contracts expenses would be lower for contracts that do
not have this feature.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of the Trusts in the table, above, for the
entire one, three, five and ten year periods included in the examples.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
At the end of each period shown,
the expenses would be:
1 year 3 years 5 years 10 years
AXA Premier VIP Core Bond $ 32.03 $ 103.96 $ 178.49 $ 376.72
AXA Premier VIP Health Care $ 41.48 $ 131.55 $ 223.14 $ 458.87
AXA Premier VIP International Equity $ 40.95 $ 130.03 $ 220.70 $ 454.51
AXA Premier VIP Large Cap Core Equity $ 36.23 $ 116.29 $ 198.55 $ 414.19
AXA Premier VIP Large Cap Growth $ 36.23 $ 116.29 $ 198.55 $ 414.19
AXA Premier VIP Large Cap Value $ 36.23 $ 116.29 $ 198.55 $ 414.19
AXA Premier VIP Small/Mid Cap Growth $ 38.85 $ 123.94 $ 210.91 $ 436.82
AXA Premier VIP Small/Mid Cap Value $ 38.85 $ 123.94 $ 210.91 $ 436.82
AXA Premier VIP Technology $ 41.48 $ 131.55 $ 223.14 $ 458.87
EQ/Aggressive Stock $ 31.92 $ 103.65 $ 177.98 $ 375.76
EQ/Alliance Common Stock $ 30.24 $ 98.69 $ 169.85 $ 360.32
EQ/Alliance Global $ 33.60 $ 108.60 $ 186.05 $ 390.95
EQ/Alliance Growth and Income $ 31.29 $ 101.79 $ 174.94 $ 370.00
EQ/Alliance Growth Investors $ 31.29 $ 101.79 $ 174.94 $ 370.00
EQ/Alliance Intermediate Government Securities $ 31.19 $ 101.48 $ 174.43 $ 369.04
EQ/Alliance International $ 36.23 $ 116.29 $ 198.55 $ 414.19
EQ/Alliance Money Market $ 28.88 $ 94.65 $ 163.21 $ 347.58
EQ/Alliance Premier Growth $ 34.13 $ 110.14 $ 188.56 $ 395.65
EQ/Alliance Quality Bond $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Alliance Small Cap Growth $ 33.18 $ 107.36 $ 184.04 $ 387.18
EQ/Alliance Technology $ 34.13 $ 110.14 $ 188.56 $ 395.65
EQ/AXP New Dimensions $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/AXP Strategy Aggressive $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/Balanced $ 31.50 $ 102.41 $ 175.95 $ 371.93
EQ/Bernstein Diversified Value $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Calvert Socially Responsible $ 33.07 $ 107.05 $ 183.53 $ 386.23
EQ/Capital Guardian International $ 34.65 $ 111.68 $ 191.07 $ 400.32
EQ/Capital Guardian Research $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Capital Guardian U.S. Equity $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Emerging Markets Equity $ 40.95 $ 130.03 $ 220.70 $ 454.51
EQ/Equity 500 Index $ 27.93 $ 91.84 $ 158.59 $ 338.67
EQ/Evergreen Omega $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/FI Mid Cap $ 32.55 $ 105.51 $ 181.01 $ 381.49
EQ/FI Small/Mid Cap Value $ 33.60 $ 108.60 $ 186.05 $ 390.95
EQ/High Yield $ 31.71 $ 103.03 $ 176.97 $ 373.85
EQ/International Equity Index $ 33.60 $ 108.60 $ 186.05 $ 390.95
EQ/J.P. Morgan Core Bond $ 30.45 $ 99.31 $ 170.87 $ 362.26
EQ/Janus Large Cap Growth $ 34.13 $ 110.14 $ 188.56 $ 395.65
EQ/Lazard Small Cap Value $ 33.60 $ 108.60 $ 186.05 $ 390.95
EQ/Marsico Focus $ 34.13 $ 110.14 $ 188.56 $ 395.65
EQ/Mercury Basic Value Equity $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/MFS Emerging Growth Companies $ 32.23 $ 104.58 $ 179.50 $ 378.63
EQ/MFS Investors Trust $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/MFS Research $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Putnam Growth & Income Value $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Putnam International Equity $ 35.18 $ 113.22 $ 193.57 $ 404.96
EQ/Putnam Voyager $ 32.03 $ 103.96 $ 178.49 $ 376.72
EQ/Small Company Index $ 30.98 $ 100.86 $ 173.42 $ 367.11
Fee table
13
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money," later
in this Prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $5.44 based on the average amount
applied to annuity payout options in 2001. See "Annuity administrative fee" in
"Charges and expenses," later in this Prospectus.
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2001.
14 Fee table
1. Contract features and benefits
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HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. All ages in the table refer
to the age of the annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Available
Contract for annuitant Limitations on
type issue ages Source of contributions contributions
- -----------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 85
o After-tax money. o No additional contributions after age 86
o Paid to us by check or transfer of contract
value in a tax-deferred exchange under
Section 1035 of the Internal Revenue Code.
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Rollover IRA 20 through 85 o Eligible rollover distributions from TSA con- o No rollover or direct transfer
tracts or other 403(b) arrangements, contributions after age 86.
qualified plans, and governmental EDC
plans. o Contributions after age 70-1/2 must be net of
required minimum distributions.
o Rollovers from another traditional individual
retirement arrangement. o Although we accept regular IRA
contributions (limited to $3,000 for the cal-
o Direct custodian-to-custodian transfers from endar year 2002) under Rollover IRA
another traditional individual retirement contracts, we intend that this contract be
arrangement. used primarily for rollover and direct
transfer contributions.
o Regular IRA contributions.
o Additional catch-up contributions totalling
o For the calendar year 2002 and later, addi- up to $500 can be made for the calendar
tional "catch-up" contributions. year 2002 where the owner is at least age
50 but under age 70-1/2 at any time during
2002.
- -----------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA contributions after age 86.
o Conversion rollovers from a traditional IRA.
o Conversion rollovers after age 70-1/2 must be
o Direct transfers from another Roth IRA. net of required minimum distributions for the
traditional IRA you are rolling over.
o Regular Roth IRA contributions.
o You cannot roll over funds from a traditional
o For the calendar year 2002 and later, addi- IRA if your adjusted gross income is
tional catch-up contributions. $100,000 or more.
o Although we accept regular Roth IRA contri-
butions (limited to $3,000 for the calendar
year 2002) under Roth IRA contracts, we intend
that this contract be used primarily for
rollover and direct transfer contributions.
o Additional catch-up contributions totalling
up to $500 can be made for the calendar
year 2002 where the owner is at least age
50 at any time during 2002.
Contract features and benefits 15
- ------------------------------------------------------------------------------------------------------------------------------------
Available
Contract for annuitant Limitations on
type issue ages Source of contributions contributions
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o Direct transfers of pre-tax funds from o No additional rollover or direct transfer con-
another contract or arrangement under tributions after age 86.
Section 403(b) of the Internal Revenue
Code, complying with IRS Revenue Ruling o Rollover or direct transfer contributions after
90-24. age 70-1/2 must be net of any required mini-
mum distributions.
o Eligible rollover distributions of pre-tax
funds from other 403(b) plans, qualified o Employer-remitted contributions are not
plans, governmental EDC plans and tradi- permitted.
tional IRAs.
QP 20 through 75 o Only transfer contributions from an existing o Regular ongoing payroll contributions are
qualified plan trust as a change of invest- not permitted.
ment vehicle under the plan.
o Only one additional transfer contribution
o The plan must be qualified under Section may be made during a contract year.
401(a) of the Internal Revenue Code.
o No additional transfer contributions after
o For 401(k) plans, transferred contributions age 76.
may only include employee pre-tax
contributions. o For defined benefit plans, employee contribu-
tions are not permitted and we will not
accept contributions that fund more than
80% of the actuarial value of the plan
participant/employee's normal retirement
benefit.
o Contributions after age 70-1/2 must
be net of any required minimum
distributions.
Please refer to Appendix II at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. We may refuse to accept any contribution if the sum of all
contributions under all Equitable Accumulator(R) Select(SM)II contracts with the
same annuitant would then total more than $1,500,000. We reserve the right to
limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation
contracts that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this Prospectus.
16 Contract features and benefits
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person. In some cases, an IRA contract may be held in a custodial
individual retirement account for the benefit of the individual annuitant.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II at the end of
this Prospectus for more information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We may also apply
contributions made pursuant to a 1035 tax-free exchange or a direct transfer.
We do not accept third-party checks endorsed to us except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to our ability to collect the funds. We reserve the right to
reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the registered representative
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
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Our "business day" is generally any day the New York Stock Exchange is open for
trading and generally ends at 4:00 p.m. Eastern Time. A business day does not
include a day we choose not to open due to emergency conditions. We may also
close early due to emergency conditions.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Alliance Money Market variable
investment option. Listed below are the currently available portfolios, their
investment objectives and their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options and the fixed
maturity options.
- --------------------------------------------------------------------------------
Contract features and benefits 17
Portfolios of the Trusts
You should note that some portfolios have objectives and strategies that are
substantially similar to those of certain funds that are purchased directly
rather than under a variable insurance product such as the Accumulator(R)
Select(SM) II. These portfolios may even have the same manager(s) and/or a
similar name. However, there are numerous factors that can contribute to
differences in performance between two investments, particularly over short
periods of time. Such factors include the timing of stock purchases and sales;
differences in fund cash flows; and specific strategies employed by the
portfolio manager.
- ---------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
Portfolio Name Objective
- ---------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond* Seeks a balance of a high current BlackRock Advisors, Inc.
income and capital Pacific Investment Management Company LLC
appreciation consistent with a
prudent level of risk
AXA Premier VIP Health Care* Long-term growth of capital AIM Capital Management, Inc.
Dresdner RCM Global Investors LLC
Wellington Management Company, LLP
AXA Premier VIP International Long-term growth of capital Alliance Capital Management L.P., through
Equity* its Bernstein Investment Research and
Management Unit
Bank of Ireland Asset Management (U.S.)
Limited
OppenheimerFunds, Inc.
AXA Premier VIP Large Cap Core Long-term growth of capital Alliance Capital Management L.P., through
Equity* its Bernstein Investment Research and
Management Unit
Janus Capital Management LLC
Thornburg Investment Management, Inc.
AXA Premier VIP Large Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* Dresdner RCM Global Investors LLC
TCW Investment Management Company
AXA Premier VIP Large Cap Value* Long-term growth of capital Alliance Capital Management L.P.
Institutional Capital Corporation
MFS Investment Management
AXA Premier VIP Small/Mid Cap Long-term growth of capital Alliance Capital Management L.P.
Growth* MFS Investment Management
RS Investment Management, L.P.
AXA Premier VIP Small/Mid Cap Long-term growth of capital AXA Rosenberg Investment Management LLC
Value* The Boston Company Asset Management, LLC
TCW Investment Management Company
AXA Premier VIP Technology* Long-term growth of capital Alliance Capital Management L.P.
Dresdner RCM Global Investors LLC
Firsthand Capital Management, Inc.
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EQ ADVISORS TRUST:
Portfolio Name Objective ADVISER(S)
- ---------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital Marsico Capital Management, LLC
MFS Investment Management
Provident Investment Counsel, Inc.
EQ/Alliance Common Stock Seeks to achieve long-term growth of Alliance Capital Management L.P.
capital and increased income
EQ/Alliance Global Seeks long-term growth of capital Alliance Capital Management L.P.
18 Contract features and benefits
Portfolios of the Trusts (continued)
- -----------------------------------------------------------------------------------------------------
Portfolio Name Objective
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Seeks to provide a high total return
EQ/Alliance Growth Investors Seeks to achieve the highest total return consistent with
the Adviser's determination of reasonable risk
EQ/Alliance Intermediate Seeks to achieve high current income consistent with
Government Securities* relative stability of principal
EQ/Alliance International Seeks long-term growth of capital
EQ/Alliance Money Market Seeks to obtain a high level of current income, preserve
its assets and maintain liquidity
EQ/Alliance Premier Growth Seeks long-term growth of capital
EQ/Alliance Quality Bond Seeks to achieve high current income consistent with
moderate risk of capital
EQ/Alliance Small Cap Growth Seeks to achieve long-term growth of capital
EQ/Alliance Technology Seeks to achieve growth of capital. Current income is
incidental to the Portfolio's objective
EQ/AXP New Dimensions Seeks long-term growth of capital
EQ/AXP Strategy Aggressive Seeks long-term growth of capital
EQ/Balanced Seeks to achieve a high return through both appreciation
of capital and current income
EQ/Bernstein Diversified Value Seeks capital appreciation
EQ/Calvert Socially Responsible* Seeks long-term capital appreciation
EQ/Capital Guardian International Seeks long-term growth of capital
EQ/Capital Guardian Research Seeks long-term growth of capital
EQ/Capital Guardian U.S. Equity Seeks long-term growth of capital
EQ/Emerging Markets Equity Seeks long-term capital appreciation
EQ/Equity 500 Index Seeks a total return before expenses that approximates
the total return performance of the S&P 500 Index,
including reinvestment of dividends, at a risk level consis-
tent with that of the S&P 500 Index
EQ/Evergreen Omega Seeks long-term capital growth
EQ/FI Mid Cap Seeks long-term growth of capital
EQ/FI Small/Mid Cap Value Seeks long-term capital appreciation
EQ/High Yield Seeks to achieve a high total return through a combina-
tion of current income and capital appreciation
- -----------------------------------------------------------------------------------------------------
Portfolio Name Adviser(s)
- -----------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income Alliance Capital Management L.P
EQ/Alliance Growth Investors Alliance Capital Management L.P.
EQ/Alliance Intermediate Alliance Capital Management L.P.
Government Securities*
EQ/Alliance International Alliance Capital Management L.P.
(including through its Bernstein Investment
Research and Management Unit)
EQ/Alliance Money Market Alliance Capital Management L.P.
EQ/Alliance Premier Growth Alliance Capital Management L.P.
EQ/Alliance Quality Bond Alliance Capital Management L.P.
EQ/Alliance Small Cap Growth Alliance Capital Management L.P.
EQ/Alliance Technology Alliance Capital Management L.P.
EQ/AXP New Dimensions American Express Financial Corporation
EQ/AXP Strategy Aggressive American Express Financial Corporation
EQ/Balanced Alliance Capital Management L.P.
Capital Guardian Trust Company
Jennison Associates LLC
Prudential Investments LLC
Mercury Advisors
EQ/Bernstein Diversified Value Alliance Capital Management L.P.,
through its Bernstein Investment Research and
Management Unit
EQ/Calvert Socially Responsible* Calvert Asset Management Company, Inc.
Brown Capital Management, Inc.
EQ/Capital Guardian International Capital Guardian Trust Company
EQ/Capital Guardian Research Capital Guardian Trust Company
EQ/Capital Guardian U.S. Equity Capital Guardian Trust Company
EQ/Emerging Markets Equity Morgan Stanley Investment Management
EQ/Equity 500 Index Alliance Capital Management L.P.
EQ/Evergreen Omega Evergreen Investment Management Company,
LLC
EQ/FI Mid Cap Fidelity Management & Research Company
EQ/FI Small/Mid Cap Value Fidelity Management & Research Company
EQ/High Yield Alliance Capital Management L.P.
Contract features and benefits 19
Portfolios of the Trusts (continued)
- -----------------------------------------------------------------------------------------------------
Portfolio Name Objective
- -----------------------------------------------------------------------------------------------------
EQ/International Equity Index Seeks to replicate as closely as possible (before deduc-
tion of Portfolio expenses) the total return of the MSCI
EAFE Index
EQ/J.P. Morgan Core Bond Seeks to provide a high total return consistent with mod-
erate risk of capital and maintenance of liquidity
EQ/Janus Large Cap Growth Seeks long-term growth of capital
EQ/Lazard Small Cap Value Seeks capital appreciation
EQ/Marsico Focus* Seeks to achieve long-term growth of capital
EQ/Mercury Basic Value Equity Seeks capital appreciation and secondarily, income
EQ/MFS Emerging Growth Seeks to provide long-term capital growth
Companies
EQ/MFS Investors Trust Seeks long-term growth of capital with a secondary
objective to seek reasonable current income
EQ/MFS Research Seeks to provide long-term growth of capital and future
income
EQ/Putnam Growth & Income Seeks capital growth. Current income is a secondary
Value objective
EQ/Putnam International Equity Seeks capital appreciation
EQ/Putnam Voyager Seeks long-term growth of capital and any increased
income that results from this growth
EQ/Small Company Index Seeks to replicate as closely as possible (before deduc-
tion of Portfolio expenses) the total return of the Russell
2000 Index
- -----------------------------------------------------------------------------------------------------
Portfolio Name Adviser(s)
- -----------------------------------------------------------------------------------------------------
EQ/International Equity Index Deutsche Asset Management Inc.
EQ/J.P. Morgan Core Bond J.P. Morgan Investment Management, Inc.
EQ/Janus Large Cap Growth Janus Capital Management LLC
EQ/Lazard Small Cap Value Lazard Asset Management
EQ/Marsico Focus* Marsico Capital Management, LLC
EQ/Mercury Basic Value Equity Mercury Advisors
EQ/MFS Emerging Growth MFS Investment Management
Companies
EQ/MFS Investors Trust MFS Investment Management
EQ/MFS Research MFS Investment Management
EQ/Putnam Growth & Income Putnam Investment Management, LLC
Value
EQ/Putnam International Equity Putnam Investment Management, LLC
EQ/Putnam Voyager Putnam Investment Management, LLC
EQ/Small Company Index Deutsche Asset Management Inc.
* Subject to state availability.
Other important information about the portfolios is included in the
prospectuses for each Trust attached at the end of this Prospectus.
20 Contract features and benefits
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in all states. Check with your registered representative to see
if fixed maturity options are available in your state.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
Prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2003 through
2012. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar year;
or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the next
available fixed maturity option with the earliest maturity date.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this Prospectus. Appendix III at the end of this Prospectus provides an example
of how the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value
Contract features and benefits 21
to equal the amount of your entire initial contribution on the fixed maturity
option's maturity date. The maturity date you select generally may not be later
than 10 years, or earlier than 7 years from your contract date. You allocate
the rest of your contribution to the variable investment options however you
choose.
For example, if your initial contribution is $25,000, and on February 15, 2002,
you chose the fixed maturity option with a maturity date of February 15, 2012,
since the rate to maturity was 5.59% on February 15, 2002, we would have
allocated $14,507.17 to that fixed maturity option and the balance to your
choice of variable investment options. On the maturity date your value in the
fixed maturity option would be $25,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70-1/2, you should consider whether
your value in the variable investment options or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information" later in this Prospectus and in the SAI.
Please check with your registered representative if the principal assurance
allocation feature is available in your state. Also, you may not elect
principal assurance if the 12 month dollar cost averaging program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. You may only participate in one
program at a time. Each program allows you to gradually transfer amounts from
the EQ/Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the other
variable investment options you select. This will cause you to purchase more
units if the unit value is low and fewer units if the unit value is high.
Therefore, you may get a lower average cost per unit over the long term. These
plans of investing, however, do not guarantee that you will earn a profit or be
protected against losses. You may not make transfers to the fixed maturity
options.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
12 MONTH DOLLAR COST AVERAGING PROGRAM. Subject to state availability, you may
dollar cost average from the EQ/Alliance Money Market option into any of the
other variable investment options. You may elect to participate in the 12 month
dollar cost averaging program at any time subject to the age limitation on
contributions described in Section 1 of this prospectus. Contributions into the
account for 12 month dollar cost averaging may not be transfers from other
investment options. You must allocate your entire initial contribution into the
EQ/Alliance Money Market option if you are selecting the 12 month dollar cost
averaging program at application to purchase an Accumulator(R) Select(SM) II
contract; thereafter your initial allocation to any 12 month dollar cost
averaging program time period must be at least $2,000 and any subsequent
contribution to that same time period must be at least $250. You may only have
one time period in effect at any time. We will transfer your value in the
EQ/Alliance Money Market option into the other variable investment options that
you select over the next 12 months or such other period we may offer. Once the
time period then in effect has run, you may then select to participate in the
dollar cost averaging program for an additional time period. At that time, you
may also select a different allocation for transfers to the variable investment
options, or, if you wish, we will continue to use the selection that you have
previously made.
Currently, the transfer date will be the same day of the month as the contract
date, but not later than the 28th. For a 12 month dollar cost averaging program
selected after application, the first transfer date and each subsequent
transfer date for the time period selected will be one month from the date the
first contribution is made into the 12 month dollar cost averaging program, but
not later than the 28th of the month. All amounts will be transferred out by
the end of the time period then in effect. Under this program we will not
deduct the mortality and expense risks, administrative, and distribution
charges from assets in the EQ/Alliance Money Market option.
You may not transfer amounts to the EQ/Alliance Money Market option established
for this program that are not part of the 12 month dollar cost averaging
program. The only amounts that should be transferred from the EQ/Alliance Money
Market option are your regularly scheduled transfers to the other variable
investment options. If you request to transfer or withdraw any other amounts
from the EQ/Alliance Money Market option, we will transfer all of the value
that you have remaining in the account for 12 month dollar cost averaging to
the investment options according to the allocation percentages we have on file
for you. You may ask us to cancel your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the EQ/Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options. You can select to have
transfers made on a monthly, quarterly, or annual basis. The transfer date will
be the same calendar day of the month as the contract date, but not later than
the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the
EQ/Alliance Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the EQ/Alliance Money Market option
at the time the program is elected, divided by the number of transfers
scheduled to be made.
If, on any transfer date, your value in the EQ/Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------
You may not elect general dollar cost averaging or 12 month dollar cost
averaging if you are participating in the rebalancing program. See
"Transferring your money among investment options" later in this Prospectus.
22 Contract features and benefits
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% (3% in Washington) roll up to age 80 guaranteed minimum death benefit.
Your benefit base is not an account value or a cash value. See "Our baseBUILDER
option" and "Guaranteed minimum death benefit" below. The benefit base is equal
to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your money"
later in this Prospectus).
The effective annual interest rate credited to the benefit base is:
o 5% (3% in Washington for purposes of calculating the guaranteed minimum death
benefit only) for the benefit base with respect to the variable investment
options (other than the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market and EQ/Alliance Quality Bond
options) and the 12 month dollar cost averaging program; and
o 3% for the benefit base with respect to the AXA Premier VIP Core Bond,
EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market and
EQ/Alliance Quality Bond options, the fixed maturity options and the loan
reserve account under Rollover TSA (if applicable).
No interest is credited to the benefit base after the contract date anniversary
following the annuitant's 80th birthday.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our baseBUILDER
option" and annuity payout options are discussed in "Accessing your money"
later in this prospectus. The guaranteed annuity purchase factors are those
factors specified in your contract. The current annuity purchase factors are
those factors that are in effect at any given time. Annuity purchase factors
are based on interest rates, mortality tables, frequency of payments, the form
of annuity benefit and the annuitant's (and any joint annuitant's) age and sex
in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses" later in this Prospectus.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability. You choose which of these payout options you want and
whether you want the option to be paid on a single or joint life basis at the
time you exercise your guaranteed minimum income benefit. The maximum period
certain available under the Income Manager payout option is 10 years. This
period may be shorter, depending on the annuitant's age when you exercise your
guaranteed minimum income benefit and the type of contract you own. We may also
make other forms of payout options available. For a description of payout
options, see "Your annuity payout options" in "Accessing your money" later in
this Prospectus.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base less any outstanding loan plus accrued interest
(applies to Rollover TSA only) at guaranteed annuity purchase factors, or (ii)
the income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the annuitant's (or joint annuitant's, if
applicable) death. There is no continuation of benefits following the
annuitant's (or joint annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below illustrates
the guaranteed minimum income benefit amounts per $100,000 of initial
contribution, for a male annuitant age 60 (at issue) on the contract date
anniversaries indicated, who has elected the life annuity fixed payout option,
using the guaranteed annuity purchase factors as of the date of this
prospectus, assuming no additional contributions, withdrawals or loans under
Rollover TSA contracts, and assuming there were no allocations to the AXA
Premier VIP Core
Contract features and benefits 23
Bond, EQ/Alliance Intermediate Government Securities, EQ/Alliance Money Market
or EQ/Alliance Quality Bond options, the fixed maturity options or the loan
reserve account.
Guaranteed minimum income
Contract date benefit -- annual income pay-
anniversary at exercise able for life
10 $10,816
15 $16,132
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise
the benefit. You will begin receiving payments one payment period after the
annuity payout contract is issued.
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary after
the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 85th birthday;
and
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 at the time an IRA, QP or
Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
generally must begin before the guaranteed minimum income benefit can be
exercised; and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in
such contract to a Rollover IRA contract. You will be the owner of the
Rollover IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you don't elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% (3% in Washington) roll up to age 80" or the
"annual ratchet to age 80" guaranteed minimum death benefit when you apply for
a contract. Once you have made your election, you may not change it.
5% (3% IN WASHINGTON) ROLL UP TO AGE 80. The guaranteed minimum death benefit
is equal to the benefit base described earlier in "Your benefit base," and is
subject to state availability.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum
death benefit to equal your account value. On the other hand, if your account
value on the contract date anniversary is less than your guaranteed minimum
death benefit, we will not adjust your guaranteed minimum death benefit either
up or down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on
the date the contribution is allocated to your investment options.
If you take a withdrawal from your contract, we will reduce your guaranteed
minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" later in this
Prospectus for information on how withdrawals affect your guaranteed minimum
death benefit.
See Appendix III at the end of this Prospectus for an example of how we
calculate the guaranteed minimum death benefit.
Protection Plus
Subject to state and contract availability, if you are purchasing a contract
under which the Protection Plus feature is available, you may
24 Contract features and benefits
elect the Protection Plus death benefit at the time you purchase your contract.
Protection Plus provides an additional death benefit as described below. See
the appropriate part of "Tax information" later in this Prospectus for the
potential tax consequences of electing to purchase the Protection Plus feature
in an NQ or IRA contract.
If the annuitant is 69 or younger when we issue your Contract (or if the
successor owner/annuitant is 69 or younger when he or she becomes the successor
owner/annuitant), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
40% of the lesser of:
o the total net contributions or
o the death benefit less total net contributions
For purposes of calculating your Protection Plus benefit, the following
applies: (i) "Net contributions" are the total contributions made (or, if
applicable, the total amount that would otherwise have been paid as a death
benefit had the successor owner/annuitant election not been made plus any
subsequent contributions) reduced on a pro rata basis to reflect withdrawals
(including surrender charges and loans). Reduction on a pro rata basis means
that we calculate the percentage of the current account value that is being
withdrawn and we reduce net contributions by that percentage. For example, if
the account value is $30,000 and you withdraw $12,000, you have withdrawn 40%
of your account value. If contributions aggregated $40,000 before the
withdrawal, it would be reduced by $16,000 ($40,000 x .40) and net
contributions after the withdrawal would be $24,000 ($40,000-$16,000); (ii)
"Death benefit" is equal to the greater of the account value as of the date we
receive satisfactory proof of death or any applicable guaranteed minimum death
benefit as of the date of death.
If the annuitant is age 70 through 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 70 and 75 when he or she
becomes the successor owner/annuitant and Protection Plus had been elected at
issue), the death benefit will be:
the greater of:
o the account value or
o any applicable guaranteed minimum death benefit
Increased by:
25% of the lesser of:
o the total net contributions (as described above) or
o the death benefit (as described above) less total net contributions
Protection Plus must be elected when the contract is first issued: neither the
owner nor the successor owner/annuitant can add it subsequently. Ask your
registered representative if this feature is available in your state.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct) and (ii) any positive or negative market
value adjustments in the fixed maturity options through the date we receive
your contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) or (ii) above). For any IRA contract returned
to us within seven days after you receive it, we are required to refund the
full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have received
your contribution or not.
Please see "Tax information" later in this Prospectus and in the SAI for
possible consequences of cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your registered representative, can provide you with
the cancellation instructions.
Contract features and benefits 25
2. Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applicable to Rollover
TSA contracts only). These amounts are subject to certain fees and charges
discussed under "Charges and expenses" later in this Prospectus.
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less the
amount of any outstanding loan plus accrued interest (applicable to Rollover
TSA contracts only). Please see "Surrendering your contract to receive its cash
value" in "Accessing your money" later in this Prospectus.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal;
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge and/or the
Protection Plus benefit charge the number of units credited to your contract
will be reduced. A description of how unit values are calculated is found in
the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
26 Determining your contract's value
3. Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, by telephone using TOPS or through
EQAccess. You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the Accumulator(R) Select(SM) II contract is not designed
for professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney or otherwise who is
acting on behalf of one or more owners. In making these determinations, we may
consider the combined transfer activity of annuity contracts and life insurance
policies that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually or
annually on a contract year basis).
Rebalancing will occur on the same day of the month as the contract date. If a
contract is established after the 28th, rebalancing will occur on the first
business day of the month following the contract issue date.
While your rebalancing program is in effect, we will transfer amounts among the
variable investment options so that the percentage of your account value that
you specify is invested in each option at the end of each rebalancing date.
Your entire account value in the variable investment options must be included
in the rebalancing program.
- --------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your registered representative
before electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested. The rebalancing program will remain in effect unless you
request that it be canceled in writing. There is no charge for the rebalancing
feature.
You may not elect the rebalancing program if you are participating in the
general dollar cost averaging or 12 month dollar cost averaging program.
Rebalancing is not available for amounts you have allocated in the fixed
maturity options.
Transferring your money among investment options 27
4. Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
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Method of withdrawal
- -----------------------------------------------------------------------------
Lifetime
required
Substantially minimum
Contract Lump sum Systematic equal distribution
- -----------------------------------------------------------------------------
NQ Yes Yes No No
Rollover IRA Yes Yes Yes Yes
Roth
Conversion IRA Yes Yes Yes No
QP Yes No No Yes
Rollover TSA* Yes Yes No Yes
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information" later in this Prospectus and in
the SAI.
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Under Rollover TSA contracts, if a loan is outstanding, you may only take lump
sum withdrawals as long as the cash value remaining after any withdrawal equals
at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover TSA and IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. (Rollover TSA contracts may have
restrictions).
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59-1/2 and 70-1/2.
You may change the payment frequency, the amount or the percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59-1/2. See
"Tax information" later in this Prospectus and in the SAI. Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59-1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on the delayed payment of the penalty.
You may elect to take substantially equal withdrawals at any time before age
59-1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option, you have completed at least 5 years of payments and
attained age 59-1/2 or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP and Rollover TSA contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70-1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribu-
28 Accessing your money
tion withdrawal payments will be made annually. See the "Required minimum
distributions" section in "Tax information" later in this Prospectus and in the
SAI for your specific type of retirement arrangement.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
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For Rollover IRA, QP and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70-1/2 (if you have
not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options. If those amounts are insufficient,
we will deduct all or a portion of the charge from amounts in the 12 month
dollar cost averaging program.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% (3% in Washington) roll up to age 80 -- If you elect the 5% roll up to age
80 guaranteed minimum death benefit, your benefit base will be reduced on a
dollar-for-dollar basis as long as the sum of your withdrawals in a contract
year is 5% or less of the benefit base on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the benefit base on the most recent contract
date anniversary, that withdrawal and any subsequent withdrawals in that same
contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
benefit base and current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 85 -- If your contract was issued when the
annuitant was between ages 80 and 85, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
later in this Prospectus and in the SAI for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time
Accessing your money 29
your loan is outstanding. On each contract date anniversary after the date the
loan is processed, we will transfer the amount of interest earned in the loan
reserve account to the variable investment options on a pro rata basis. When
you make a loan repayment, unless you specify otherwise, we will transfer the
dollar amount of the loan repaid from the loan reserve account to the
investment options according to the allocation percentages we have on our
records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus and in the SAI.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw and, upon surrender, payment of the cash value. We may postpone such
payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator(R) Select(SM) II offers you several choices of annuity
payout options. Some enable you to receive fixed annuity payments, which can be
either level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option" earlier in this
Prospectus).
- -------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
- -------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period certain
- -------------------------------------------------------------------------
Income Manager payout options Life annuity with period certain
(available for annuitants age 83 Period certain annuity
or less at contract issue)
- -------------------------------------------------------------------------
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following the
annuitant's death with this payout option, it provides the highest monthly
payment of any of the life annuity options, so long as the annuitant is
living.
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contracts that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount applied
to purchase the annuity option has been recovered, payments to the beneficiary
will continue until that amount has been recovered. This payout option is
available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This guaranteed period may not
exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of the
payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain and life annuity with refund
certain payout options are available on a single life or joint and survivor
life basis. The joint and survivor life annuity guarantees payments for the
rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your registered representative can provide details.
30 Accessing your money
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of the Trusts. The contract also offers a fixed
annuity option that can be elected in combination with the variable annuity
payout options. The amount of each variable annuity payment will fluctuate,
depending upon the performance of the variable investment options, and whether
the actual rate of investment return is higher or lower than an assumed base
rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your registered representative. Income Manager
payout options are described in a separate prospectus that is available from
your registered representative. Before you select an Income Manager payout
option, you should read the prospectus which contains important information
that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only).
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract with the plan participant as owner.
You may choose to apply only part of the account value of your Equitable
Accumulator(R) Select(SM) II contract to an Income Manager payout annuity. In
this case, we will consider any amounts applied as a withdrawal from your
Equitable Accumulator(R) Select(SM) II. For the tax consequences of withdrawals,
see "Tax information" later in this Prospectus and in the SAI.
Depending upon your circumstances, an Income Manager contract may be purchased
on a tax-free basis. Please consult your tax adviser. The Income Manager payout
options are not available in all states.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator(R) Select(SM) II contract date.
Except with respect to the Income Manager annuity payout options, where
payments are made on the 15th day of each month, you can change the date your
annuity payments are to begin anytime before that date as long as you do not
choose a date later than the 28th day of any month.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
ANNUITY MATURITY DATE
Your contract has a maturity date by which you must either take a lump sum
withdrawal or select an annuity payout option. The maturity date is generally
the contract date anniversary that follows the annuitant's 90th birthday.
For contracts issued in Pennsylvania, the maturity date is related to the
contract issue date, as follows:
Maximum
Issue age annuitization age
0-75 85
76 86
77 87
78-80 88
81-85 90
This may also be different in other states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
Accessing your money 31
5. Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o A charge for baseBUILDER, if you elect this optional benefit.
o At the time annuity payments are to begin -- charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your state.
An annuity administrative fee may also apply.
o A charge for Protection Plus, if you elect this optional benefit.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.35% of the net assets in each
variable investment option.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.45% of the net assets in each
variable investment option.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85, whichever occurs
first. The charge is equal to 0.30% of the benefit base in effect on the
contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in order of the earliest maturity date(s) first, and then,
from amounts in the 12 month dollar cost averaging program. A market value
adjustment may apply.
PROTECTION PLUS
If you elect Protection Plus, we deduct a charge annually from your account
value on each contract date anniversary for which it is in effect. The charge
is equal to 0.20% of the account value on each contract date anniversary. We
will deduct this charge from your value in the variable investment option on a
pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge first, from the fixed
maturity options, in the order of the earliest maturity date(s) first, and
then, from amounts in the 12 month dollar cost averaging program. A market
value adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (the rate is
1% in Puerto Rico).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.20%.
32 Charges and expenses
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees, legal
counsel fees, administrative service fees, custodian fees and liability
insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts following this Prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the mortality and
expense risks charge or change the minimum initial contribution requirements.
We also may change the guaranteed minimum income benefit and the guaranteed
minimum death benefit or offer variable investment options that invest in
shares of either Trust that are not subject to the 12b-1 fee. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Rollover IRA and Roth Conversion IRA
contracts. Sponsored arrangements include those in which an employer allows us
to sell contracts to its employees or retirees on an individual basis.
Our costs for sales, administration and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
Charges and expenses 33
6. Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you
can designate in a Rollover TSA contract. In a QP contract, the beneficiary
must be the trustee.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian must be the beneficiary so that the custodian can reinvest or
distribute the death benefit as the beneficiary of the account desires.
The death benefit is equal to your account value (without adjustment for any
otherwise applicable negative market value adjustment) or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) and any amount applicable under the Protection Plus feature, as
of the date we receive satisfactory proof of the annuitant's death, any
required instructions for the method of payment, information and forms
necessary to effect payment. The amount of the guaranteed minimum death benefit
will be the guaranteed minimum death benefit as of the date of the annuitant's
death, adjusted for any subsequent withdrawals. Under Rollover TSA contracts we
will deduct the amount of any outstanding loan plus accrued interest from the
amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse who is the
sole primary beneficiary can be a successor owner/annuitant. A successor
owner/annuitant can only be named under NQ and individually owned IRA
contracts.
For individually owned IRA contracts, a beneficiary may be able to have limited
ownership as discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When the owner is not the annuitant under an NQ contract and the owner dies
before annuity payments begin, the beneficiary named to receive this death
benefit upon the annuitant's death will become the successor owner. If you do
not want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (new
owner) within five years after your death (or in a joint ownership
situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin within one year after the
non-annuitant owner's death. Unless this alternative is elected, we will
pay any cash value five years after your death (or the death of the first
owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this Prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole primary beneficiary or the joint owner, then your spouse may elect to
receive the death benefit or continue the contract as successor
owner/annuitant.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required instructions,
information and forms necessary to effect the successor
34 Payment of death benefit
owner/annuitant feature, we will increase the account value to equal your
guaranteed minimum death benefit as of the date of your death if such death
benefit is greater than such account value, plus any amount applicable under
the Protection Plus feature and adjusted for any subsequent withdrawals. The
increase in the account value will be allocated to the investment options
according to the allocation percentages we have on file for your contract. In
determining whether the guaranteed minimum death benefit will continue to grow,
we will use your surviving spouse's age (as of the date we receive satisfactory
proof of your death, any required instructions and the information and forms
necessary to effect the successor owner/annuitant feature).
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the death benefit as of
the date of your death, if such death benefit is greater than such account
value, plus any amount applicable under the Protection Plus feature and
adjusted for any subsequent withdrawals. The beneficiary continuation option is
available if we have received regulatory clearance in your state. Where an IRA
contract is owned in a custodial individual retirement account, the custodian
may reinvest the death benefit in an Accumulator(R) Select(SM) II individual
retirement annuity contract, using the account beneficiary as the annuitant.
Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit provisions
(including any guaranteed minimum death benefit) will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected by
the beneficiary.
Generally payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" later in this Prospectus and
in the SAI, your beneficiary may choose the "5-year rule" instead of annual
payments over life expectancy. If your beneficiary chooses this, your
beneficiary may take withdrawals as desired, but the entire account value must
be fully withdrawn by December 31st of the 5th calendar year after your death.
Payment of death benefit 35
7. Tax information
- --------------------------------------------------------------------------------
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable(R) Accumulator(SM) Select II contracts owned
by United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers or federal gift and estate taxes. Transfers of the contract,
rights under the contract, or payments under the contract may be subject to
gift or estate taxes. You should not rely only on this document, but should
consult your tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA became
effective on January 1, 2002, and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions which can be made to all types of tax-favored retirement plans.
In addition to increasing the amounts which can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs") and Code Section 403(b)
Arrangements ("TSAs"), respectively: an IRA or 403(b) annuity contract such as
this one, or an IRA or 403(b)(7) custodial or other qualified account. Annuity
contracts can also be purchased in connection with retirement plans qualified
under Code Section 401 ("QP contracts"). How these arrangements work, including
special rules applicable to each, are described in the specific sections for
each type of arrangement, below. More information on IRAs and TSAs is provided
in the SAI. You should be aware that the funding vehicle for a qualified
arrangement does not provide any tax deferral benefit beyond that already
provided by the Code for all permissible funding vehicles. Before choosing an
annuity contract, therefore, you should consider the annuity's features and
benefits, such as Accumulator(R) Select(SM) II's 12 Month Dollar Cost Averaging,
choice of death benefits, selection of investment funds and fixed maturity
options and its choices of pay-out options, as well as the features and
benefits of other permissible funding vehicles and the relative costs of
annuities and other arrangements. You should be aware that cost may vary
depending on the features and benefits made available and the charges and
expenses of the investment options or funds that you elect. See also Appendix
II at the end of this Prospectus for a discussion of QP contracts.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than your
spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount pledged
will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation, partnership,
trust or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your
36 Tax information
investment in the contract equals the contributions you made, less any amounts
you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
PROTECTION PLUS FEATURE
In order to enhance the amount of the death benefit to be paid at the
annuitant's death, you may purchase a Protection Plus rider for your NQ
contract. Although we regard this benefit as an investment protection feature
which is part of the contract and which should have no adverse tax effect, it
is possible that the IRS could take a contrary position or assert that the
Protection Plus rider is not part of the contract. IN SUCH A CASE THE CHARGES
FOR THE PROTECTION PLUS RIDER COULD BE TREATED FOR FEDERAL INCOME TAX PURPOSES
AS A PARTIAL WITHDRAWAL FROM THE CONTRACT. If this were so, such a deemed
withdrawal could be taxable and, for contract owners under age 59-1/2, also
subject to a tax penalty. Were the IRS to take this position, Equitable would
take all reasonable steps to attempt to avoid this result, which would include
amending the contract (with appropriate notice to you).
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the NQ
contract is another nonqualified deferred annuity contract (or life insurance
or endowment contract).
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator(R) Select(SM) II NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same on
both sides of the exchange transaction.
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the Equitable Accumulator(R) Select(SM) II NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between carriers and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER
YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59-1/2 penalty tax include
distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life (or
life expectancy) or the joint lives (or joint life expectancy) of you and a
beneficiary.
OTHER INFORMATION
The IRS has stated that you will be considered the owner of the assets in the
separate account if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has the authority to issue guidelines prescribing the circumstances
in which your ability to direct your investment to particular portfolios within
a separate account may cause you, rather than the insurance company, to be
treated as the owner of the portfolio shares attributable to your nonqualified
annuity contract. If you were to be considered the owner of the underlying
shares, income and gains attributable to such portfolio shares would be
currently included in your gross income for federal income tax purposes.
Incidents of investment control could include among other items, the number of
investment options available under a contract and/or the frequency of transfers
available under the contract. In connection with the issuance of regulations
concerning investment diversification in 1986, the Treasury Department
announced that the diversification regulations did not provide guidance on
investor control but that guidance would be issued in the form of regulations
or rulings. As of the date of this prospectus, no such guidance has been
issued. It is not known whether such guidelines, if in fact issued, would have
retroactive adverse effect on existing contracts. We can not provide assurance
as to the terms or scope of any future guidance nor any assurance that such
guidance would not be imposed on a retroactive
Tax information 37
basis to contracts issued under this prospectus. We reserve the right to modify
the contract as necessary to attempt to prevent you from being considered the
owner of the assets of the separate account for tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and the
timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets funding the account
typically include mutual funds and/or individual stocks and/or securities in a
custodial account and bank certificates of deposit in a trusteed account . In
an individual retirement annuity, an insurance company issues an annuity
contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http:// www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). The SAI contains the information that the IRS requires you to
have before you purchase an IRA. We do not discuss education IRAs because they
are not available in individual retirement annuity form. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial individual retirement account, the
disclosure will apply only if you terminate your account or transfer ownership
of the contract to yourself.
The Equitable Accumulator Select II traditional and Roth IRA contracts have
been approved by the IRS as to form for use as a traditional IRA and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the Equitable Accumulator Select traditional and Roth IRA
contracts. Because the IRS has announced that issuers of formally approved IRAs
must amend their contracts to reflect recent tax law changes and resubmit the
amended contracts to retain such formal approval, Equitable intends to comply
with such requirement during 2002.
PROTECTION PLUS(SM) FEATURE
THE PROTECTION PLUS FEATURE IS OFFERED FOR IRA CONTRACTS, SUBJECT TO STATE AND
CONTRACT AVAILABILITY. THE IRS APPROVAL OF THE ACCUMULATOR(R) SELECT(SM) II
CONTRACT AS A TRADITIONAL IRA AND ROTH IRA, RESPECTIVELY, NOTED IN THE
PARAGRAPH ABOVE DOES NOT INCLUDE THIS OPTIONAL PROTECTION PLUS FEATURE. We have
filed a request with the IRS that the contract with the Protection Plus feature
qualifies as to form for use as a traditional IRA and Roth IRA, respectively.
THERE IS NO ASSURANCE THAT THE CONTRACT WITH THE PROTECTION PLUS FEATURE MEETS
THE IRS QUALIFICATION REQUIREMENTS FOR IRAS. IRAs generally may not invest in
life insurance contracts. Although we view the optional Protection Plus benefit
as an investment protection feature which should have no adverse tax effect and
not as life insurance, it is possible that the IRS could take a contrary
position regarding tax qualification or assert that the Protection Plus rider
is not a permissible part of an individual retirement annuity contract. We
further view the optional Protection Plus benefit as part of the contract.
There is also a risk that the IRS may take the position that the optional
Protection Plus benefit is not part of the annuity contract. In such a case,
the charges for the Protection Plus rider could be treated for federal income
tax purposes as a partial withdrawal from the contract. If this were so, such a
deemed withdrawal could be taxable, and for contract owners under age 59-1/2,
also subject to a tax penalty. Were the IRS to take any adverse position,
Equitable would take all reasonable steps to attempt to avoid any adverse
result, which would include amending the contract (with appropriate notice to
you). YOU SHOULD DISCUSS WITH YOUR TAX ADVISER WHETHER YOU SHOULD CONSIDER
PURCHASING AN ACCUMULATOR(R) SELECT(SM) II IRA OR ACCUMULATOR(R) SELECT(SM) II
ROTH IRA WITH THE OPTIONAL PROTECTION PLUS FEATURE.
CONTRIBUTIONS
Individuals may make three different types of contributions to an IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
38 Tax information
o direct custodian-to-custodian transfers from other IRAs of the same type
("direct transfers").
In addition, an individual may make a taxable rollover contribution from a
traditional IRA to a Roth IRA ("conversion" contributions).
Contributions to all types of IRAs are compensation-based. They are either made
from your current compensation or have a connection with past compensation (for
example, rollover contributions from an eligible retirement plan that you had
with an employer relate to past compensation). Under certain circumstances,
your nonworking spouse, former spouse or surviving spouse may contribute to an
IRA. You can make regular contributions for any year to a traditional IRA
within federal tax law limits up until the calendar year you reach the age
70-1/2. Regular contributions for any year to a Roth IRA can be made at any time
during your life, subject to federal tax law limits.
The amount of contributions you may make to an IRA for any year and whether
such contributions are eligible for special tax treatment (for example,
deductibility from income or a special credit) may vary, depending on your
income, age and whether you participate in an employer-sponsored retirement
plan. Roth IRA contributions are not tax deductible. The maximum regular
contribution that can be made to all of your IRAs (whether traditional or Roth)
for 2002 is $3,000. The maximum regular contribution for 2002 is increased to
$3,500 if you are at least age 50 at any time during 2002.
Rollover and transfer contributions are not subject to dollar limits. Rollover
contributions may be made to a traditional IRA from "eligible retirement plans"
which include other traditional IRAs, qualified plans, TSAs and, beginning in
2002, governmental 457(b) plans. For Roth IRAs, rollover contributions may be
made from other Roth IRAs and traditional IRAs. The conversion of a traditional
IRA to a Roth IRA is taxable. Direct transfer contributions may only be made
directly from one traditional IRA to another or from one Roth IRA to another.
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002 after-tax contributions to a qualified plan or TSA may
be rolled over to a traditional IRA (but not a Roth IRA). You should be aware
before you roll over any after-tax contributions that you are responsible for
calculating the taxable amount of any distributions you take from the
traditional IRA.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A more complete discussion of contributions to traditional IRAs and Roth IRAs
is contained in the SAI.
WITHDRAWALS AND DISTRIBUTIONS
You can withdraw any or all of your funds from an IRA at any time; you do not
need to wait for a special event like retirement. Earnings in IRAs are not
subject to federal income tax until amounts are paid to you or your
beneficiary. Withdrawals from an IRA, surrender of an IRA, death benefits from
an IRA and annuity payments from an IRA may be fully or partially taxable.
Withdrawals and distributions from IRAs are taxable as ordinary income (not
capital gain).
Payments from traditional IRAs and Roth IRAs are taxed differently. Payments
from traditional IRAs are generally fully taxable unless you have made
nondeductible regular contributions or rolled over after-tax contributions. In
any event, the issuer of the traditional IRA is entitled to report the
distribution as fully taxable and it is your responsibility to calculate the
taxable and tax-free portions of any traditional IRA payments on your own tax
returns.
Distributions from Roth IRAs generally receive return of contribution treatment
first under federal income tax calculation rules before any income is taxable.
Beginning in 2003, certain distributions from Roth IRAs may qualify for fully
tax-free treatment. These will be distributions after you reach age 59-1/2, die,
become disabled or meet a qualified first-time homebuyer tax rule. You also
have to meet a five-year aging period. It is not possible to have a tax-free
qualified distribution before the year 2003 because of the five-year aging
requirement.
A distribution from a traditional IRA will not be taxable if it is rolled over
to an eligible retirement plan. A distribution from a Roth IRA will not be
taxable if it is rolled over to another Roth IRA.
Taxable withdrawals or distributions from IRAs may be subject to an additional
10% penalty tax if you are under age 59-1/2, unless an exception applies.
Traditional IRAs are subject to required minimum distribution rules which
require that amounts begin to be distributed in a prescribed manner from the
IRA after the owner reaches age 70-1/2. These rules also require distributions
after the owner's death. No distributions are required to be made from Roth
IRAs until after the Roth IRA owner's death, but then the required minimum
distribution rules apply.
A more complete discussion of the tax aspects of withdrawals and distributions
from traditional IRAs and Roth IRAs is contained in the SAI.
SPECIAL RULES FOR CONTRACTS FUNDING QUALIFIED PLANS
For QP contracts, your plan administrator or trustee notifies you as to tax
consequences. See Appendix II at the end of this Prospectus.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs).
Generally there are two types of funding vehicles available for 403(b)
arrangements -- an annuity contract under Section 403(b)(1) of the Code or a
custodial account which invests only in mutual funds and which is treated as an
annuity contract under Section 403(b)(7) of which the Code. Both types of
403(b) arrangements qualify for tax deferral.
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator(R)
Select(SM) II Rollover TSA contract:
o a rollover from another eligible retirement plan; or
Tax information 39
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
If you make a direct transfer, you must fill out our transfer form.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from these sources: qualified plans, governmental
457(b) plans, other TSAs and 403(b) arrangements and traditional IRAs. All
rollover contributions must be pre-tax funds only with appropriate
documentation satisfactory to us.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator(R) Select(SM) II contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator(R) Select(SM) II Rollover
TSA contract, you may have to obtain your employer's authorization or
demonstrate that you do not need employer authorization.
Contributions to TSAs are discussed in greater detail in the SAI.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
You may also need spousal consent for certain transactions and payments.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are severed from employment with the employe who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator(R)
Select(SM) II Rollover TSA; or
o you reach age 59-1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
The amount of funds subject to the withdrawal restrictions may depend on the
source of the funds used to establish the Accumulator(R) Select(SM) II TSA.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we currently do not track
your investment in the contract, if any, it is your responsibility to determine
how much of the distribution is taxable.
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59-1/2 unless an exception
applies.
Distributions from TSAs are discussed in greater detail in the SAI.
LOANS FROM TSAS
Loans are generally not treated as a taxable distribution. You may take loans
from a TSA unless restricted by the employer (for example, under an employer
plan subject to ERISA). If you cannot take a loan, or cannot take a loan
without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans from TSAs are discussed in greater detail in the SAI.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan (a qualified plan, a governmental 457(b) plan
(separate accounting required), another TSA or a traditional IRA) which agrees
to accept the rollover.
A spousal beneficiary may also roll over death benefits or certain
divorce-related payments.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Rollovers from TSAs are discussed in greater detail in the SAI.
REQUIRED MINIMUM DISTRIBUTIONS
TSAs are subject to required minimum distribution rules beginning at age 70-1/2
or separation of service, if later. These rules are discussed in greater detail
in the SAI.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding
40 Tax information
in some cases. Generally, we do not have to withhold if your distributions are
not taxable. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of your distribution. Any income tax withheld
is a credit against your income tax liability. If you do not have sufficient
income tax withheld or do not make sufficient estimated income tax payments,
you may incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look or
cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a Roth
IRA to the extent it is reasonable for us to believe that a distribution is
includable in your gross income. This may result in tax being withheld even
though the Roth IRA distribution is ultimately not taxable. You can elect out
of withholding as described below.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However we may require additional documentation in the case of
payments made to non United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state
or any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
traditional IRAs and Roth IRAs, where it is reasonable to assume an amount is
includable in gross income.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. The plan administrator is responsible for withholding from
qualified plan distributions. An eligible rollover distribution from a TSA or a
qualified plan can be rolled over to another eligible retirement plan. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions:
o any distributions which are required minimum distributions after age 70-1/2 or
retirement from service with the employer; or
o substantially equal periodic payments made at least annually for your life (or
life expectancy) or the joint lives (or joint life expectancy) of you and your
designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o hardship withdrawals; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
Tax information 41
8. More information
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ABOUT SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. The results of Separate Account No. 49's operations are
accounted for without regard to Equitable Life's other operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in Class IB/B shares issued by the corresponding portfolio of
either Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No.
49 or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE TRUSTS
EQ Advisors Trust and AXA Premier VIP Trusts are registered under the
Investment Company Act of 1940. They are classified as "open-end management
investment companies," more commonly called mutual funds. Each Trust issues
different shares relating to each portfolio.
Equitable Life serves as the investment manager of the Trusts. As such,
Equitable Life oversees the activities of the investment advisers with respect
to the Trusts and is responsible for retaining or discontinuing the services of
those advisers. (Prior to September 1999 EQ Financial Consultants, Inc., the
predecessor to AXA Advisors, LLC and an affiliate of Equitable Life, served as
investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. AXA Premier VIP Trust commenced operations on December 31,
2001.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on Trusts' shares are reinvested
in full. The Board of Trustees of each Trust may establish additional
portfolios or eliminate existing portfolios at any time. More detailed
information about each Trust, its portfolio investment objectives, policies,
restrictions, risks, expenses, its Rule 12b-1 Plan relating to its Class IB/B
shares and other aspects of its operations, appears in the prospectuses for
each Trust, which are attached at the end of this Prospectus, or in the
respective SAIs which are available upon request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
FMO rates are determined daily. The rates in the table are illustrative only
and will most likely differ from the rates applicable at time of purchase.
Current FMO rates can be obtained from your registered representative.
The rates to maturity for new allocations as of February 15, 2002 and the
related price per $100 of maturity value were as shown below:
- ------------------------------------------------------------------------
Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100 of
maturity year February 15, 2002 maturity value
- ------------------------------------------------------------------------
2003 3.00% $ 97.09
2004 3.00% $ 94.26
2005 3.63% $ 89.85
2006 4.07% $ 85.24
2007 4.49% $ 80.27
2008 4.82% $ 75.38
2009 5.08% $ 70.67
2010 5.29% $ 66.19
2011 5.47% $ 61.90
- ------------------------------------------------------------------------
42 More information
- ------------------------------------------------------------------------
Fixed maturity options
with February 15th Rate to maturity
maturity date of as of Price per $100 of
maturity year February 15, 2002 maturity value
- ------------------------------------------------------------------------
2012 5.59% $ 58.03
- ------------------------------------------------------------------------
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based
on a 365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. See Appendix III at the end of
this Prospectus for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
More information 43
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits" earlier in
this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form. Until we receive the signed application or the signed
Acknowledgement of Receipt form, your ability to perform financial transactions
may be limited.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM -- FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account or
credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT
EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day, generally, is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions. Our business day generally ends at 4:00 p.m. Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all
the required information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the first
business day of the month following the date on which the properly completed
loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at the
value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity in
effect for that fixed maturity option on the business day of the transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for EQ Advisors Trust; or
o any other matters described in each prospectus for the Trusts or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
44 More information
VOTING RIGHTS OF OTHERS
Currently, we control the Trusts. Their shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of the
Trusts are held by separate accounts of insurance companies both affiliated and
unaffiliated with us. Shares held by these separate accounts will probably be
voted according to the instructions of the owners of insurance policies and
contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Board of Trustees of each Trust
intends to monitor events in order to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that a response to any of those events
insufficiently protects our contract owners, we will see to it that appropriate
action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001
and 2000, and for the three years ended December 31, 2001, in this prospectus
by reference to the 2001 Annual Report on Form 10-K are incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI is
available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this Prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. If your individual
retirement annuity contract is held in your custodial individual retirement
account, you may only assign or transfer ownership of such an IRA contract to
yourself. Loans are not available and you cannot assign Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contracts as security for a loan or other
obligation. If the employer that provided the funds does not restrict them,
loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC and AXA Distributors,
LLC. For this purpose, AXA Advisors, LLC serves as the principal underwriter of
Separate Account No. 45 and AXA Distributors, LLC serves as the principal
underwriter of Separate Account No. 49. The offering of the contracts is
intended to be continuous.
DISTRIBUTION OF THE CONTRACTS BY AXA ADVISORS, LLC
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, has responsibility for sales and
marketing functions for the contracts funded through Separate Account No. 45.
AXA Advisors also acts as distributor for other Equitable Life annuity products
with different features, expenses and fees. AXA Advisors is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, New York 10104.
These contracts will be sold by registered representatives who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents.
DISTRIBUTION OF THE CONTRACTS BY AXA DISTRIBUTORS, LLC
AXA Distributors, LLC ("AXA Distributors"), an indirect, wholly owned
subsidiary of Equitable Life, has responsibility for sales and marketing
functions for the contracts funded through Separate Account No. 49. AXA
Distributors also acts as distributor for other Equitable Life annu-
More information 45
ity products with different features, expenses, and fees. AXA Distributors is
registered with the SEC as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. AXA Distributors' principal business
address is 1290 Avenue of the Americas, New York, New York 10104.
AXA Distributors is the successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. Like AXA Distributors, Equitable
Distributors, Inc. was owned by Equitable Holdings, LLC.
These contracts are sold by financial professionals of AXA Distributors, as
well as by affiliated and unaffiliated broker-dealers who have entered into
selling agreements with AXA Distributors. We pay broker-dealer sales
compensation that will generally not exceed an amount equal to 7% of total
contributions made under the contracts. AXA Distributors may also receive
compensation and reimbursement for its marketing services, under the terms of
its distribution agreement with Equitable Life. Broker-dealers receiving sales
compensation will generally pay a portion of it to their financial professional
as commissions related to sales of the contracts. The offering of the contracts
is intended to be continuous.
46 More information
9. Investment performance
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The table below shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account all fees and charges under the contract, including
the optional baseBUILDER benefits charge and the charge for Protection Plus,
but does not reflect the charges designed to approximate certain taxes imposed
on us, such as premium taxes in your state or any applicable annuity
administrative fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we have adjusted the results of
the portfolios to reflect the charges under the contracts that would have
applied had the investment option been available. The contracts will be offered
for the first time in 2002.
For the EQ/"Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for periods before March 22,
1985, reflect the results of the variable investment options that preceded
them. The "Since portfolio inception" figures for these options are based on
the date of inception of the preceding variable investment options. We have
adjusted these results to reflect the maximum investment advisory fee payable
for the portfolios, as well as an assumed charge of 0.06% for direct operating
expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999, the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
Investment performance 47
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
EQ/Aggressive Stock (26.61)% (5.43)% ( 5.24)%
EQ/Alliance Common Stock (12.45)% 7.28% 7.89%
EQ/Alliance Global (21.79)% 1.52% 1.91%
EQ/Alliance Growth Investors (14.30)% 4.87% 5.04%
EQ/Alliance Money Market 1.59% 2.48% 2.40%
EQ/Alliance Premier Growth (25.42)% -- (12.77)%
EQ/Alliance Small Cap Growth (14.90)% -- 6.91%
EQ/Alliance Technology (25.89)% -- (35.18)%
EQ/Bernstein Diversified Value 1.13% -- 3.49%
EQ/Capital Guardian International (22.40)% -- ( 5.96)%
EQ/Capital Guardian Research ( 3.89)% -- 1.69%
EQ/Capital Guardian U.S. Equity ( 3.88)% -- ( 0.36)%
EQ/Emerging Markets Equity ( 6.97)% -- ( 7.27)%
EQ/Equity 500 Index (13.84)% 7.51% 8.12%
EQ/Evergreen Omega (18.60)% -- ( 9.11)%
EQ/FI Mid Cap (15.07)% -- (11.35)%
EQ/FI Small/Mid Cap Value 2.01% -- 7.10%
EQ/High Yield ( 1.23)% (2.54)% ( 2.11)%
EQ/International Equity Index (26.89)% -- ( 3.74)%
EQ/J.P. Morgan Core Bond 5.88% -- 4.17%
EQ/Janus Large Cap Growth (24.43)% -- (28.85)%
EQ/Lazard Small Cap Value 15.49% -- 4.71%
EQ/Mercury Basic Value Equity 3.52% -- 11.26%
EQ/MFS Emerging Growth Companies (35.31)% -- 7.11%
EQ/MFS Investors Trust (17.58)% -- ( 5.36)%
EQ/MFS Research (23.31)% -- 3.61%
EQ/Putnam Growth & Income Value ( 8.59)% -- 3.12%
EQ/Putnam International Equity (23.02)% -- 5.73%
EQ/Putnam Voyager (25.90)% -- 4.65%
EQ/Small Company Index 0.11% -- 1.47%
Length of portfolio period
----------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
EQ/Aggressive Stock (10.44)% (5.43)% 1.50% 9.61%
EQ/Alliance Common Stock ( 3.68)% 7.28% 9.99% 11.36%
EQ/Alliance Global ( 5.80)% 1.52% 5.96% 6.18%
EQ/Alliance Growth Investors ( 1.35)% 4.87% 6.36% 9.37%
EQ/Alliance Money Market 2.41% 2.48% 1.98% 3.98%
EQ/Alliance Premier Growth -- -- -- (12.76)%
EQ/Alliance Small Cap Growth 5.60% -- -- 6.91%
EQ/Alliance Technology -- -- -- (35.18)%
EQ/Bernstein Diversified Value ( 0.75)% -- -- 3.48%
EQ/Capital Guardian International -- -- -- ( 5.96)%
EQ/Capital Guardian Research -- -- -- 1.68%
EQ/Capital Guardian U.S. Equity -- -- -- ( 0.37)%
EQ/Emerging Markets Equity 1.37% -- -- (11.72)%
EQ/Equity 500 Index ( 3.84)% 7.51% -- 10.93%
EQ/Evergreen Omega ( 9.10)% -- -- ( 9.10)%
EQ/FI Mid Cap -- -- -- (12.02)%
EQ/FI Small/Mid Cap Value 1.32% -- -- 1.43%
EQ/High Yield ( 6.19)% (2.54)% 4.37% 4.71%
EQ/International Equity Index ( 9.89)% -- -- ( 3.74)%
EQ/J.P. Morgan Core Bond 3.43% -- -- 4.17%
EQ/Janus Large Cap Growth -- -- -- (29.36)%
EQ/Lazard Small Cap Value 9.89% -- -- 4.71%
EQ/Mercury Basic Value Equity 9.49% -- -- 11.26%
EQ/MFS Emerging Growth Companies ( 4.52)% -- -- 7.11%
EQ/MFS Investors Trust ( 5.36)% -- -- ( 5.36)%
EQ/MFS Research ( 5.17)% -- -- 3.61%
EQ/Putnam Growth & Income Value ( 2.85)% -- -- 3.12%
EQ/Putnam International Equity 1.06% -- -- 5.73%
EQ/Putnam Voyager ( 8.88)% -- -- 4.65%
EQ/Small Company Index 3.63% -- -- 1.47%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October
16, 1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity,
EQ/MFS Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity and EQ/Putnam Voyager
(May 1, 1997); EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap
Value and EQ/Janus Large Cap Growth (September 5, 2000); EQ/Balanced (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Growth and Income, EQ/Alliance
International, EQ/Alliance Quality Bond, EQ/AXP New Dimensions and EQ/AXP
Strategy Aggressive (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May 1, 1997);
EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein Diversified
Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Calvert Socially Responsible (September 1, 1999); EQ/Alliance Technology
(May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid
Cap and EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus
(August 31, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care,
AXA Premier VIP International Equity, AXA Premier VIP Large Cap Core
Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value,
AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value
and AXA Premier VIP Technology (December 31, 2001). No performance
information is provided
48 Investment performance
for portfolios and/or variable investment options with inception dates after
December 31, 2000.
Investment performance 49
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included in
the rankings prepared by Lipper Analytical Services, Inc., Morningstar, Inc.,
VARDS or similar investment services that monitor the performance of insurance
company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's
Morningstar's Variable Annuity
Sourcebook
Business Week
Forbes
Fortune
Institutional Investor
Money
Kiplinger's Personal Finance
Financial Planning
Investment Adviser
Investment Management Weekly
Money Management Letter
Investment Dealers Digest
National Underwriter
Pension & Investments
USA Today
Investor's Business Daily
The New York Times
The Wall Street Journal
The Los Angeles Times
The Chicago Tribune
- --------------------------------------------------------------------
From time to time, we may also advertise different measurements of the
investment performance of the variable investment options and/or the portfolios,
including the measurements that compare the performance to market indices that
serve as benchmarks. Market indices are not subject to any charges for
investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge, administrative
charge and distribution charge or any withdrawal or optional benefit charge.
Comparisons with these benchmarks, therefore, may be of limited use. We use them
because they are widely known and may help you to understand the universe of
securities from which each portfolio is likely to select its holdings.
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives.
According to Lipper the data are presented net of investment management fees,
direct operating expenses and asset-based charges applicable under annuity
contracts, Lipper data provide a more accurate picture than market benchmarks
of the Equitable Accumulator(R) perform relative to other variable annuity
products. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges applicable
under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the EQ/Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the EQ/Alliance
Quality Bond and EQ/High Yield options will be based on net changes in a
hypothetical investment over a given 30-day period, exclusive of capital
changes, and then "annualized" (assuming that the same 30-day result would
occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the EQ/Alliance Money Market, EQ/Alliance Quality
Bond and EQ/High Yield options. The current yields and effective yields assume
the deduction of all current contract charges and expenses other than the
optional baseBUILDER benefit charge, the optional Protection Plus benefit
charge and any charge designed to approximate certain taxes that may be imposed
on us, such as premium taxes in your state. The yields and effective yields for
the EQ/Alliance Money Market option, when used for the 12 month dollar cost
averaging program, assume that no contract charges are deducted. For more
information, see "Yield Information for the EQ/Alliance Money Market Option,
EQ/Alliance Quality Bond Option and EQ/High Yield Option."
50 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2001, reports on Form 8-K dated January 31 and May 30, 2001, and quarterly
reports on Form 10-Q for the quarters ended March 31, and June 30, 2001, are
considered to be a part of this prospectus because they are incorporated by
reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 51
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Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 49 with the same daily asset charges of 1.90%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001
- ----------------------------------------------------------------------------------------------------------------------------------
For the year ending December 31,
---------------------------------------
2001
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 46.83
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 188.32
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Money Market
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 25.51
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 217
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.02
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 27
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 13.91
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 7
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.88
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 5
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 37.29
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 4
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.64
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 16
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.56
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.57
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 41
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.56
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 13
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U. S. Equity
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 21
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 5.96
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 23.37
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 11
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.59
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-1
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001 (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------------
For the year ending December 31,
---------------------------------------
2001
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.48
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 5
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.91
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 14
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 21.83
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) --
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.71
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 26
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.96
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 31
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.33
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 6
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.22
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 14
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.32
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 2
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 16.76
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 9
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 14.00
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.56
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 6
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Research
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.01
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 7
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 11.77
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 19
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 13.20
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 18
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.57
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 4
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index
- ----------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.77
- ----------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1
- ----------------------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Condensed financial information
Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R)
Select(SM) II QP contract should discuss with their tax advisers whether this is
an appropriate investment vehicle for the employer's plan. Trustees should
consider whether the plan provisions permit the investment of plan assets in
the QP contract, the distribution of such an annuity, the purchase of the
guaranteed minimum income benefit and the payment of death benefits in
accordance with the requirements of the federal income tax rules. The QP
contract and this prospectus should be reviewed in full, and the following
factors, among others, should be noted. Assuming continued plan qualification
and operation, earnings on qualified plan assets will accumulate value on a
tax-deferred basis even if the plan is not funded by the Equitable
Accumulator(R) Select(SM) II QP contract or another annuity. Therefore, you
should purchase an Equitable Accumulator(R) QP contract to fund a plan for the
contract's features and benefits other than tax deferral, after considering the
relative costs and benefits of annuity contracts and other types of
arrangements and funding vehicles. This QP contract accepts transfer
contributions only and not regular, ongoing payroll contributions. For 401(k)
plans under defined contribution plans, no employee after-tax contributions are
accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional transfer contribution may be made per contract year. For defined
benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A market value
adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70-1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70-1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60-1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
Appendix II: Purchase considerations for QP contracts B-1
(This page intentionally left blank)
Appendix III: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2003 to a fixed maturity option with a maturity date of
February 15, 2012 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,846 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2007.
- --------------------------------------------------------------------------------
Hypothetical assumed
rate to maturity on
February 15, 2007
5.00% 9.00%
- --------------------------------------------------------------------------------
As of February 15, 2007 (before withdrawal)
- --------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- --------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- --------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- --------------------------------------------------------------------------------
On February 15, 2007 (after withdrawal)
- --------------------------------------------------------------------------------
(4) Portion of market value adjustment associated
with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- --------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,499 $ 54,851
- --------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- --------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- --------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- --------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
Appendix III: Market value adjustment example C-1
(This page intentionally left blank)
Appendix IV: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the AXA Premier VIP Core Bond, EQ/Alliance Intermediate
Government Securities, EQ/Alliance Money Market or EQ/Alliance Quality Bond
options or the fixed maturity options), no additional contributions, no
transfers, no withdrawals and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
- --------------------------------------------------------------------------------------
End of 5% roll up to age 80 Annual ratchet to age 80
contract guaranteed minimum guaranteed minimum
year Account value death benefit(1) death benefit
- --------------------------------------------------------------------------------------
1 $105,000 $ 105,000(1) $ 105,000(3)
- --------------------------------------------------------------------------------------
2 $115,500 $ 110,250(2) $ 115,500(3)
- --------------------------------------------------------------------------------------
3 $129,360 $ 115,763(2) $ 129,360(3)
- --------------------------------------------------------------------------------------
4 $103,488 $ 121,551(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
5 $113,837 $ 127,628(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
6 $127,497 $ 134,010(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
7 $127,497 $ 140,710(1) $ 129,360(4)
- --------------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80*
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be the guaranteed minimum death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be the current
account value since it is higher than the current guaranteed minimum death
benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is the guaranteed minimum death benefit at the end of the prior year
since it is equal to or higher than the current account value.
* If your contract is issued in the state of Washington, the applicable
crediting rate would be 3%, and, therefore, the values shown would be lower.
Appendix IV: Guaranteed minimum death benefit example D-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option, EQ/Alliance
Quality Bond Option and EQ/High Yield Option 23
Distribution of the contracts 24
Financial Statements 25
How to obtain an Equitable Accumulator(R) Select(SM) Statement of Additional
Information for Separate Account No. 49
Send this request form to:
Equitable Accumulator(R) Select(SM) II
P.O. Box 1547 Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator(R) Select(SM) II SAI dated May 1, 2002:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
(SAI 4ACS(5/02))
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SUPPLEMENT DATED MAY 1, 2002 TO PROSPECTUSES FOR:
o Income Manager Accumulator(R) o Equitable Accumulator(R) o Equitable Accumulator(R) Advisor(SM)
o Income Manager(R) Rollover IRA o Equitable Accumulator(R) Select(SM) o Equitable Accumulator(R) Elite(SM)
o Equitable Accumulator(R) (IRA, NQ, QP) o Equitable Accumulator(R) Select(SM) II o Equitable Accumulator(R) Elite(SM) II
o Equitable Accumulator(R) Plus(SM) o Equitable Accumulator(R) Express(SM)
- --------------------------------------------------------------------------------
This Supplement updates certain information in the most recent prospectus and
statement of additional information you received for any of the products listed
above, and in any Supplements to that prospectus and statement of additional
information. The Appendix sets forth the dates of such prior prospectuses,
statements of additional information and supplements, which, in addition to
this Supplement, should be kept for future reference.
We have filed with the Securities and Exchange Commission (SEC) our Statement
of Additional Information (SAI) dated May 1, 2002. If you do not presently have
a copy of the prospectus and prior Supplements, you may obtain additional
copies, as well as a copy of the SAI, from us, free of charge, by writing to
Equitable Life, P.O. Box 1547, Secaucus, NJ 07096-1547, or calling (800)
789-7771. If you only need a copy of the SAI, you may mail in the SAI request
form located at the end of this Supplement. The SAI has been incorporated by
reference into this Supplement.
In this Supplement, we provide the following information: (1) how to reach us;
(2) combination of certain investment options; (3) investment options; (4) the
Trusts' annual expenses; (5) disruptive transfer activity; (6) beneficiary
continuation option; (7) tax information; (8) condensed financial information;
(9) investment performance; and (10) updated information on Equitable Life.
(1) HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed (for example our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing). In addition, the level and type of service available may be
restricted based on criteria established by us.
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
Equitable Accumulator(R)
P.O. Box 13014
Newark, NJ 07188-0014
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
Equitable Accumulator(R)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
REGULAR MAIL:
Equitable Accumulator(R)
P.O. Box 1547
Secaucus, NJ 07096-1547
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
EXPRESS DELIVERY:
Equitable Accumulator(R)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
REPORTS WE PROVIDE:
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract year.
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND
EQACCESS SYSTEMS:
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options;
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
X00327
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess.
Of course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity, such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" in your prospectus).
CUSTOMER SERVICE REPRESENTATIVE:
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
(2) COMBINATION OF CERTAIN INVESTMENT OPTIONS
Interests in the EQ/Putnam International Equity, EQ/Capital Guardian U.S.
Equity and the EQ/Alliance Small Cap Growth investment options (the "surviving
options") replaced or will replace interests in the EQ/T. Rowe Price
International Stock, EQ/AXP New Dimensions and the EQ/AXP Strategy Aggressive
investment options, respectively (the "replaced options"), and these options
are or will no longer be available. At the time of the replacement, all the
assets that are in the replaced options are moved into the surviving options.
After the replacement, any allocation elections to the replaced options will
then be considered as allocation elections to the surviving options. The
effective date for the replacement of EQ/T. Rowe Price International Stock
investment option was April 26, 2002, therefore, references to it have been
omitted from the fee table, the expense examples and the investment
performance. The replacement of EQ/AXP New Dimensions and the EQ/AXP Strategy
Aggressive investment options will be on or about July 12, 2002, subject to
shareholder vote. We will notify you if these replacements do not take place.
(3) INVESTMENT OPTIONS
(a) Please note the following name change:
- --------------------------------------------------------------------------------
Former Name New Name Effective Date
- --------------------------------------------------------------------------------
EQ/Alliance High Yield EQ/High Yield May 1, 2002
EQ/Putnam Investors Growth EQ/Putnam Voyager May 1, 2002
- --------------------------------------------------------------------------------
The investment objective and adviser for this portfolio remains the same.
(b) Please note that we anticipate that the following investment option will be
available under all contracts on or about May 1, 2002:
- ---------------------------------------------------------------------------------------------------------------------
Variable investment option Objective Adviser
- ---------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Seeks to achieve high current income consis- Alliance Capital Management L.P.
Securities* tent with relative stability of principal
- ---------------------------------------------------------------------------------------------------------------------
* Please see the applicable charges and expenses under "The Trusts' annual
expenses" below.
(4) THE TRUSTS' ANNUAL EXPENSES
The following table sets forth the annual expenses for each portfolio as of
December 31, 2001.
2
THE TRUSTS' ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
Net
Total
Management Other Annual
Fees Expenses Expenses
(After expense (After expense (After expense
limitation)(1) 12b-1 Fees(2) limitation)(3) limitation)(4)
---------------- ----------------- ---------------- ----------------
AXA PREMIER VIP TRUST:
- ----------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.00% 0.25% 0.70% 0.95%
AXA Premier VIP Health Care 0.44% 0.25% 1.16% 1.85%
AXA Premier VIP International Equity 0.62% 0.25% 0.93% 1.80%
AXA Premier VIP Large Cap Core Equity 0.17% 0.25% 0.93% 1.35%
AXA Premier VIP Large Cap Growth 0.31% 0.25% 0.79% 1.35%
AXA Premier VIP Large Cap Value 0.08% 0.25% 1.02% 1.35%
AXA Premier VIP Small/Mid Cap Growth 0.42% 0.25% 0.93% 1.60%
AXA Premier VIP Small/Mid Cap Value 0.20% 0.25% 1.15% 1.60%
AXA Premier VIP Technology 0.58% 0.25% 1.02% 1.85%
- ----------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST:
- ----------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock 0.61% 0.25% 0.08% 0.94%
EQ/Alliance Common Stock 0.46% 0.25% 0.07% 0.78%
EQ/Alliance Global 0.73% 0.25% 0.12% 1.10%
EQ/Alliance Growth and Income 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Growth Investors 0.57% 0.25% 0.06% 0.88%
EQ/Alliance Intermediate Government Securities 0.50% 0.25% 0.12% 0.87%
EQ/Alliance International 0.85% 0.25% 0.25% 1.35%
EQ/Alliance Money Market 0.33% 0.25% 0.07% 0.65%
EQ/Alliance Premier Growth 0.84% 0.25% 0.06% 1.15%
EQ/Alliance Quality Bond 0.53% 0.25% 0.07% 0.85%
EQ/Alliance Small Cap Growth 0.75% 0.25% 0.06% 1.06%
EQ/Alliance Technology 0.82% 0.25% 0.08% 1.15%
EQ/AXP New Dimensions 0.00% 0.25% 0.70% 0.95%
EQ/AXP Strategy Aggressive 0.00% 0.25% 0.75% 1.00%
EQ/Balanced 0.57% 0.25% 0.08% 0.90%
EQ/Bernstein Diversified Value 0.61% 0.25% 0.09% 0.95%
EQ/Calvert Socially Responsible 0.00% 0.25% 0.80% 1.05%
EQ/Capital Guardian International 0.66% 0.25% 0.29% 1.20%
EQ/Capital Guardian Research 0.55% 0.25% 0.15% 0.95%
EQ/Capital Guardian US Equity 0.59% 0.25% 0.11% 0.95%
EQ/Emerging Markets Equity 0.87% 0.25% 0.68% 1.80%
EQ/Equity 500 Index 0.25% 0.25% 0.06% 0.56%
EQ/Evergreen Omega 0.00% 0.25% 0.70% 0.95%
EQ/FI Mid Cap 0.48% 0.25% 0.27% 1.00%
EQ/FI Small/Mid Cap Value 0.74% 0.25% 0.11% 1.10%
EQ/High Yield 0.60% 0.25% 0.07% 0.92%
EQ/International Equity Index 0.35% 0.25% 0.50% 1.10%
EQ/J.P. Morgan Core Bond 0.44% 0.25% 0.11% 0.80%
EQ/Janus Large Cap Growth 0.76% 0.25% 0.14% 1.15%
EQ/Lazard Small Cap Value 0.72% 0.25% 0.13% 1.10%
EQ/Marsico Focus 0.00% 0.25% 0.90% 1.15%
EQ/Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
EQ/MFS Emerging Growth Companies 0.63% 0.25% 0.09% 0.97%
EQ/MFS Investors Trust 0.58% 0.25% 0.12% 0.95%
EQ/MFS Research 0.63% 0.25% 0.07% 0.95%
EQ/Putnam Growth & Income Value 0.57% 0.25% 0.13% 0.95%
EQ/Putnam International Equity 0.71% 0.25% 0.29% 1.25%
EQ/Putnam Voyager 0.62% 0.25% 0.08% 0.95%
EQ/Small Company Index 0.25% 0.25% 0.35% 0.85%
- ----------------------------------------------------------------------------------------------------------------------
3
Notes:
(1) The management fees shown for each portfolio cannot be increased without a
vote of each portfolio's shareholders. See footnote (4) for any expense
limitation agreement information.
(2) Portfolio shares are all subject to fees imposed under the distribution
plans (the "Rule 12b-1 Plan") adopted by the Trusts pursuant to Rule 12b-1
under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts.
(3) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. Since initial seed capital was invested for
the EQ/Marsico Focus Portfolio on August 31, 2001, "Other Expenses" shown
have been annualized. Initial seed capital was invested for the Portfolios
on December 31, 2001 thus, "Other Expenses" shown are estimated. See
footnote (4) for any expense limitation agreement information.
(4) Equitable Life, the Trusts' manager, has entered into expense limitation
agreements with respect to certain Portfolios which are effective through
April 30, 2003. Under these agreements Equitable Life has agreed to waive
or limit its fees and assume other expenses of each of these Portfolios,
if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures and extraordinary expenses) to not more than the amounts
specified above as "Net Total Annual Expenses." Each portfolio may at a
later date make a reimbursement to Equitable Life for any of the
management fees waived or limited and other expenses assumed and paid by
Equitable Life pursuant to the expense limitation agreement provided that
the Portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such Portfolio. For more
information see the prospectus for each Trust. The following chart
indicates management fees and other expenses before any fee waivers and/or
expense reimbursements that would have applied to each Portfolio.
Portfolios that are not listed below do not have an expense limitation
arrangement in effect or the expense limitation arrangement did not result
in a fee waiver or reimbursement.
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- -----------------------------------------------------------------------------
AXA PREMIER VIP TRUST:
- -----------------------------------------------------------------------------
AXA Premier VIP Core Bond 0.60% 0.84%
AXA Premier VIP Health Care 1.20% 1.16%
AXA Premier VIP International
Equity 1.05% 0.93%
AXA Premier VIP Large Cap Core
Equity 0.90% 0.93%
AXA Premier VIP Large Cap Growth 0.90% 0.79%
AXA Premier VIP Large Cap Value 0.90% 1.02%
AXA Premier VIP Small/Mid Cap
Growth 1.10% 0.93%
AXA Premier VIP Small/Mid Cap
Value 1.10% 1.15%
AXA Premier VIP Technology 1.20% 1.02%
- -----------------------------------------------------------------------------
EQ ADVISORS TRUST:
- -----------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.06%
EQ/Alliance Technology 0.90% 0.08%
EQ/AXP New Dimensions 0.65% 1.06%
EQ/AXP Strategy Aggressive 0.70% 0.77%
Management Other expenses
Fees (before any (before any fee
fee waivers waivers and/or
and/or expense expense
Portfolio Name reimbursements) reimbursements)
- -----------------------------------------------------------------------------
EQ/Bernstein Diversified Value 0.65% 0.09%
EQ/Calvert Socially Responsible 0.65% 1.46%
EQ/Capital Guardian International 0.85% 0.29%
EQ/Capital Guardian Research 0.65% 0.15%
EQ/Capital Guardian US Equity 0.65% 0.11%
EQ/Emerging Markets Equity 1.15% 0.68%
EQ/Evergreen Omega 0.65% 0.99%
EQ/FI Mid Cap 0.70% 0.27%
EQ/FI Small/Mid Cap Value 0.75% 0.11%
EQ/International Equity Index 0.35% 0.50%
EQ/J.P. Morgan Core Bond 0.45% 0.11%
EQ/Janus Large Cap Growth 0.90% 0.14%
EQ/Lazard Small Cap Value 0.75% 0.13%
EQ/Marsico Focus 0.90% 2.44%
EQ/MFS Investors Trust 0.60% 0.12%
EQ/MFS Research 0.65% 0.07%
EQ/Putnam Growth & Income Value 0.60% 0.13%
EQ/Putnam International Equity 0.85% 0.29%
EQ/Putnam Voyager 0.65% 0.08%
- -----------------------------------------------------------------------------
4
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution is
invested in one of the variable investment options listed and a 5% annual
return is earned on the assets in that option.(1) Other than as indicated in
the next sentence, the charges used in the examples are the maximum aggregate
charges that can apply to any contract or investment option to which this
supplement relates (including the charge for any optional benefits available
under any contract to which this supplement relates, as well as the maximum
charges that would apply to the underlying portfolio). The annual
administrative charge used in the examples is based on the charges that apply
to a mix of estimated contract sizes, resulting in an estimated administrative
charge for the purpose of these examples of $0.006 per $1,000. If your contract
does not have an annual administrative charge and/or any optional benefit
charge and/or has lower charges than used in the examples, then the expenses
that apply to your contract would be lower than those shown below.
The examples assume the continuation of Total Annual Expenses (after expense
limitation) shown for each portfolio of EQ Advisors Trust in the table, above,
for the entire one, three, five and ten year periods included in the examples.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
If you surrender your contract at the end
of each period shown, the expenses
would be:
-------------------------------------------------
1 year 3 years 5 years 10 years
-------------------------------------------------
AXA Premier VIP Core Bond $ 111.12 $ 165.25 $ 211.98 $ 357.40
AXA Premier VIP Health Care $ 120.95 $ 194.16 $ 259.15 $ 441.28
AXA Premier VIP International Equity $ 120.40 $ 192.57 $ 256.58 $ 436.82
AXA Premier VIP Large Cap Core Equity $ 115.49 $ 178.17 $ 233.17 $ 395.65
AXA Premier VIP Large Cap Growth $ 115.49 $ 178.17 $ 233.17 $ 395.65
AXA Premier VIP Large Cap Value $ 115.49 $ 178.17 $ 233.17 $ 395.65
AXA Premier VIP Small/Mid Cap Growth $ 118.22 $ 186.19 $ 246.23 $ 418.76
AXA Premier VIP Small/Mid Cap Value $ 118.22 $ 186.19 $ 246.23 $ 418.76
AXA Premier VIP Technology $ 120.95 $ 194.16 $ 259.15 $ 441.28
EQ/Aggressive Stock $ 111.01 $ 164.93 $ 211.45 $ 356.42
EQ/Alliance Common Stock $ 109.27 $ 159.73 $ 202.87 $ 340.65
EQ/Alliance Global $ 112.76 $ 170.11 $ 219.97 $ 371.93
EQ/Alliance Growth and Income $ 110.36 $ 162.98 $ 208.24 $ 350.54
EQ/Alliance Growth Investors $ 110.36 $ 162.98 $ 208.24 $ 350.54
EQ/Alliance Intermediate Government Securities $ 110.25 $ 162.66 $ 207.70 $ 349.55
EQ/Alliance International $ 115.49 $ 178.17 $ 233.17 $ 395.65
EQ/Alliance Money Market $ 107.85 $ 155.49 $ 195.85 $ 327.65
EQ/Alliance Premier Growth $ 113.31 $ 171.72 $ 222.63 $ 376.72
EQ/Alliance Quality Bond $ 110.03 $ 162.01 $ 206.63 $ 347.58
EQ/Alliance Small Cap Growth $ 112.32 $ 168.82 $ 217.85 $ 368.07
EQ/Alliance Technology $ 113.31 $ 171.72 $ 222.63 $ 376.72
EQ/AXP New Dimensions $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/AXP Strategy Aggressive $ 111.67 $ 166.87 $ 214.65 $ 362.26
EQ/Balanced $ 110.58 $ 163.63 $ 209.31 $ 352.50
EQ/Bernstein Diversified Value $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/Calvert Socially Responsible $ 112.21 $ 168.49 $ 217.32 $ 367.11
EQ/Capital Guardian International $ 113.85 $ 173.34 $ 225.27 $ 381.49
EQ/Capital Guardian Research $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/Capital Guardian U.S. Equity $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/Emerging Markets Equity $ 120.40 $ 192.57 $ 256.58 $ 436.82
EQ/Equity 500 Index $ 106.86 $ 152.55 $ 190.97 $ 318.55
EQ/Evergreen Omega $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/FI Mid Cap $ 111.67 $ 166.87 $ 214.65 $ 362.26
EQ/FI Small/Mid Cap Value $ 112.76 $ 170.11 $ 219.97 $ 371.93
EQ/High Yield $ 110.79 $ 164.28 $ 210.38 $ 354.46
EQ/International Equity Index $ 112.76 $ 170.11 $ 219.97 $ 371.93
EQ/J.P. Morgan Core Bond $ 109.48 $ 160.38 $ 203.94 $ 342.64
EQ/Janus Large Cap Growth $ 113.31 $ 171.72 $ 222.63 $ 376.72
EQ/Lazard Small Cap Value $ 112.76 $ 170.11 $ 219.97 $ 371.93
EQ/Marsico Focus $ 113.31 $ 171.72 $ 222.63 $ 376.72
EQ/Mercury Basic Value Equity $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/MFS Emerging Growth Companies $ 111.34 $ 165.90 $ 213.05 $ 359.35
EQ/MFS Investors Trust $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/MFS Research $ 111.12 $ 165.25 $ 211.98 $ 357.40
If you do not surrender your contract at
the end of each period shown, the
expenses would be:
-------------------------------------------------
1 year 3 years 5 years 10 years
-------------------------------------------------
AXA Premier VIP Core Bond $ 31.12 $ 96.22 $ 165.80 $ 352.56
AXA Premier VIP Health Care $ 40.95 $ 124.16 $ 210.94 $ 436.87
AXA Premier VIP International Equity $ 40.40 $ 122.57 $ 208.48 $ 432.39
AXA Premier VIP Large Cap Core Equity $ 35.49 $ 108.62 $ 186.08 $ 391.01
AXA Premier VIP Large Cap Growth $ 35.49 $ 108.62 $ 186.08 $ 391.01
AXA Premier VIP Large Cap Value $ 35.49 $ 108.62 $ 186.08 $ 391.01
AXA Premier VIP Small/Mid Cap Growth $ 38.22 $ 116.31 $ 198.58 $ 414.24
AXA Premier VIP Small/Mid Cap Value $ 38.22 $ 116.31 $ 198.58 $ 414.24
AXA Premier VIP Technology $ 40.95 $ 124.16 $ 210.94 $ 436.87
EQ/Aggressive Stock $ 31.01 $ 95.91 $ 165.29 $ 351.58
EQ/Alliance Common Stock $ 29.27 $ 90.92 $ 157.07 $ 335.73
EQ/Alliance Global $ 32.76 $ 100.88 $ 173.45 $ 367.16
EQ/Alliance Growth and Income $ 30.36 $ 94.04 $ 162.21 $ 345.67
EQ/Alliance Growth Investors $ 30.36 $ 94.04 $ 162.21 $ 345.67
EQ/Alliance Intermediate Government Securities $ 30.25 $ 93.73 $ 161.70 $ 344.68
EQ/Alliance International $ 35.49 $ 108.62 $ 186.08 $ 391.01
EQ/Alliance Money Market $ 27.85 $ 86.86 $ 150.35 $ 322.66
EQ/Alliance Premier Growth $ 33.31 $ 102.43 $ 175.98 $ 371.98
EQ/Alliance Quality Bond $ 30.03 $ 93.11 $ 160.67 $ 342.70
EQ/Alliance Small Cap Growth $ 32.32 $ 99.64 $ 171.41 $ 363.29
EQ/Alliance Technology $ 33.31 $ 102.43 $ 175.98 $ 371.98
EQ/AXP New Dimensions $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/AXP Strategy Aggressive $ 31.67 $ 97.78 $ 168.35 $ 357.45
EQ/Balanced $ 30.58 $ 94.67 $ 163.24 $ 347.64
EQ/Bernstein Diversified Value $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/Calvert Socially Responsible $ 32.21 $ 99.33 $ 170.90 $ 362.32
EQ/Capital Guardian International $ 33.85 $ 103.98 $ 178.52 $ 376.77
EQ/Capital Guardian Research $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/Capital Guardian U.S. Equity $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/Emerging Markets Equity $ 40.40 $ 122.57 $ 208.48 $ 432.39
EQ/Equity 500 Index $ 26.86 $ 84.04 $ 145.68 $ 313.52
EQ/Evergreen Omega $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/FI Mid Cap $ 31.67 $ 97.78 $ 168.35 $ 357.45
EQ/FI Small/Mid Cap Value $ 32.76 $ 100.88 $ 173.45 $ 367.16
EQ/High Yield $ 30.79 $ 95.29 $ 164.26 $ 349.61
EQ/International Equity Index $ 32.76 $ 100.88 $ 173.45 $ 367.16
EQ/J.P. Morgan Core Bond $ 29.48 $ 91.55 $ 158.10 $ 337.73
EQ/Janus Large Cap Growth $ 33.31 $ 102.43 $ 175.98 $ 371.98
EQ/Lazard Small Cap Value $ 32.76 $ 100.88 $ 173.45 $ 367.16
EQ/Marsico Focus $ 33.31 $ 102.43 $ 175.98 $ 371.98
EQ/Mercury Basic Value Equity $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/MFS Emerging Growth Companies $ 31.34 $ 96.85 $ 166.82 $ 354.52
EQ/MFS Investors Trust $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/MFS Research $ 31.12 $ 96.22 $ 165.80 $ 352.56
5
If you surrender your contract at the end
of each period shown, the expenses
would be:
-------------------------------------------------
1 year 3 years 5 years 10 years
-------------------------------------------------
EQ/Putnam Growth & Income Value $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/Putnam International Equity $ 114.40 $ 174.95 $ 227.91 $ 386.23
EQ/Putnam Voyager $ 111.12 $ 165.25 $ 211.98 $ 357.40
EQ/Small Company Index $ 110.03 $ 162.01 $ 206.63 $ 347.58
If you do not surrender your contract at
the end of each period shown, the
expenses would be:
-------------------------------------------------
1 year 3 years 5 years 10 years
-------------------------------------------------
EQ/Putnam Growth & Income Value $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/Putnam International Equity $ 34.40 $ 105.53 $ 181.04 $ 381.54
EQ/Putnam Voyager $ 31.12 $ 96.22 $ 165.80 $ 352.56
EQ/Small Company Index $ 30.03 $ 93.11 $ 160.67 $ 342.70
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money" in
your prospectus.
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $5.44 based on the average amount applied to annuity payout
options in 2001. See "Annuity administrative fee" in "Charges and expenses," in
your prospectus.
(5) DISRUPTIVE TRANSFER ACTIVITY
The following reflects Equitable's current policy with regard to market
timing-related transaction requests.
You should note that the Accumulator Series contracts are not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying portfolio. These kinds of strategies and transfer activities
are disruptive to the underlying portfolios in which the variable investment
options invest. If we determine that your transfer patterns among the variable
investment options are disruptive to the underlying portfolios, we may, among
other things, restrict the availability of personal telephone requests,
facsimile transmissions, automated telephone services, Internet services or any
electronic transfer services. We may also refuse to act on transfer
instructions of an agent acting under a power of attorney who is acting on
behalf of one or more owners. In making these determinations, we may consider
the combined transfer activity of annuity contracts and life insurance policies
that we believe are under common ownership, control or direction.
We currently consider transfers into and out of (or vice versa) the same
variable investment option within a five business day period as potentially
disruptive transfer activity. In order to prevent disruptive activity, we
monitor the frequency of transfers, including the size of transfers in relation
to portfolio assets, in each underlying portfolio, and we take appropriate
action, which may include the actions described above to restrict availability
of voice, fax and automated transaction services, when we consider the activity
of owners to be disruptive. We currently provide a letter to owners who have
engaged in such activity of our intention to restrict such services. However,
we may not continue to provide such letters. We may also, in our sole
discretion and without further notice, change what we consider disruptive
transfer activity, as well as change our procedures to restrict this activity.
(6) BENEFICIARY CONTINUATION OPTION
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. We require this
election to be made within nine months following the date we receive proof of
your death and before any other inconsistent election is made.
We will increase the account value as of the date we receive satisfactory proof
of death, any required instructions, information and forms necessary to effect
the beneficiary continuation option feature, to equal the applicable guaranteed
minimum death benefit as of the date of your death, if such death benefit is
greater than such account value, plus any amount applicable under the
Protection Plus feature, and adjusted for any subsequent withdrawals. The
beneficiary continuation option is available if we have received regulatory
clearance in your state. Where an IRA contract is owned in a custodial
individual retirement account, the custodian may reinvest the death benefit in
an appropriate individual retirement annuity contract, using the account
beneficiary as the annuitant. Please contact our processing office for further
information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit, if applicable, and the death benefit
provisions (including any guaranteed minimum death benefit) will no longer
be in effect.
6
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, generally, any remaining interest in the
contract will be paid in a lump sum to the person named by the beneficiary
(when we receive satisfactory proof of death, any required instructions for
the method of payment and the information and forms necessary to effect
payment), unless such person elects to continue the payment method elected
by the beneficiary.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your
death, and determined on a term certain basis). These payments must begin no
later than December 31st of the calendar year after the year of your death.
However, if you die before your Required Beginning Date for Required Minimum
Distributions, as discussed in "Tax information" in your prospectus and SAI,
your beneficiary may choose the "5-year rule" instead of annual payments over
life expectancy. If your beneficiary chooses this, your beneficiary may take
withdrawals as desired, but the entire account value must be fully withdrawn by
December 31st of the 5th calendar year after your death.
(7) TAX INFORMATION
The discussion in the prospectus is amended to reflect changes due to the
Economic Growth and Tax Relief Reconciliation Act of 2001, and proposed
revisions to the proposed required minimum distribution Treasury Regulations.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (IRAS) AND ROTH INDIVIDUAL
RETIREMENT ANNUITIES (ROTH IRAS)
ADDITIONAL "SAVER'S CREDIT" FOR CONTRIBUTIONS TO A TRADITIONAL IRA OR ROTH
IRA. Beginning in 2002, you may be eligible for a nonrefundable income tax
credit for contributions you make to a traditional IRA or Roth IRA. If you
qualify, you may take this credit even though your traditional IRA contribution
is already fully or partially deductible. To take advantage of this "saver's
credit" you must be age 18 or over before the end of 2002, you cannot be a
full-time student or claimed as a dependent on another's tax return, and your
adjusted gross income cannot exceed $50,000. The amount of the tax credit you
can get varies from 10% of your contribution to 50% of your contribution, and
depends on your income tax filing status and your adjusted gross income. The
maximum annual contribution eligible for the saver's credit is $2,000. If you
and your spouse file a joint return, and each of you qualifies, each is
eligible for a maximum annual contribution of $2,000. Your saver's credit may
also be reduced if you take or have taken a taxable distribution from any plan
eligible for a saver's credit contribution--even if you make a contribution to
one plan and take the distribution from another plan--during the "testing
period." The "testing period" begins two years before the year for which you
make the contribution and ends when your tax return is due for the year for
which you make the contribution. Saver's-credit-eligible contributions may be
made to a 401(k) plan, 403(b) TSA, governmental 457(b) plan, SIMPLE IRA or
SARSEP IRA, as well as a traditional IRA or Roth IRA.
CONTRIBUTIONS
INCREASED LIMITS ON REGULAR CONTRIBUTIONS TO BOTH TYPES OF IRAS.
The maximum amount of regular contributions to all IRAs for any individual
(including both traditional and Roth IRAs) for 2002 has been increased from
$2,000 to $3,000. If the traditional IRA owner is at least age 50 but under age
70-1/2 at any time during 2002 an additional catch-up contribution of up to $500
more for 2002 may be made. For Roth IRAs, an additional catch-up contribution
of up to $500 more for 2002 may be made if the Roth IRA owner is at least age
50 at any time during 2002.
If the traditional IRA owner is single and covered by a retirement plan during
any part of the taxable year, the deduction for traditional IRA contributions
phases out with AGI between $34,000 and $44,000 in 2002. If the traditional
IRA owner is married, files a joint return and is covered by a retirement plan
during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $54,000 and $64,000 in 2002.
ROLLOVER CONTRIBUTIONS TO TRADITIONAL IRAS AND ROLLOVER TSAS
Beginning in 2002, rollover contributions may be made to a traditional IRA (but
not a Roth IRA) or a Rollover TSA from "eligible retirement plans" which
include traditional IRAs, TSAs, qualified plans and governmental 457(b) plans
(also known as "governmental EDC plans").
Rollover contributions to traditional IRAs were historically limited to pre-tax
funds. Beginning in 2002, after-tax contributions to a qualified plan or TSA
may be rolled over to a traditional IRA (but not a Roth IRA). You should be
aware before you roll over any after-tax contributions that you are responsible
for calculating the taxable amount of any distributions you take from the
traditional IRA.
We do not accept rollover contributions of after-tax funds to Accumulator(R)
Rollover TSA contracts.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another because
the funds will generally be subject to the rules of the recipient plan and the
features of the current plan may no longer be available. For example,
distributions from a governmental 457(b) plan are generally not subject to the
additional 10-percent federal income tax penalty for pre-
7
age 59-1/2 distributions. If you roll over funds from a governmental 457(b) plan
into an eligible retirement plan which is not a governmental 457(b) plan (such
as a traditional IRA or TSA), any subsequent distributions may be subject to
this penalty.
ROLLOVERS BETWEEN ELIGIBLE RETIREMENT PLANS
Historically, a rollover from a traditional IRA could only be made to a
qualified plan (or TSA) if the traditional IRA served as a "conduit" for only
qualified plan (or only TSA) funds. Historically, a rollover from a TSA could
only be made to another TSA or a traditional IRA. Beginning in 2002, these
rules have been substantially liberalized. Eligible rollover distributions from
qualified plans, TSAs, governmental 457(b) plans and traditional IRAs may be
rolled over into other such plans. A surviving spouse beneficiary may roll over
funds from the deceased spouse's traditional IRA or TSA into these "eligible
retirement plans."
The recipient eligible retirement plan must agree to take the distribution. An
eligible retirement plan is not legally required to accept a rollover. Before
you decide to roll over your distribution to another eligible retirement plan,
you should find out whether the plan accepts rollover contributions from other
plan types and, if so, the types of distributions it accepts as rollover
contributions. You should also find out about any documents that are required
to be completed before the receiving plan will accept a rollover. Check with
the administrator of the plan that is to receive your rollover prior to making
the rollover. If an eligible retirement plan accepts your rollover, the plan
may restrict subsequent distributions of the rollover amount or may require
your spouse's consent for any subsequent distribution. A subsequent
distribution from the plan that accepts your rollover may also be subject to
different tax treatment than distributions from your traditional IRA or TSA.
If you roll a distribution from your traditional IRA or TSA into a governmental
457(b) plan, the recipient governmental 457(b) plan must agree to separately
account for the rolled-over funds. Even though distributions from a
governmental 457(b) plan are generally not subject to the additional 10-percent
federal income tax penalty for pre-age 59-1/2 distributions, any subsequent
distributions from the governmental 457(b) plan attributable to the IRA or TSA
funds rolled over continue to be subject to this penalty.
ROLLOVERS OF AFTER-TAX CONTRIBUTIONS FROM CERTAIN ELIGIBLE RETIREMENT PLANS
Beginning in 2002, under certain circumstances, you may roll over any after-tax
contributions you have made to a TSA to another qualified plan or TSA which
agrees to do required separate accounting, or to a traditional IRA. This does
not apply to Accumulator(R) Rollover TSA contracts, as we do not accept
rollover contributions of after-tax funds, and we treat all funds directly
transferred to Accumulator(R) Rollover TSA contracts as pre-tax funds.
After-tax contributions in a traditional IRA cannot be rolled from your
traditional IRA into, or back into, a qualified plan, TSA or governmental
457(b) plan.
REQUIRED MINIMUM DISTRIBUTIONS
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions -- "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA, as of December 31st of the past calendar year,
by a number corresponding to your age from an IRS table. This gives you the
required minimum distribution amount for that particular IRA for that year. If
your spouse is your sole beneficiary and more than 10 years younger than you,
the dividing number you use may be from another IRS table and may produce a
smaller lifetime required minimum distribution amount. Regardless of the table
used, the required minimum distribution amount will vary each year as the
account value and the divisor change.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life, the joint lives of you and a designated beneficiary or for a period
certain not extending beyond applicable life expectancies.
If you initially choose an account-based method, you may be able to apply your
traditional IRA funds later to a life annuity-based payout, with any certain
period not exceeding remaining life expectancy.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? These could
vary depending on whether you die before or after your Required Beginning Date
for lifetime required minimum distribution payments and on the status of your
beneficiary.
INDIVIDUAL BENEFICIARY. Regardless of whether your death occurs before or after
your Required Beginning Date, under the revised proposed rules an individual
death beneficiary calculates annual post-death required minimum distribution
payments based on the beneficiary's life expectancy using the "term certain
method." That is, he or she determines his or her life expectancy using the
life expectancy tables as of the calendar year after the owner's death and
reduces that number by one each subsequent year.
If you die before your Required Beginning Date, the revised proposed rules
permit any individual beneficiary, including a spousal beneficiary, to elect
instead to apply the "5-year rule." Under this rule, instead of annual payments
having to be made beginning with the first in the year following the owner's
death, the entire account must be distributed by the end of the fifth year
following the year of the owner's death. No distribution is required for a year
before that fifth year.
8
SPOUSAL BENEFICIARY. If you die after your Required Beginning Date, and your
death beneficiary is your surviving spouse, your spouse has a number of
choices. The revised proposed rules permit post-death distributions to be made
over your spouse's single life expectancy. Any amounts distributed after that
surviving spouse's death are made over the spouse's life expectancy calculated
in the year of his/her death, reduced by one for each subsequent year. In some
circumstances, your surviving spouse may elect to become the owner of the
traditional IRA and halt distributions until he or she reaches age 70-1/2, or
roll over amounts from your traditional IRA into his/her own traditional IRA or
other eligible retirement plan.
If you die before your Required Beginning Date, and the death beneficiary is
your surviving spouse, the revised proposed rules permit the spouse to delay
starting payments over his/her life expectancy until the year in which you
would have attained age 70-1/2.
NON-INDIVIDUAL BENEFICIARY. If you die after your Required Beginning Date, and
your death beneficiary is a non-individual such as the estate, the revised
proposed rules permit the beneficiary to calculate post-death required minimum
distribution amounts based on the owner's life expectancy in the year of death.
HOWEVER, NOTE THAT WE NEED AN INDIVIDUAL ANNUITANT TO KEEP AN ANNUITY
CONTRACT/CERTIFICATE IN FORCE. IF THE BENEFICIARY IS NOT AN INDIVIDUAL, WE MUST
DISTRIBUTE AMOUNTS REMAINING IN THE ANNUITY CONTRACT AFTER THE DEATH OF THE
ANNUITANT.
If you die before your Required Beginning Date for lifetime required minimum
distribution payments, and the death beneficiary is a non-individual such as
the estate, the revised proposed rules continue to apply the 5-year rule
discussed above under "Individual beneficiary." PLEASE NOTE THAT WE NEED AN
INDIVIDUAL ANNUITANT TO KEEP AN ANNUITY CONTRACT/CERTIFICATE IN FORCE. IF THE
BENEFICIARY IS NOT AN INDIVIDUAL, WE MUST DISTRIBUTE AMOUNTS REMAINING IN THE
ANNUITY CONTRACT AFTER THE DEATH OF THE ANNUITANT.
9
(8) CONDENSED FINANCIAL INFORMATION
The following table sets forth the unit values and number of units outstanding
at the year end for each variable investment option, except those options
offered for the first time after December 31, 2001. The table shows unit values
based on the lowest and highest charges that would apply to any contract or
investment option to which this supplement relates, including the lowest and
highest charges that would apply to the underlying portfolios. Therefore, if
your contract has different charges than those assumed, your unit values will
be different than those shown. Please refer to the SAI for a complete
presentation of the unit values and units outstanding. The table also shows the
total number of units outstanding for all contracts to which this supplement
relates.
The unit values and number of units outstanding shown below are for contracts
offered under Separate Accounts 45 and 49 with the same daily asset charges of
0.50%.
For the years
ending December 31,
2001 2000
EQ/Aggressive Stock
Unit value $ 58.69 $ 78.83
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance Common Stock
Unit value $271.84 $ 306.09
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance Global
Unit value $ 31.62 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance Growth and Income
Unit value $ 27.40 --
Separate Account 45 number of units outstanding (000's) 4 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance Growth Investors
Unit value $ 38.15 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance Intermediate Government Securities
Unit value $ 18.84 --
Separate Account 45 number of units outstanding (000's) 8 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance International
Unit value $ 10.22 --
Separate Account 45 number of units outstanding (000's) 3 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance Money Market
Unit value $ 34.09 $ 33.08
Separate Account 45 number of units outstanding (000's) 19 --
Separate Account 49 number of units outstanding (000's) 124 --
EQ/Alliance Premier Growth
Unit value $ 7.29 $ 9.63
Separate Account 45 number of units outstanding (000's) 3 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Alliance Small Cap Growth
Unit value $ 14.86 $ 17.22
Separate Account 45 number of units outstanding (000's) 4 --
Separate Account 49 number of units outstanding (000's) -- --
10
For the years
ending December 31,
2001 2000
EQ/Alliance Technology
Unit value $ 5.00 $ 6.65
Separate Account 45 number of units outstanding (000's) 9 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/AXP New Dimensions
Unit value $ 6.99 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/AXP Strategy Aggressive
Unit value $ 4.12 --
Separate Account 45 number of units outstanding (000's) 4 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Balanced
Unit value $46.74 --
Separate Account 45 number of units outstanding (000's) 3 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Bernstein Diversified Value
Unit value $12.31 $ 12.01
Separate Account 45 number of units outstanding (000's) 10 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Calvert Socially Responsible
Unit value $ 8.85 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Capital Guardian International
Unit value $ 8.90 $ 11.30
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Capital Guardian Research
Unit value $10.97 $ 11.25
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Capital Guardian U. S. Equity
Unit value $10.39 $ 10.66
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Emerging Markets Equity
Unit value $ 6.34 $ 6.72
Separate Account 45 number of units outstanding (000's) 2 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Equity 500 Index
Unit value $26.11 $ 29.88
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Evergreen Omega
Unit value $ 7.92 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
11
For the years
ending December 31,
2001 2000
EQ/FI Mid Cap
Unit value $ 8.64 $ 10.03
Separate Account 45 number of units outstanding (000's) 6 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/FI Small/Mid Cap Value
Unit value $11.66 $ 11.27
Separate Account 45 number of units outstanding (000's) 13 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/High Yield
Unit value $27.00 $ 26.95
Separate Account 45 number of units outstanding (000's) 2 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/International Equity Index
Unit value $ 9.21 $ 12.42
Separate Account 45 number of units outstanding (000's) 5 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/J.P. Morgan Core Bond
Unit value $12.65 $ 11.78
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Janus Large Cap Growth
Unit value $ 6.45 $ 8.42
Separate Account 45 number of units outstanding (000's) 10 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Lazard Small Cap Value
Unit value $12.93 $ 11.04
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Marisco Focus
Unit value $11.37 --
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Mercury Basic Value Equity
Unit value $17.90 --
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/MFS Emerging Growth Companies
Unit value $14.96 $ 22.79
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/MFS Investors Trust
Unit value $ 8.94 $ 10.69
Separate Account 45 number of units outstanding (000's) 2 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/MFS Research
Unit value $12.83 $ 16.49
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Putnam Growth & Income Value
Unit value $12.57 $ 13.56
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
12
For the years
ending December 31,
2001 2000
EQ/Putnam International Equity
Unit value $ 14.10 $ 18.06
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Putnam Investors Growth
Unit value $ 13.43 $ 17.87
Separate Account 45 number of units outstanding (000's) -- --
Separate Account 49 number of units outstanding (000's) -- --
EQ/Small Company Index
Unit value $ 11.40 $ 11.22
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
EQ/T. Rowe Price International Stock
Unit value $ 9.17 --
Separate Account 45 number of units outstanding (000's) 1 --
Separate Account 49 number of units outstanding (000's) -- --
13
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 49 with the same daily asset charges of 1.90%.
For the years ending December 31,
2001
EQ/Aggressive Stock
Unit value $ 46.83
Separate Account 49 number of units outstanding (000's) --
EQ/Alliance Common Stock
Unit value $188.32
Separate Account 49 number of units outstanding (000's) 1
EQ/Alliance High Yield
Unit value $ 21.83
Separate Account 49 number of units outstanding (000's) --
EQ/Alliance Money Market
Unit value $ 25.51
Separate Account 49 number of units outstanding (000's) 217
EQ/Alliance Premier Growth
Unit value $ 7.02
Separate Account 49 number of units outstanding (000's) 27
EQ/Alliance Small Cap Growth
Unit value $ 13.91
Separate Account 49 number of units outstanding (000's) 7
EQ/Alliance Technology
Unit value $ 4.88
Separate Account 49 number of units outstanding (000's) 5
EQ/Balanced
Unit value $ 37.29
Separate Account 49 number of units outstanding (000's) 4
EQ/Bernstein Diversified Value
Unit value $ 11.64
Separate Account 49 number of units outstanding (000's) 16
EQ/Calvert Socially Responsible
Unit value $ 8.56
Separate Account 49 number of units outstanding (000's) --
EQ/Capital Guardian International
Unit value $ 8.57
Separate Account 49 number of units outstanding (000's) 41
EQ/Capital Guardian Research
Unit value $ 10.56
Separate Account 49 number of units outstanding (000's) 13
EQ/Equity 500 Index
Unit value $ 23.37
Separate Account 49 number of units outstanding (000's) 11
EQ/Evergreen Omega
Unit value $ 7.59
Separate Account 49 number of units outstanding (000's) --
EQ/FI Mid Cap
Unit value $ 8.48
Separate Account 49 number of units outstanding (000's) 5
EQ/FI Small/Mid Cap Value
Unit value $ 10.91
Separate Account 49 number of units outstanding (000's) 14
14
For the years ending December 31,
2001
EQ/International Equity Index
Unit value $ 8.71
Separate Account 49 number of units outstanding (000's) 26
EQ/J.P. Morgan Core Bond
Unit value $11.96
Separate Account 49 number of units outstanding (000's) 31
EQ/Janus Large Cap Growth
Unit value $ 6.33
Separate Account 49 number of units outstanding (000's) 6
EQ/Lazard Small Cap Value
Unit value $12.22
Separate Account 49 number of units outstanding (000's) 14
EQ/Marisco Focus
Unit value $11.32
Separate Account 49 number of units outstanding (000's) 2
EQ/Mercury Basic Value Equity
Unit value $16.76
Separate Account 49 number of units outstanding (000's) 9
EQ/MFS Emerging Growth Companies
Unit value $14.00
Separate Account 49 number of units outstanding (000's) 1
EQ/MFS Investors Trust
Unit value $ 8.56
Separate Account 49 number of units outstanding (000's) 6
EQ/MFS Research
Unit value $12.01
Separate Account 49 number of units outstanding (000's) 7
EQ/Putnam Growth & Income Value
Unit value $11.77
Separate Account 49 number of units outstanding (000's) 19
EQ/Putnam International Equity
Unit value $13.20
Separate Account 49 number of units outstanding (000's) 18
EQ/Putnam Investors Growth
Unit value $12.57
Separate Account 49 number of units outstanding (000's) 4
EQ/Small Company Index
Unit value $10.77
Separate Account 49 number of units outstanding (000's) 1
15
(9) INVESTMENT PERFORMANCE
The following table shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment options for the periods shown.
The table takes into account the maximum current fees and charges applicable to
all contracts to which this supplement applies, including any optional benefits
charges, which may or may not be available under your contract. The table does
not reflect the charges designed to approximate certain taxes imposed on us,
such as premium taxes in your state or any applicable annuity administrative
fee.
The results shown under "length of option period" are based on the actual
historical investment experience of each variable investment option since its
inception. The results shown under "length of portfolio period" include some
periods when a variable investment option investing in the Portfolio had not
yet commenced operations. For those periods, we adjusted the results of the
portfolios to reflect the charges under the contracts that would have applied
had the investment options been available.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), we have adjusted the results prior to October 1996,
when Class IB/B shares for these portfolios were not available, to reflect the
12b-1 fees currently imposed. Finally, the results shown for the EQ/Alliance
Money Market and EQ/Alliance Common Stock options for period before March 22,
1985 reflect the results of the variable investment options that preceded them.
The "Since portfolio inception" figures for these options are based on the
inception of the preceding variable investment options. We have adjusted these
results to reflect the maximum investment advisory fee payable for the
portfolios, as an assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the EQ/Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) were part of The Hudson River Trust. On
October 18, 1999, these portfolios became corresponding portfolios of EQ
Advisors Trust. In each case, the performance shown is for the indicated EQ
Advisors Trust portfolio and any predecessors that it may have had.
AXA Premier VIP Trust commenced operations on December 31, 2001, and
performance information for these portfolios is not available as of the date of
this prospectus.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
THE PERFORMANCE INFORMATION SHOWN BELOW AND PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
16
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period Length of portfolio period
------------------------------------------ --------------------------------------------------
Since
Since option portfolio
Variable investment options 1 Year 5 Years inception* 3 Years 5 Years 10 Years inception**
- ---------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock (20.36)% 7.21% 7.89% ( 6.54)% 7.21% 9.99% 11.36%
EQ/Alliance Common Stock (29.71)% 1.32% 1.91% ( 8.80)% 1.32% 5.96% 6.18%
EQ/Alliance Global (11.33)% 11.52% -- 3.48% 11.52% -- 10.79%
EQ/Alliance Growth Investors (32.69)% (5.52)% -- (12.07)% (5.52)% -- ( 1.61)%
EQ/Alliance Money Market (33.34)% -- (16.58)% -- -- -- (16.57)%
EQ/Alliance Premier Growth ( 1.94)% 4.17% -- 0.69% 4.17% -- 3.31%
EQ/Alliance Small Cap Growth (33.81)% -- (41.75)% -- -- -- (41.75)%
EQ/Alliance Technology (25.05)% -- -- -- -- -- (31.66)%
EQ/Bernstein Diversified Value ( 6.77)% -- 2.95% ( 3.43)% -- -- 2.95%
EQ/Capital Guardian International (30.32)% -- ( 9.28)% -- -- -- ( 9.28)%
EQ/Capital Guardian Research (11.79)% -- ( 1.19)% -- -- -- ( 1.20)%
EQ/Capital Guardian U.S. Equity (11.78)% -- ( 3.35)% -- -- -- ( 3.36)%
EQ/Emerging Markets Equity (14.87)% -- ( 8.20)% ( 1.18)% -- -- (12.46)%
EQ/Equity 500 Index (21.75)% 7.45% 8.12% ( 6.70)% 7.45% -- 10.93%
EQ/Evergreen Omega (26.51)% -- (12.35)% (12.35)% -- -- (12.35)%
EQ/FI Mid Cap (22.98)% -- (17.62)% -- -- -- (18.27)%
EQ/FI Small/Mid Cap Value ( 5.88)% -- 1.24% ( 1.24)% -- -- 1.19%
EQ/High Yield ( 9.13)% (2.85)% ( 2.18)% ( 9.22)% (2.85)% 4.37% 4.71%
EQ/International Equity Index (34.81)% -- ( 4.53)% (13.20)% -- -- ( 4.53)%
EQ/J.P. Morgan Core Bond ( 2.01)% -- 3.66% 0.98% -- -- 3.66%
EQ/Janus Large Cap Growth (32.36)% -- (35.64)% -- -- -- (36.14)%
EQ/Lazard Small Cap Value 7.61% -- 4.21% 7.75% -- -- 4.21%
EQ/Mercury Basic Value Equity ( 4.38)% -- 11.23% 7.34% -- -- 11.23%
EQ/MFS Emerging Growth Companies (43.25)% -- 6.99% ( 7.44)% -- -- 6.99%
EQ/MFS Investors Trust (25.50)% -- ( 8.33)% ( 8.33)% -- -- ( 8.33)%
EQ/MFS Research (31.23)% -- 3.41% ( 8.13)% -- -- 3.41%
EQ/Putnam Growth & Income Value (16.50)% -- 2.92% ( 5.65)% -- -- 2.92%
EQ/Putnam International Equity (30.94)% -- 5.58% ( 1.51)% -- -- 5.58%
EQ/Putnam Voyager (33.83)% -- 4.48% (12.11)% -- -- 4.48%
EQ/Small Company Index ( 7.79)% -- 0.88% 1.20% -- -- 0.88%
* The variable investment option inception dates are: EQ/Aggressive Stock,
EQ/Alliance Common Stock, EQ/Alliance Global, EQ/Alliance Growth Investors,
EQ/Alliance Money Market, EQ/Equity 500 Index and EQ/High Yield (October
16, 1996); EQ/Alliance Small Cap Growth, EQ/Mercury Basic Value Equity,
EQ/MFS Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity and EQ/Putnam Voyager
(May 1, 1997); EQ/Emerging Markets Equity (December 31, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Alliance Technology (May 1, 2000); EQ/FI Mid Cap, EQ/FI Small/Mid Cap
Value and EQ/Janus Large Cap Growth (September 5, 2000); EQ/Balanced (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Growth and Income, EQ/Alliance
International, EQ/Alliance Quality Bond, EQ/AXP New Dimensions and EQ/AXP
Strategy Aggressive (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May
1, 1997); EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Calvert Socially Responsible (September 1, 1999); EQ/Alliance Technology
(May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid
Cap and EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus
(August 31, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care,
AXA Premier VIP International Equity, AXA Premier VIP Large Cap Core
Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value,
AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value
and AXA Premier VIP Technology (December 31, 2001). No performance
information is provided for portfolios and/or variable investment options
with inception dates after December 31, 2000.
17
TABLE FOR SEPARATE ACCOUNT 45
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2001:
Length of option period
-------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- ----------------------------------------------------------------------------------------------
EQ/Aggressive Stock (34.38)% (5.84)% 1.76%
EQ/Alliance Common Stock (20.18)% 7.21% 11.79%
EQ/Alliance Global (29.55)% 1.32% 4.97%
EQ/Alliance Growth and Income (11.13)% 11.53% 13.60%
EQ/Alliance Growth Investors (22.03)% 4.75% 7.71%
EQ/Alliance Intermediate Government Securities ( 1.85)% 3.60% 4.08%
EQ/Alliance International (32.54)% (5.52)% ( 1.61)%
EQ/Alliance Money Market ( 6.10)% 2.31% 2.70%
EQ/Alliance Premier Growth (33.19)% -- (16.39)%
EQ/Alliance Small Cap Growth (22.63)% -- 6.80%
EQ/Alliance Technology (33.66)% -- (41.61)%
EQ/AXP New Dimensions (24.87)% -- (30.72)%
EQ/AXP Strategy Aggressive (24.87)% -- (30.72)%
EQ/Capital Guardian Research (30.16)% -- --
EQ/Capital Guardian U.S. Equity (11.59)% -- ( 0.97)%
EQ/Emerging Markets Equity (11.58)% -- ( 3.14)%
EQ/Equity 500 Index (14.68)% -- (11.22)%
EQ/Evergreen Omega (21.58)% 7.45% 11.51%
EQ/FI Mid Cap (26.35)% -- (12.16)%
EQ/FI Small/Mid Cap Value (22.80)% -- (17.43)%
EQ/High Yield ( 5.67)% -- 1.16%
EQ/International Equity Index ( 8.93)% (2.85)% 2.33%
EQ/Janus Large Cap Growth ( 1.79)% -- --
EQ/Mercury Basic Value Equity -- -- 4.99%
EQ/MFS Emerging Growth Companies ( 4.16)% -- 11.23%
EQ/MFS Investors Trust (43.11)% -- 6.99%
EQ/MFS Research (25.33)% -- ( 8.12)%
EQ/Putnam Growth & Income Value (31.08)% -- 3.41%
EQ/Small Company Index (33.67)% -- --
Length of portfolio period
--------------------------------------------------------
Since portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- -----------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock (13.60)% (5.84)% 1.71% 9.83%
EQ/Alliance Common Stock ( 6.33)% 7.21% 10.22% 11.59%
EQ/Alliance Global ( 8.59)% 1.32% 6.18% 6.40%
EQ/Alliance Growth and Income 3.71% 11.53% -- 11.02%
EQ/Alliance Growth Investors ( 3.85)% 4.75% 6.58% 9.60%
EQ/Alliance Intermediate Government Securities 0.88% 3.60% 3.46% 4.16%
EQ/Alliance International (11.87)% (5.52)% -- ( 1.41)%
EQ/Alliance Money Market 0.14% 2.31% 2.19% 4.19%
EQ/Alliance Premier Growth -- -- -- (16.38)%
EQ/Alliance Small Cap Growth 3.49% -- -- 6.80%
EQ/Alliance Technology -- -- -- (41.61)%
EQ/AXP New Dimensions -- -- -- (31.49)%
EQ/AXP Strategy Aggressive -- -- -- (31.49)%
EQ/Capital Guardian Research -- -- -- ( 9.08)%
EQ/Capital Guardian U.S. Equity -- -- -- ( 0.98)%
EQ/Emerging Markets Equity -- -- -- ( 3.14)%
EQ/Equity 500 Index ( 0.96)% -- -- (12.83)%
EQ/Evergreen Omega ( 6.50)% 7.45% -- 11.16%
EQ/FI Mid Cap (12.15)% -- -- (12.15)%
EQ/FI Small/Mid Cap Value -- -- -- (18.08)%
EQ/High Yield ( 1.03)% -- -- 1.16%
EQ/International Equity Index ( 9.02)% (2.85)% 4.58% 4.93%
EQ/Janus Large Cap Growth 1.21% -- -- 3.66%
EQ/Mercury Basic Value Equity -- -- -- 5.31%
EQ/MFS Emerging Growth Companies 7.57% -- -- 11.23%
EQ/MFS Investors Trust ( 7.23)% -- -- 6.99%
EQ/MFS Research ( 8.12)% -- -- ( 8.12)%
EQ/Putnam Growth & Income Value ( 7.93)% -- -- 3.41%
EQ/Small Company Index (11.91)% -- -- 4.48%
* The variable option inception dates are: EQ/Aggressive Stock, EQ/Alliance
Common Stock, EQ/Alliance Global, EQ/Alliance Growth and Income,
EQ/Alliance Growth Investors, EQ/Alliance Intermediate Government
Securities, EQ/Alliance International, EQ/Alliance Money Market, EQ/Equity
500 Index and EQ/High Yield (May 1, 1995); EQ/Alliance Small Cap Growth,
EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS Emerging
Growth Companies, EQ/MFS Research and EQ/Putnam Growth & Income Value (May
1, 1997); EQ/Emerging Markets Equity (September 2, 1997); EQ/International
Equity Index and EQ/Small Company Index (January 1, 1998); EQ/Evergreen
Omega and EQ/MFS Investors Trust (January 1, 1999); EQ/Alliance Premier
Growth, EQ/Capital Guardian Research and EQ/Capital Guardian U.S. Equity
(May 1, 1999); EQ/Alliance Technology (May 1, 2000); EQ/AXP New Dimensions,
EQ/AXP Strategy Aggressive, EQ/FI Mid Cap, and EQ/Janus Large Cap Growth
(September 5, 2000); EQ/Balanced and EQ/Bernstein Diversified Value (May
18, 2001); EQ/Calvert Socially Responsible and EQ/Marsico Focus (September
4, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care, AXA
Premier VIP International Equity, AXA Premier VIP Large Cap Core Equity,
AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value, AXA
Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value, AXA
Premier VIP Technology, EQ/Alliance Quality Bond, EQ/Capital Guardian
International, EQ/J.P. Morgan Core Bond, EQ/Lazard Small Cap Value,
EQ/Putnam International Equity and EQ/Putnam Voyager (January 14,
2002). No performance information is provided for portfolios and/or
variable investment options with inception dates after December 31, 2000.
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: EQ/Alliance Common Stock (January 13, 1976); EQ/Alliance Money Market
(July 13, 1981); EQ/Aggressive Stock and EQ/Balanced (January 27, 1986);
EQ/High Yield (January 2, 1987); EQ/Alliance Global (August 27, 1987):
EQ/Alliance Growth Investors (October 2, 1989); EQ/Alliance Intermediate
Government Securities (April 1, 1991); EQ/Alliance Growth and Income and
EQ/Alliance Quality Bond (October 1, 1993); EQ/Equity 500 Index (March 1,
1994); EQ/Alliance International (April 3, 1995); EQ/Alliance Small Cap
Growth, EQ/FI Small/Mid Cap Value, EQ/Mercury Basic Value Equity, EQ/MFS
Emerging Growth Companies, EQ/MFS Research, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity and EQ/Putnam Voyager (May
1, 1997); EQ/Emerging Markets Equity (August 20, 1997); EQ/Bernstein
Diversified Value, EQ/International Equity Index, EQ/J.P. Morgan Core Bond,
EQ/Lazard Small Cap Value and EQ/Small Company Index (January 1, 1998);
EQ/Evergreen Omega and EQ/MFS Investors Trust (January 1, 1999);
EQ/Alliance Premier Growth, EQ/Capital Guardian International, EQ/Capital
Guardian Research and EQ/Capital Guardian U.S. Equity (May 1, 1999);
EQ/Calvert Socially Responsible (September 1, 1999); EQ/Alliance Technology
(May 1, 2000); EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, EQ/FI Mid
Cap and EQ/Janus Large Cap Growth (September 1, 2000); EQ/Marsico Focus
(August 31, 2001); AXA Premier VIP Core Bond, AXA Premier VIP Health Care,
AXA Premier VIP International Equity, AXA Premier VIP Large Cap Core
Equity, AXA Premier VIP Large Cap Growth, AXA Premier VIP Large Cap Value,
AXA Premier VIP Small/Mid Cap Growth, AXA Premier VIP Small/Mid Cap Value
and AXA Premier VIP Technology (December 31, 2001). No performance
information is provided for portfolios and/or variable investment options
with inception dates after December 31, 2000.
18
(10) UPDATED INFORMATION ON EQUITABLE LIFE
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, "The Equitable Companies Incorporated"). AXA, a French holding
company for an international group of insurance and related financial services
companies, is the sole shareholder of AXA Financial, Inc. As the sole
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
19
Appendix
- --------------------------------------------------------------------------------
Dates of previous Prospectuses and Supplements
Product Distributor
---------------------------------------------------------------
AXA Advisors
---------------------------------------------------------------
Prospectus and
Product Name SAI Dates Supplement Dates
- -------------------------------------- --------------------- -----------------------------------------
4/7/95 7/1/95; 9/28/95
o Income Manager 11/1/95
Accumulator(R) 5/1/96
o Income Manager(R) 10/17/96 2/10/97
Rollover IRA 5/1/97 5/1/97; 12/31/97; 5/1/98;
1/4/99; 5/1/99; 5/1/00; 6/23/00;
9/1/00; 2/9/01; 9/1/01; 1/14/02
---------------------------------------------------------------
12/31/97 12/31/97; 5/1/98; 1/4/99; 5/1/99;
5/1/00; 6/23/00; 9/1/00; 2/9/01;
9/1/01; 1/14/02
- ------------------------------------------------------------------------------------------------------
5/1/98 5/1/98; 6/18/98; 11/30/98
o Equitable Accumulator(R)
(IRA, NQ and QP) 5/1/99 5/1/99; 5/1/00; 9/1/00; 2/9/01; 9/1/01;
1/14/02
o Equitable Accumulator(R)
Select(SM) (IRA, NQ, QP)
- ------------------------------------------------------------------------------------------------------
o Equitable Accumulator(R) 10/18/99 3/20/00; 5/1/00; 6/23/00; 9/1/00;
Select(SM) 2/9/01; 9/1/01; 10/13/00; 1/14/02
o Equitable Accumulator(R)
---------------------------------------------------------------
5/1/00 3/20/00; 6/23/00; 9/1/00; 9/6/00;
2/9/01; 9/1/01; 10/13/00; 1/14/02
---------------------------------------------------------------
5/1/01 5/1/01+; 7/30/01*; 9/1/01;
10/1/01**; 12/14/01; 1/14/02
---------------------------------------------------------------
8/13/01 9/1/01; 10/1/01**; 12/14/01;
(Accumulator(R) 1/14/02
Select(SM) only)
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM) 9/2/99
10/18/99
5/1/00 6/23/00; 9/1/00; 9/6/00; 10/13/00;
2/9/01; 3/19/01; 7/30/01; 9/1/01;
1/14/02
---------------------------------------------------------------
5/1/01 7/30/01*; 9/1/01; 12/14/01;
1/14/02
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) N/A N/A
Select(SM) II
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) Elite(SM)II N/A N/A
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) Elite(SM) 8/13/01 9/1/01; 10/1/01***; 12/14/01;
1/14/02
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) 11/17/00 2/9/01; 3/19/01; 7/30/01*;
Advisor(SM) 9/1/01; 12/14/01; 1/14/02
---------------------------------------------------------------
5/1/01 9/1/01; 12/14/01; 1/14/02
Product Distributor
---------------------------------------------------
AXA Distributors
---------------------------------------------------
Prospectus and
Product Name SAI Dates Supplement Dates
- -------------------------------------- ---------------- ----------------------------------
4/7/95 7/1/95; 9/28/95
o Income Manager 11/1/95
Accumulator(R) 10/16/96 2/10/97
o Income Manager(R) 5/1/97 5/1/97
Rollover IRA 8/1/97
12/31/97 12/31/97; 5/1/98;
1/4/99; 5/1/99; 5/1/00; 9/1/00;
2/9/01; 9/1/01; 1/14/02
- ------------------------------------------------------------------------------------------------------
10/1/97+++
o Equitable Accumulator(R) 12/31/97+++
(IRA, NQ and QP) 5/1/98 5/1/98; 6/18/98; 11/30/98;
o Equitable Accumulator(R) 5/1/99; 5/1/00; 9/1/00; 2/9/01;
Select(SM) (IRA, NQ, QP) 9/1/01; 1/14/02
- ------------------------------------------------------------------------------------------------------
o Equitable Accumulator(R) 5/1/99
Select(SM) 10/18/99 3/20/00; 5/1/00; 9/1/00;
10/13/00; 2/9/01; 9/1/01;
o Equitable Accumulator(R) 1/14/02
---------------------------------------------------------------
5/1/00 3/20/00; 9/1/00; 9/6/00; 10/13/
00; 2/9/01; 9/1/01; 1/14/02
---------------------------------------------------------------
5/1/01 5/1/01+; 5/1/01++; 7/30/01*; 9/1/
01; 10/1/01**; 12/14/01; 1/14/02
---------------------------------------------------------------
N/A N/A
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) Plus(SM) 8/2/99
10/18/99
5/1/00 9/1/00; 9/6/00; 10/13/00;
2/9/01; 3/19/01; 7/30/01;
9/1/01; 1/14/02
---------------------------------------------------------------
5/1/01 5/1/01++; 7/30/01*; 9/1/01;
12/14/01; 1/14/02
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) 10/1/01 10/1/01**; 12/14/01; 1/14/02
Select(SM) II
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) Elite(SM)II 10/1/01 10/1/01***; 12/14/01; 1/14/02
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) Elite(SM) 8/13/01 9/1/01; 10/1/01***; 12/14/01;
1/14/02
- ------------------------------------------------------------------------------------------------------
Equitable Accumulator(R) 5/15/00 9/1/00; 9/6/00; 2/9/01;
Advisor(SM) 7/30/01*; 9/1/01; 12/14/01;
1/14/02
---------------------------------------------------------------
5/1/01 9/1/01; 12/14/01; 1/14/02
Product Distributor
-----------------------------------------------------------------------------------
AXA Advisors AXA Distributors
------------------------------------- ---------------------------------------------
Prospectus and Prospectus and
Product Name SAI Dates Supplement Dates SAI Dates Supplement Dates
- --------------------------- ----------------- ------------------- ---------------- ----------------------------
Equitable Accumulator(R) N/A N/A 9/2/99
Express(SM) 10/18/99
5/1/00 9/1/00; 9/6/00; 2/9/01;
7/30/01*; 9/1/01; 12/14/01;
1/14/02
---------------------------------------------
5/1/01 7/30/01*; 9/1/01; 1/14/02
+ applies to contracts issued in Oregon only.
++ applies to Accumulator(R) and Accumulator(R) Plus(SM) only.
+++ applies to Accumulator(R) Select(SM) only.
* applies to contracts issued in Washington only.
** applies to Equitable Accumulator(R) Select(SM) and Select(SM) II issued in
New York only.
*** applies to Equitable Accumulator(R) Elite(SM) and Elite(SM) II issued in
New York only.
2
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 22
Custodian and Independent Accountants 23
Yield Information for the EQ/Alliance Money Market Option, EQ/Alliance Quality
Bond Option and EQ/High Yield Option 23
Distribution of the contracts 25
Financial Statements 25
How to obtain an Equitable Accumulator(R) Statement of Additional Information
Send this request form to:
Equitable Accumulator(R)
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
Please send me an Equitable Accumulator(R) SAI dated May 1, 2002 :
Check one:
Equitable Accumulator(R) [ ]
Income Manager Accumulator(R)
Income Manager(R) Rollover IRA
Equitable Accumulator(R) (IRA, NQ, QP)
Accumulator(R) Express(SM)
Accumulator(R) Advisor(SM) [ ]
Accumulator(R) Elite(SM) & Elite(SM) II [ ]
Accumulator(R) Plus(SM) [ ]
Accumulator(R) Select(SM) and Select(SM) II [ ]
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
(SAI 4ACS(5/02))
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES --
SUPPLEMENT DATED MAY 1, 2002, TO THE CURRENT ACCUMULATOR(R) PROSPECTUS
- --------------------------------------------------------------------------------
This supplement, which is for use in Oregon ONLY, modifies certain
information in the above-referenced Prospectus. Unless otherwise indicated, all
other information included in the Prospectus remains unchanged. The terms and
section headings we use in this supplement have the same meaning as in the
Prospectus.
1. EQUITABLE ACCUMULATOR(R) AT A GLANCE - KEY FEATURES:
Under "Fees and charges," in the second bullet, the first sentence, is replaced
with the following two sentences:
Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you
exercise your guaranteed minimum income benefit, elect another annuity payout
option or the contract date anniversary after the annuitant reaches age 83,
whichever occurs first. The annual benefit base charge is 0.15% if the 5% roll
up to age 70, if available, is elected.
The information under "Annuitant issue ages" is replaced in its entirety with
the following:
NQ:0-83;
Rollover IRA, Roth Conversion IRA, Flexible Premium Roth IRA* and Rollover
TSA:20-83; Flexible Premium IRA*:20-70; Assured Payment Option and APO Plus (if
available):53-1/2 - 83; QP:20-75
*We anticipate offering Flexible Premium Roth and Flexible Premium IRAs
contracts upon obtaining the necessary regulatory clearance.
2. FEE TABLE:
The following replaces the charges reflected under "Charges we deduct under your
variable investment options expressed as an annual percentage of daily net
assets:"
Mortality and expense risks(1) 1.10%
Administrative 0.25% current (maximum 0.35%)
-----------------------------
Total annual expenses 1.35% current (maximum 1.45%)
3. CONTRACT FEATURES AND BENEFITS:
The following is added as the final paragraph under "Special dollar cost
averaging program:"
In Oregon, where the account for special dollar cost averaging is not available,
we offer a special dollar cost averaging program in the EQ/Alliance Money Market
option for allocation of your eligible contributions, and only a 12 month time
period is available. Under this program, we will not deduct the mortality and
expense risks and administrative charges from amounts in the EQ/Alliance Money
Market option attributable to the program.
The following replaces the entire "Our baseBUILDER" option section:
- ---------------
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
IM-01-55 (5/02) E3838
1
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. For
Rollover IRA, Flexible Premium IRA (if available) and Rollover TSA contracts
where the annuitant is between ages 20 and 60 at contract issue, and where you
elect the baseBUILDER option, we may offer an additional guaranteed minimum
death benefit of a 5% roll up to age 70.The baseBUILDER benefit is available if
the annuitant is between the ages of 20 and 75 at the time the contract is
issued. There is an additional charge for the baseBUILDER benefit, which is
described under "baseBUILDER benefits charge" in "Charges and expenses" below,
and, in greater detail, in the Prospectus.
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit," in the Prospectus.
The guaranteed minimum income benefit guarantees you a minimum amount of
lifetime income under our Income Manager (life annuity with a period certain)
payout annuity contract. The Income Manager (life annuity with a period certain)
payout annuity contract provides payments during a specified period of time
(called a period certain) that will continue for the rest of the annuitant's
life thereafter. If the annuitant dies before the period certain has ended,
payments will continue to the beneficiary for the time remaining in the period
certain.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as the "Living
Benefit," should be regarded as a safety net only.It provides income protection
if you elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the Income Manager (life with a period
certain) payout annuity option will be the greater of (i) your guaranteed
minimum income benefit, which is calculated by applying your benefit base at
guaranteed annuity purchase factors or (ii) the income provided by applying your
actual account value at our then current annuity purchase factors.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below illustrates
the guaranteed minimum income benefit amounts per$100,000 of initial
contribution for a male annuitant age 60 (at issue) on the contract date
anniversaries indicated using the guaranteed annuity purchase factors as of the
date of the prospectus, assuming no additional contributions, withdrawals or
loans under Rollover TSA contracts, and assuming there were no allocations to
the AXA Premier VIP Core Bond, EQ/Alliance Money Market, EQ/Alliance
Intermediate Government Securities or EQ/Alliance Quality Bond options, if
available, or the fixed maturity options.
GUARANTEED MINIMUM
INCOME BENEFIT -- ANNUAL INCOME
CONTRACT DATE PAYABLE FOR LIFE WITH
ANNIVERSARY AT EXERCISE 10 YEAR PERIOD CERTAIN
- ----------------------------------------------------- -----------------------------------------------------
7 $8,315
10 $10,341
15 $14,924
- ----------------------------------------------------- -----------------------------------------------------
When you elect to receive annual income, your contract will terminate and you
will receive an Income Manager (life annuity with a period certain) annuity
payout option. You will begin receiving payments one
IM-10-55 (5/02
2
payment period after the annuity payout option is issued. Your period certain
will be based on the annuitant's age at the time the benefit is exercised, as
follows:
- -------------------------------------------------------------------------------------------------------------------
LEVEL PAYMENTS*
- -------------------------------------------------------------------------------------------------------------------
PERIOD CERTAIN YEARS
- -------------------------------------------------------------------------------------------------------------------
ANNUITANT'S
AGE AT EXERCISE IRAS NQ
- -------------------------------------------------------------------------------------------------------------------
60 to 75 10 10
76 9 10
77 8 10
78 7 10
79 7 10
80 7 10
81 7 9
82 7 8
83 7 7
- ------------------------------------------------------------------------------------------------------------------
*Other forms and periods certain may also be available. For Rollover IRA and
Flexible Premium IRA contracts, where available, please see "Required minimum
distributions" under "Individual retirement arrangements" in "Tax information,"
in the Prospectus and SAI, as to how this option may be affected if exercised
after age 70-1/2.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on conservative
actuarial factors. Therefore, even if your account value is less than your
benefit base, you may generate more income by applying your account value to
current annuity purchase factors. We will make this comparison for you when the
need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
The Income Manager (life annuity with a period certain) payout annuity contracts
are offered through our Prospectus for the Income Manager payout annuities. You
may obtain a copy of the most current version from your financial professional.
You should read it carefully before you decide to exercise your guaranteed
minimum income benefit.
SUCCESSOR OWNER/ANNUITANT. If the successor owner/annuitant (discussed under
"More Information" in the Prospectus) elects to continue the contract after your
death, the guaranteed minimum income benefit will continue to be available on
the contract date anniversaries specified below based on the contract date.
However, the guaranteed minimum income benefit must be exercised based on the
age of the successor owner/annuitant owner.
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract anniversary that
you are eligible to exercise the guaranteed minimum income benefit, we will send
you an eligibility notice illustrating how much income could be provided as of
the contract date anniversary. You may notify us within 30 days following the
contract date anniversary if you want to exercise the guaranteed minimum income
benefit. You must return your contract to us in order to exercise this benefit.
The amount of income you actually receive will be determined when we receive
your request to exercise the benefit. You will begin receiving payments one
payment period after the annuity payout contract is issued.
IM-01-55 (5/02)
3
You (or the successor owner/annuitant, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 53 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
after the annuitant is age 60.
o If the annuitant was at least age 54 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 7th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 83rd birthday;
(ii) if the annuitant was older than age 63 at the time an IRA, QP or
Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax
law must begin before the guaranteed minimum income benefit can be
exercised; and
(iii) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in
such contract to a Rollover IRA contract with the plan participant as
owner.
4. CHARGES AND EXPENSES:
The entire section entitled "Distribution charge" is deleted.
Under baseBUILDER benefit charge, the first sentence is replaced with the
following sentence:
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or reach
the contract anniversary following your 83rd birthday, whichever comes first.
5. CONDENSED FINANCIAL INFORMATION
The unit values and number of units outstanding shown below, as of December 31,
2001, are for contracts offered under Separate Accounts 45 and 49 with the same
asset based charge of 1.35%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2001.
- ----------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK
- ----------------------------------------------------------------------------------------------------------
Unit value $ 51.19 $ 69.35 $ 81.12 $ 69.37 $ 70.28
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding 513 595 553 293 --
(000's)
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding 1,101 1,253 1,163 939 380
(000's)
- ----------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE COMMON STOCK
- ----------------------------------------------------------------------------------------------------------
Unit value $217.65 $247.21 $292.20 $237.18 $186.29
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,555 1,775 1,434 550 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,160 2,453 2,344 1,542 434
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GLOBAL
- ----------------------------------------------------------------------------------------------------------
Unit value $ 27.96 $ 35.51 $ 44.41 $ 32.58 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,616 1,835 1,361 354 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH AND INCOME
- ----------------------------------------------------------------------------------------------------------
Unit value $ 25.52 $ 26.28 $ 24.51 $ 20.99 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 7,830 7,903 5,956 1,853 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH INVESTORS
- ----------------------------------------------------------------------------------------------------------
Unit value $ 34.34 $ 39.84 $ 43.40 $ 34.48 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,806 3,248 2,354 694 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- ----------------------------------------------------------------------------------------------------------
Unit value $ 17.18 $ 16.14 $ 15.03 $ 15.25 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 3,288 2,333 2,057 929 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERNATIONAL
- ----------------------------------------------------------------------------------------------------------
Unit value $ 9.64 $ 12.74 $ 16.81 $ 12.40 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 737 839 591 166 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE MONEY MARKET
- ----------------------------------------------------------------------------------------------------------
Unit value $ 28.61 $ 28.00 $ 26.78 $ 25.92 $ 25.00
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,501 1,860 2,900 1,566 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6,273 5,065 7,278 5,158 1,153
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- ----------------------------------------------------------------------------------------------------------
Unit value $ 7.12 $ 9.49 $ 11.79 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 10,884 12,132 6,304 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 15,780 17,298 8,614 -- --
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE SMALL CAP GROWTH
- ----------------------------------------------------------------------------------------------------------
Unit value $ 14.28 $ 16.68 $ 14.88 $ 11.82 $ 12.54
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,115 2,156 1,264 775 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 8,170 9,189 6,912 6,101 2,521
- ----------------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY
- ----------------------------------------------------------------------------------------------------------
Unit value $ 4.93 $ 6.61 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,346 1,852 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,522 3,814 -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/AXP NEW DIMENSIONS
- ----------------------------------------------------------------------------------------------------------
Unit value $ 6.90 $ 8.29 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 150 41 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/AXP STRATEGY AGGRESSIVE
- ----------------------------------------------------------------------------------------------------------
Unit value $ 4.08 $ 6.21 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 225 100 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
IM-01-55 (5/02)
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- ----------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
EQ/BALANCED
- ----------------------------------------------------------------------------------------------------------
Unit value $ 40.77 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,511 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 289 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/BERNSTEIN DIVERSIFIED VALUE
- ----------------------------------------------------------------------------------------------------------
Unit value $ 11.90 $ 11.70 $ 12.10 $ 11.84 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,847 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 10,569 10,105 9,428 5,696 --
- ----------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY RESPONSIBLE
- ----------------------------------------------------------------------------------------------------------
Unit value $ 8.67 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 10 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 6 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN INTERNATIONAL
- ----------------------------------------------------------------------------------------------------------
Unit value $ 8.69 $ 11.14 $ 13.96 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,210 3,230 1,477 -- --
- ----------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN RESEARCH
- ----------------------------------------------------------------------------------------------------------
Unit value $ 10.72 $ 11.09 $ 10.61 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 231 174 72 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,208 2,064 982 -- --
- ----------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN U. S. EQUITY
- ----------------------------------------------------------------------------------------------------------
Unit value $ 10.15 $ 10.50 $ 10.28 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 376 298 126 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 5,372 4,745 2,907 -- --
- ----------------------------------------------------------------------------------------------------------
EQ/EMERGING MARKETS EQUITY
- ----------------------------------------------------------------------------------------------------------
Unit value $ 6.11 $ 6.53 $ 11.04 $ 5.72 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,765 2,063 1,267 177 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 4,501 4,990 3,859 1,805 --
- ----------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX
- ----------------------------------------------------------------------------------------------------------
Unit value $ 24.41 $ 28.18 $ 31.67 $ 26.73 $ 21.21
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 4,413 4,923 16 2 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 12,941 14,537 -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/EVERGREEN OMEGA
- ----------------------------------------------------------------------------------------------------------
Unit value $ 7.72 $ 9.43 $ 10.82 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 161 164 139 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 140 136 91 -- --
- ----------------------------------------------------------------------------------------------------------
EQ/FI MID CAP
- ----------------------------------------------------------------------------------------------------------
Unit value $ 8.54 $ 10.00 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 493 82 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,307 638 -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/FI SMALL/MID CAP VALUE
- ----------------------------------------------------------------------------------------------------------
Unit value $ 11.20 $ 10.92 $ 10.53 $ 10.48 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 2,091 1,080 972 560 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 2,256 223 -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/HIGH YIELD
- ----------------------------------------------------------------------------------------------------------
Unit value $ 23.74 $ 23.90 $ 26.59 $ 27.96 $ 29.96
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,516 1,616 1,539 801 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 4,307 4,697 5,048 4,521 1,256
- ----------------------------------------------------------------------------------------------------------
IM-01-55 (5/02)
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- ----------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
EQ/INTERNATIONAL EQUITY INDEX
- ----------------------------------------------------------------------------------------------------------
Unit value $ 8.90 $ 12.11 $ 14.90 $ 11.85 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 935 1,017 804 242 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,451 3,708 3,219 1,827 --
- ----------------------------------------------------------------------------------------------------------
EQ/J.P. MORGAN CORE BOND
- ----------------------------------------------------------------------------------------------------------
Unit value $ 12.23 $ 11.48 $ 10.44 $ 10.76 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 14,916 13,606 12,838 8,661 --
- ----------------------------------------------------------------------------------------------------------
EQ/JANUS LARGE CAP GROWTH
- ----------------------------------------------------------------------------------------------------------
Unit value $ 6.38 $ 8.39 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 575 258 -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 1,490 745 -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/LAZARD SMALL CAP VALUE
- ----------------------------------------------------------------------------------------------------------
Unit value $ 12.50 $ 10.76 $ 9.20 $ 9.17 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 7,755 7,215 6,774 4,733 --
- ----------------------------------------------------------------------------------------------------------
EQ/MARSICO FOCUS
- ----------------------------------------------------------------------------------------------------------
Unit value $ 11.34 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 14 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 155 -- -- -- --
- ----------------------------------------------------------------------------------------------------------
EQ/MERCURY BASIC VALUE EQUITY
- ----------------------------------------------------------------------------------------------------------
Unit value $ 17.20 $ 16.52 $ 14.98 $ 12.76 $ 11.60
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 3,681 3,305 2,567 1,009 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 5,603 5,888 5,766 4,389 1,182
- ----------------------------------------------------------------------------------------------------------
EQ/MFS EMERGING GROWTH COMPANIES
- ----------------------------------------------------------------------------------------------------------
Unit value $ 14.37 $ 22.09 $ 27.59 $ 16.10 $ 12.13
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 7,229 8,254 6,114 1,942 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 13,726 16,073 13,671 9,117 3,327
- ----------------------------------------------------------------------------------------------------------
EQ/MFS INVESTORS TRUST
- ----------------------------------------------------------------------------------------------------------
Unit value $ 8.71 $ 10.51 $ 10.72 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 948 1,014 550 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 8,228 8,940 6,033 -- --
- ----------------------------------------------------------------------------------------------------------
EQ/MFS RESEARCH
- ----------------------------------------------------------------------------------------------------------
Unit value $ 12.33 $ 15.98 $ 17.10 $ 14.08 $ 11.50
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 3,465 3,917 3,160 1,479 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 18,176 20,402 19,251 14,913 5,257
- ----------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & Income Value
- ----------------------------------------------------------------------------------------------------------
Unit value $ 12.08 $ 13.14 $ 12.47 $ 12.82 $ 11.52
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,936 2,045 2,057 867 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 25,574 28,008 29,522 24,343 8,113
- ----------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY
- ----------------------------------------------------------------------------------------------------------
Unit value $ 13.55 $ 17.50 $ 20.23 $ 12.80 $ 10.86
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 14,032 15,833 13,783 10,607 4,609
- ----------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH
- ----------------------------------------------------------------------------------------------------------
Unit value $ 12.90 $ 17.32 $ 21.35 $ 16.61 $ 12.35
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 16,512 19,069 17,154 10,072 2,581
- ----------------------------------------------------------------------------------------------------------
IM-01-55 (5/02)
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- ----------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
EQ/SMALL COMPANY INDEX
- ----------------------------------------------------------------------------------------------------------
Unit value $ 11.01 $ 10.94 $ 11.48 $ 9.64 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 899 989 756 284 --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) 3,131 3,340 2,922 1,610 --
- ----------------------------------------------------------------------------------------------------------
EQ/T. ROWE PRICE INTERNATIONAL STOCK
- ----------------------------------------------------------------------------------------------------------
Unit value $ 11.43 $ 14.24 $ 10.95 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 45 number of units outstanding (000's) 1,965 1,488 705 -- --
- ----------------------------------------------------------------------------------------------------------
Separate Account 49 number of units outstanding (000's) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
IM-01-55 (5/02)
8
The Equitable Life Assurance Society of the United States --
SUPPLEMENT DATED MAY 1, 2002, TO THE MAY 1, 2002, ACCUMULATOR(R) PROSPECTUS
AND STATEMENTS OF ADDITIONAL INFORMATION ("SAI"):
- --------------------------------------------------------------------------------
This supplement is for the Accumulator(R) product that is distributed through
AXA Advisors, LLC, and modifies certain information in the above-referenced
Prospectus and SAI, as supplemented to date (the "Prospectus"). Unless
otherwise indicated, all other information included in the Prospectus remains
unchanged. The terms and section headings we use in this supplement have the
same meaning as in the Prospectus.
1. THE ASSURED PAYMENT OPTION AND APO PLUS OPTIONS ARE AVAILABLE UNDER
ACCUMULATOR(R) ROLLOVER IRA AND FLEXIBLE PREMIUM IRA CONTRACTS DISTRIBUTED
BY AXA ADVISORS, LLC. THE FOLLOWING ADDITIONS AND/OR MODIFICATIONS ARE MADE
TO THE PROSPECTUS UNDER THE SECTIONS INDICATED BELOW TO REFLECT THE ASSURED
PAYMENT OPTION AND APO PLUS OPTIONS.
A. UNDER THE SECTION, "EQUITABLE ACCUMULATOR AT A GLANCE - KEY FEATURES," THE
FOLLOWING BULLETS ARE ADDED OR MODIFIED AS FOLLOWS:
1) Under, "Fixed Maturity Options," the first bullet is modified in its
entirety as follows:
" o 10 fixed maturity options ("FMOs") with maturities ranging from
approximately 1 to 10 years (subject to state availability). Under
the Assured Payment Option and APO Plus, there are 5 additional fixed
maturity options with maturities ranging from 11 to 15 years (subject
to state availability)."
2) Under, "Contribution amounts," a new bullet is added as follows:
" o Assured Payment Option and APO Plus under Rollover IRA and Flexible
Premium IRA contracts, subject to state availability
o Initial minimum: $10,000
o Additional minimum: $1,000 (applicable to APO Plus only)"
3) Under, "Access to your money," two new bullets are added as follows:
" o Assured Payment Option, subject to state availability"
o APO Plus, subject to state availability"
4) The following is added to, "Annuitant issue ages":
o "Assured Payment Option and APO Plus: 53-1/2 - 83"
X00324
B. IN, "CONTRACT FEATURES AND BENEFITS," THE FOLLOWING IS ADDED AS THE LAST
SECTION, "HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT":
AVAILABLE FOR ANNUITANT LIMITATIONS ON
CONTRACT TYPE ISSUE AGES MINIMUM CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
Rollover IRA or 53-1/2 through 83 o $10,000 (initial) o Regular traditional IRA o Additional rollover
Flexible Premium contribution. or direct transfer
IRA with Assured o $ 1,000 (additional) contributions may
Payment Option o For the calendar year be made until the
or APO Plus 2002 and later earlier of age 84
additional "catch-up" or within seven
contributions. years from the end
of the fixed
o Eligible rollover period.
distributions from TSA
contracts or other net o Contributions after
of 403(b) arrangements, age 70-1/2 must be
qualified plans and required minimum
governmental EDC plans. distributions.
o Rollovers from another o No regular IRA
calendar year you turn contributions in
traditional individual the age 70-1/2 and
retirement arrangement. thereafter.
o Direct o Total regular
custodian-to-custodian contributions may
transfers from another not exceed $3,000
traditional individual for the calendar
retirement arrangement. 2002.
o Additional catch-up
contributions
totalling up to
$500 can be made
for the calendar
year 2002 where the
owner is at least
age 50 but under
age 70-1/2 at any
time during 2002.
o Although we accept
regular IRA contri-
butions under
rollover IRA
contracts, and
rollover
and direct transfer
contributions under
Flexible Premium
IRA contracts, we
intend that
rollover IRA
contracts be used
for rollover and
direct transfer
contributions and
Flexible Premium
IRA contracts be
used for ongoing
regular
contributions.
C. A NEW THIRD PARAGRAPH IS ADDED UNDER, "FIXED MATURITY OPTIONS," AS
FOLLOWS:
"Under the Assured Payment Option and APO Plus, we offer additional fixed
maturity options with maturity dates ranging from eleven to fifteen years.
We provide distributions during the fixed period under the Assured Payment
Option and APO Plus by allocating your contributions to fixed maturity
options that mature in consecutive order. These amounts become part of our
general account assets. They will accumulate interest at the "rate to
maturity" for each fixed maturity option. In Maryland the fixed maturity
options are only available under the Assured Payment Option and APO Plus
which are issued as separate contracts rather than as a part of a Rollover
IRA or Flexible Premium IRA contract. See Appendix V for more information
on the Assured Payment Option and APO Plus contracts available in
Maryland."
2
D. THE FOLLOWING IS ADDED AS THE SECOND PARAGRAPH UNDER, "FIXED MATURITY
OPTIONS AND MATURITY DATES":
"Under the Assured Payment Option and APO Plus, we offer additional fixed
maturity options ending on February 15th for each of the maturity years
2013 through 2017."
E. A NEW SECTION, "OFF MATURITY DATE PAYMENTS," IS ADDED AFTER THE SECTION,
"MARKET VALUE ADJUSTMENT," AS FOLLOWS:
"OFF MATURITY DATE PAYMENTS. Under Assured Payment Option and APO Plus,
you may choose to receive payments monthly, quarterly or annually. If you
choose annual payments, generally your payments will be made on February
15th as each fixed maturity option matures. You may instead choose to have
your annual payments made in a month other than February. We refer to
payments we make on an annual basis in any month other than February and
monthly or quarterly payments, as payments made "off maturity dates." If
you choose to have your payments made off maturity dates, we will be
required to begin making your payments before the maturity date of a fixed
maturity option. In planning for these payments we will allocate a portion
of your initial contribution or account value to the separate account for
the fixed maturity options, but not to the fixed maturity options
contained in the separate account. We will credit these amounts with
interest at rates that will not be less than 3%.
After that, as each fixed maturity option expires we will transfer your
maturity value from the expired fixed maturity option and hold the
maturity value in the separate account. We will credit interest to these
amounts at the same rate as the rate to maturity that was credited in the
expired fixed maturity option. These amounts will then be used to provide
for payments off maturity dates during the fixed period.
--------------------------------------------------------------------------
Whether you choose monthly, quarterly, or annual payments, your payments
will be made on the 15th day of the month.
--------------------------------------------------------------------------
We will not make a market value adjustment to the amounts held in the
separate account to provide for payments off maturity dates."
F. THE FOLLOWING PARAGRAPH IS ADDED BEFORE, "ALLOCATING YOUR CONTRIBUTIONS":
"The self-directed allocation, principal assurance allocation and dollar
cost averaging programs described in "Allocating your contributions" are
not available when the Assured Payment Option or APO Plus is in effect
under a Rollover IRA or Flexible Premium IRA contract."
G. THE FIRST TWO SENTENCES UNDER, "ANNUITY PURCHASE FACTORS," ARE CHANGED AS
FOLLOWS:
"Annuity purchase factors are the factors applied to determine your
periodic payments under the guaranteed minimum income benefit, annuity
payout options as well as to determine allocation of your contributions
under the Assured Payment Option and APO Plus. The guaranteed minimum
income benefit is discussed under "Our baseBUILDER option" and annuity
payout options, Assured Payment Option and APO Plus are all discussed in
"Accessing your money" later in this prospectus."
H. THE FOLLOWING IS ADDED AS THE LAST BULLET UNDER, "TRANSFERRING YOUR
ACCOUNT VALUE":
" o A transfer request while the Assured Payment Option or APO Plus is in
effect will terminate the option."
I. A NEW SECTION, "ASSURED PAYMENT OPTION AND APO PLUS," IS ADDED TO,
"ACCESSING YOUR MONEY," AS FOLLOWS:
"ASSURED PAYMENT OPTION AND APO PLUS
(Rollover IRA and Flexible Premium IRA contracts only)
We offer two options, the Assured Payment Option and APO Plus, under which
you may receive distributions from your Rollover IRA or Flexible Premium
IRA contract. If you choose one of these two distribution options you will
receive guaranteed payments for a specified period of time we call the
"fixed period." When the fixed period ends you will continue to receive
payments for as long as you are living.
You can elect the Assured Payment Option or APO Plus in the application or
at a later date, provided that your account value is at least $10,000 at
the time of election.
Assured Payment Option and APO Plus benefits will differ for contracts
issued in Maryland. See Appendix VI at the end of this prospectus for more
information.
ASSURED PAYMENT OPTION
HOW WE ALLOCATE YOUR CONTRIBUTIONS. In order to provide for the payments
you receive during the fixed period, we allocate a portion of your initial
contribution or account value to fixed maturity options that mature in
consecutive date order. The remaining portion is allocated to your choice
of a single life or joint and survivor life contingent annuity to provide
for the payments you will receive after the fixed period. The payments are
intended to pay out your entire account value by the end of the fixed
period.
--------------------------------------------------------------------------
The life contingent annuity provides for the payments after the fixed
period ends.
--------------------------------------------------------------------------
3
We determine the allocation of your contributions based on a number of
factors. They are:
o the amount of your contribution;
o annuity purchase factors; and
o the fixed period.
We then allocate your initial contribution among:
(1) The separate account containing:
(i) the fixed maturity options; and
(ii) amounts held to provide payments to you off maturity dates; and
(2) the life contingent annuity.
We will allocate your additional contributions in the same manner.
Additional contributions will increase the level of your future payments.
You may not change this allocation.
While the Assured Payment Option is in effect, no amounts may be allocated
to the variable investment options and the account for special dollar cost
averaging.
If you are using funds from multiple sources to purchase the Rollover IRA
or Flexible Premium IRA contract with the Assured Payment Option in
effect, we will allocate your contributions to the Alliance Money Market
option until we receive all amounts under the contract. Once all amounts
are received we will then apply them under the Assured Payment Option.
PAYMENTS. The payments you receive will increase by 10% every three years
during the fixed period on each third anniversary of the payment start
date. After the end of the fixed period, your first payment under the life
contingent annuity will be 10% greater than the final payment made under
the fixed period.
Whether you choose monthly, quarterly or annual payments, you will usually
begin receiving payments one payment period after the contract date
anniversary on which you elected to begin payments under your option,
unless you elect otherwise, as described under "Off maturity date
payments" earlier in this prospectus. Your payments will always be made on
the 15th day of the month. However, if you are age 53-1/2 or older, you
must defer the date your payments will start until you are age 59-1/2. If
you are at least age 59-1/2 at the time the Assured Payment Option is
elected you may choose to defer the date your payments will start.
Generally, you may defer payments for a period of up to 72 months after
you make your election. This is called the deferral period. Deferral of
the payment start date permits you to lock in rates at a time when you may
consider current rates to be high, while permitting you to delay receiving
payments if you have no immediate need to receive income under your
contract.
--------------------------------------------------------------------------
The deferral period together with the fixed period may be referred to as a
"liquidity period." You will be able to make withdrawals before the end of
the fixed period. You may also choose to surrender your contract for its
cash value while keeping the life contingent annuity in effect.
--------------------------------------------------------------------------
Before you decide to defer payments, you should consider the fact that the
amount of income you purchase is based on the rates to maturity in effect
on the date we allocate your contribution. Therefore, if rates rise during
the deferral period, your payments may be less than they would have been
if you had elected the Assured Payment Option at a later date. Deferral of
the payment start date is not available if you are older than age 80. If
your deferred payment start date is after you reach age 70-1/2, you should
consider the effect that deferral may have on your required minimum
distributions.
See Appendix VI for an example of how payments are made under the Assured
Payment Option.
If you are age 70-1/2 or older, your payments during the fixed period are
designed to meet or exceed required minimum distributions under your
contract. We determine the amount of the payments based on the value in
each fixed maturity option and the assigned value of the life contingent
annuity for tax purposes. If at any time your payment under the Assured
Payment Option would be less than the minimum amount required to be
distributed under minimum distribution rules, we will notify you of the
difference. You may then choose to have an additional amount withdrawn
under your contract. We will treat such withdrawal as a lump sum
withdrawal. However, no withdrawal charge will apply. We will then adjust
your future scheduled payments so that the minimum distribution rules are
met. You also have the option to take the amount from other traditional
IRA funds you may have.
4
FIXED PERIOD. The fixed period based on your age at the time the contract
is issued (or your age at the time the Assured Payment Option is elected)
will be as follows:
AGE* FIXED PERIOD
- ---------------------------------------
59-1/2 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
If you defer the date payments will start, your fixed period will be as
follows:
FIXED PERIOD
BASED ON DEFERRAL PERIOD
-------------------------------------------------
AGE* 1-36 MONTHS 37-60 MONTHS 61-72 MONTHS
- ---------------------------------------------------------------------------
53-1/2 through 70 12 years 9 years 9 years
71 through 75 9 years 9 years N/A
76 through 80 6 years 6 years N/A
81 through 83 N/A N/A N/A
* For joint and survivor payments, the fixed period is based on the age of
the younger annuitant.
PURCHASE RESTRICTIONS FOR JOINT AND SURVIVOR PAYMENTS. If you elect
payments on a joint and survivor basis:
o the joint annuitant must be your spouse; and
o neither you nor the joint annuitant can be over age 83.
PAYMENTS AFTER THE FIXED PERIOD. After the end of the fixed period, we
will continue your payments under the life contingent annuity if either
you or the joint annuitant is living. Payments continue throughout your
lifetime (or the lifetime of the joint annuitant, if joint and survivor
payments are elected) on the same payment schedule (either monthly,
quarterly or annually) as the payments you received during the fixed
period.
--------------------------------------------------------------------------
The portion of your contribution allocated to the life contingent annuity
does not have a cash value or an account value and, therefore, does not
provide for withdrawals.
--------------------------------------------------------------------------
THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND
PAYMENTS ARE MADE TO YOU ONLY IF YOU (OR THE JOINT ANNUITANT) ARE LIVING
WHEN THE PAYMENTS ARE SCHEDULED TO BEGIN. THESE PAYMENTS ARE ONLY MADE
DURING YOUR LIFETIME AND, IF APPLICABLE, THE LIFETIME OF THE JOINT
ANNUITANT. THEREFORE, YOU SHOULD CONSIDER THE POSSIBILITY THAT NO PAYMENTS
WILL BE MADE UNDER THE LIFE CONTINGENT ANNUITY IF YOU (OR THE JOINT
ANNUITANT) DO NOT SURVIVE TO THE DATE PAYMENTS ARE TO BEGIN.
Under the life contingent annuity you may elect single life or joint and
survivor payments. Joint and survivor payments are available on a 100%,
one-half or two-thirds to survivor basis. Your first payment under the
life contingent annuity will be 10% greater than the final payment under
the fixed period. After the fixed period we will increase your payments
annually on each anniversary of the payment start date under the life
contingent annuity. We will base this increase on the annual increase in
the Consumer Price Index, but it will never be greater than 3% per year.
ALLOCATION OF WITHDRAWALS. Only lump sum withdrawals are permitted under
the Assured Payment Option. We will subtract your withdrawal from all
remaining fixed maturity options to which your account value is allocated
as well as from amounts held in the separate account to provide for
payments off maturity dates. As a result we will reduce the amount of your
payments and the length of your fixed period. We will also begin making
payments to you under the life contingent annuity at an earlier date. In
order to achieve this result we will withdraw additional amounts over the
amount of the withdrawal you requested. These amounts will be taken from
the separate account which contains the fixed maturity options and from
amounts held to provide for payments off maturity dates. The amounts are
then allocated to the life contingent annuity. The exact additional amount
we withdraw will depend on how much is necessary to assure that the same
pattern of payments will continue in reduced amounts for your life and the
life of the joint annuitant. The first increase in your payments will take
place no later than the date of the next planned increase.
Withdrawals are subject to a withdrawal charge and will have a 10% free
withdrawal amount available. No withdrawal charges will apply to the
payments made during the fixed period or a withdrawal made to meet the
minimum distribution requirement under the contract.
DEATH BENEFIT. If a death benefit becomes payable during the fixed period
we will pay the death benefit amount to the designated beneficiary. The
death benefit amount is the greater of:
(1) your account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option
plus any amounts to provide for payments off maturity dates.
5
We will not make any payments under the life contingent annuity after your
death unless you have elected payments on a joint and survivor basis. If
you elect joint and one-half or joint and two-thirds to survivor payments,
at your death or the joint annuitant's death, we will reduce the payments
by one-half or one-third, whichever applies.
--------------------------------------------------------------------------
A death benefit is never payable under the life contingent annuity. The
death benefit applies only during the fixed period.
--------------------------------------------------------------------------
TERMINATION. The Assured Payment Option will be terminated if you:
(1) cancel the option at any time by sending a written request satisfactory
to us; or
(2) submit an additional contribution and you do not want it allocated
under the Assured Payment Option; or
(3) request a transfer of your account value; or
(4) request a change in the date the payments are to start under the life
contingent annuity.
Once the Assured Payment Option has ended, the life contingent annuity
will remain in effect and payments will be made if you or the joint
annuitant, are living on the date payments are to start. No additional
amounts will be allocated under the life contingent annuity. You may elect
to restart the Assured Payment Option by submitting a written request
satisfactory to us, but no sooner than three years after the option was
terminated. If you own an Equitable Accumulator Rollover IRA or Flexible
Premium IRA contract and you elected the Assured Payment Option at age
70-1/2 or older and subsequently terminate this option, required minimum
distributions must continue to be made for your contract. Before
terminating the Assured Payment Option, you should consider the
implications this may have under the minimum distribution requirements.
See "Tax Information."
ANNUITY PAYOUT OPTIONS AND SURRENDERING THE CONTRACT. Once your contract
is surrendered or an annuity payout option is chosen, we will return the
contract to you with a notation that the life contingent annuity is still
in effect. You may not surrender the life contingent annuity.
APO PLUS
APO Plus is a variation of the Assured Payment Option. Except as indicated
below, APO Plus operates under the same guidelines as the Assured Payment
Option. Under APO Plus you will be able to keep a portion of your value in
the EQ/Alliance Common Stock option or the EQ/Alliance Equity Index
option, whichever one you choose. Once you have selected a variable
investment option it may not be changed.
You may not elect APO Plus if the Assured Payment Option is already in
effect.
APO Plus allows you to remain invested in the variable investment option
for longer than would be possible if you had applied your entire account
value all at once to the Assured Payment Option or to an annuity payout
option.
HOW WE ALLOCATE YOUR CONTRIBUTIONS. We allocate a portion of your initial
contribution or account value to the Assured Payment Option. Under the
Assured Payment Option amounts are allocated in the same manner as
described above. Your remaining account value is allocated to the variable
investment option you select. Periodically during the fixed period we
transfer a portion of your value in the variable investment option to the
fixed maturity options to increase your guaranteed level payments under
the Assured Payment Option.
The amount allocated under the Assured Payment Option will provide for
level payments. The amount of the level payments are equal to the amount
of the initial payment that would have been provided if you had allocated
your entire initial contribution or account value under the Assured
Payment Option. The difference between the amount required for level
payments and the amount required for increasing payments provided under
the Assured Payment Option, is allocated to the variable investment option
you selected. If you have any value in the fixed maturity options at the
time this option is elected, a market value adjustment may apply as a
result of such amounts being transferred to activate the Assured Payment
Option.
FIXED PERIOD. The fixed period and deferral period schedule shown for the
Assured Payment Option will also apply under APO Plus.
On the third February 15th following the date your first payment is made
during the fixed period, a portion of your value in the variable
investment option may be transferred to the Assured Payment Option in
order to increase your level payments. If you elect a deferral period of
three years or more, a portion of your value in the variable investment
option will be allocated to the Assured Payment Option on the February
15th before the date your first payment is made. If your payments are to
be made on February 15th, the date of the first payment will be counted as
the first February 15th for the purpose of this transfer to the Assured
Payment Option.
The transfer of amounts to the Assured Payment Option is repeated each
third year during the fixed period. The first increase in payments will be
reflected in the payment made to you after three full years of payments
and then every three years after that. Immediately following your last
payment during the fixed period, your remaining value in the variable
investment option is first allocated to the life contingent annuity to
change the level payments previously purchased to increasing payments.
These increasing payments will increase each year based on the annual
increase in the Consumer Price Index, but never greater than 3%. If you
have any value remaining after the
6
increasing payments are purchased, this amount is allocated to the life
contingent annuity to further increase your lifetime payments. If your
value in the variable investment option is insufficient to purchase the
increasing payments, then the level payments previously purchased will be
raised as much as possible.
While APO Plus provides you with a minimum amount of level guaranteed
lifetime payments under the Assured Payment Option, the total amount of
income that you will receive over time will depend on the investment
performance of the variable investment option which you selected. It will
also depend on the current rates to maturity and the cost of the life
contingent annuity, which also varies. As a result, the combined amount of
guaranteed lifetime income you receive under APO Plus may be more or less
than the amount that could have been purchased if your entire initial
contribution or account value had been allocated to the Assured Payment
Option.
See Appendix VI for an example of the payments purchased under APO Plus.
ALLOCATION OF ADDITIONAL CONTRIBUTIONS. Any additional contributions you
make may only be allocated to the variable investment option. We do not
permit additional contributions after the end of the fixed period.
WITHDRAWALS. If you take a lump sum withdrawal or if a lump sum withdrawal
is made to satisfy minimum distribution requirements such withdrawal will
be taken from your value in the variable investment option unless you
specify otherwise. If there is insufficient value in the variable
investment option any additional amount will be taken from the separate
account containing the fixed maturity options and from amounts held to
provide for payments off maturity dates, in the same manner as described
above for the Assured Payment Option.
DEATH BENEFIT. If a death benefit becomes payable during the fixed period
we will pay the death benefit amount to the designated beneficiary. The
death benefit amount is equal to the greater of your value in the:
(1) fixed maturity options; and
(2) the separate account containing the fixed maturity amounts and any
amounts held to provide for payments off maturity dates.
When the greater of (1) and (2) above is determined, the value in the
variable investment option is added. A death benefit is never payable
under the life contingent annuity.
TERMINATION OF APO PLUS. You may terminate APO Plus at any time by
submitting a written request satisfactory to us. You may choose one of the
following two options if you terminate APO Plus:
(1) your contract will operate under the Equitable Accumulator Rollover IRA
or Flexible Premium IRA rules; or
(2) you may elect the Assured Payment Option.
If you elect the Assured Payment Option, your remaining value in the
variable investment option will be allocated to the fixed maturity
options, the separate account to provide for payments off maturity dates,
and the life contingent annuity. A market value adjustment may apply for
any amounts allocated from a fixed maturity option. At least 45 days prior
to the end of each three-year period, we will send you a quote indicating
how much future income could be provided under the Assured Payment Option.
The quote would be based on your current account value, current rates to
maturity for the fixed maturity options, and current purchase rates under
the life contingent annuity as of the date of the quote. The actual amount
of future income you would receive depends on the rates in effect on the
day you switch to the Assured Payment Option."
J. THE FIRST SENTENCE IN THE SECOND PARAGRAPH UNDER, "LUMP SUM WITHDRAWALS,"
IS CHANGED TO THE FOLLOWING:
"Lump sum withdrawals in excess of the 15% (10% under Assured Payment
Option or APO Plus) free withdrawal amount (see "15% free withdrawal
amount" in "Charges and expenses" in the prospectus) may be subject to a
withdrawal charge."
K. THE FOLLOWING PARAGRAPH IS ADDED TO, "WITHDRAWAL CHARGE," AFTER THE
WITHDRAWAL CHARGE CHART:
"If the Assured Payment Option or APO Plus is in effect, the withdrawal
charge is equal to a percentage of the contributions withdrawn minus any
amounts allocated to the life contingent annuity."
L. THE FOLLOWING IS ADDED AS THE SECOND PARAGRAPH UNDER, "15% FREE WITHDRAWAL
AMOUNT":
"The free withdrawal amount is 10% of your account value under the Assured
Payment Option and APO Plus."
M. THE FOLLOWING IS ADDED AS THE LAST SENTENCE IN THE SECTION, "YOUR
BENEFICIARY AND PAYMENT OF BENEFIT":
"The death benefit payable under the Assured Payment Option or APO Plus is
described earlier."
N. THE FOLLOWING IS ADDED AS THE LAST SENTENCE UNDER, "BENEFICIARY
CONTINUATION OPTION":
"In addition, the beneficiary continuation option is not available if APO
or APO Plus is in effect at your death."
7
O. A NEW SECTION, "REQUIRED MINIMUM DISTRIBUTIONS UNDER THE ASSURED PAYMENT
OPTION AND APO PLUS," IS ADDED TO, "TAX INFORMATION," AFTER, "PAYMENTS TO A
BENEFICIARY AFTER YOUR DEATH." IN THE SECTION, "INDIVIDUAL RETIREMENT
ARRANGEMENT (IRAS)," AS FOLLOWS:
"REQUIRED MINIMUM DISTRIBUTIONS UNDER THE ASSURED PAYMENT OPTION AND APO
PLUS
Although the life contingent annuity portion of the Assured Payment Option
and APO Plus does not have a cash value, it will be assigned a value for
tax purposes. This value will generally be changed each year. When you
determine the amount of account-based required minimum distributions from
your traditional IRA this value must be included. This must be done even
though the life contingent annuity may not be providing a source of funds
to satisfy the required minimum distribution.
If you surrender your contract, or withdraw any remaining account value
before your payments under the life contingent annuity begin, it may be
necessary for you to satisfy your required minimum distribution by moving
forward the start date of payments under your life contingent annuity. Or
to the extent available, you have to take distributions from other
traditional IRA funds you may have. Or, you may convert your traditional
IRA life contingent annuity under the contract to a nonqualified life
contingent annuity. This would be viewed as a distribution of the value of
the life contingent annuity from your traditional IRA, and therefore,
would be a taxable event. However, since the life contingent annuity would
no longer be part of the traditional IRA, you would not have to include
its value when determining future required minimum distributions.
If you have elected a joint and survivor form of the life contingent
annuity, the joint annuitant must be your spouse. In the event of your
death or the death of your spouse, the value of the life contingent
annuity will change. For this reason, it is important that someone tell us
if you or your spouse dies before the life contingent annuity has started
payments so that a lower valuation can be made. Otherwise, a higher tax
value may result in an overstatement of the amount that would be necessary
to satisfy your required minimum distribution amount.
Allocation of funds to the life contingent annuity may limit your ability
to roll over to another eligible retirement plan."
P. THE FOLLOWING CHART IS ADDED UNDER THE FIRST CHART IN, "ABOUT OUR FIXED
MATURITY OPTIONS":
Available under the Assured Payment Option and APO Plus
FIXED MATURITY OPTIONS WITH FEBRUARY 15TH
MATURITY DATE OF MATURITY YEAR RATE TO MATURITY AS OF FEBRUARY 15, 2002 PRICE PER $100 OF MATURITY VALUE
- -----------------------------------------------------------------------------------------------------------------------------
2013 5.35% $ 56.34
2014 5.35% $ 53.48
2015 5.35% $ 50.77
2016 5.35% $ 48.19
2017 5.35% $ 45.73
Q. THE FOLLOWING SENTENCE IS ADDED UNDER, "AUTOMATIC INVESTMENT PROGRAM -- FOR
NQ, FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA CONTRACTS ONLY," IN
THE SECTION, "ABOUT OTHER METHODS OF PAYMENT":
"The Automatic Investment Program is also not available under the Assured
Payment Option or APO Plus."
R. Two appendices are added as follows:
1. "Appendix V: Example of payments under the Assured Payment Option and
APO Plus
The second column in the chart below illustrates the payments for a male
age 70 who purchased the Assured Payment Option on February 15, 2002 with
a single contribution of $100,000, with increasing annual payments. The
payments are to commence on February 15, 2003. It assumes that the fixed
period is 15 years and that the life contingent annuity will provide
payments on a single life basis. Based on the rates to maturity for the
fixed maturity options and the current purchase rate for the life
contingent annuity, on February 15, 2002, the initial payment would be
$6,454.49 and would increase in each three-year period to a final payment
of $9,450.01. The first payment under the life contingent annuity would be
$10,395.02.
The rates to maturity as of February 15, 2002 for fixed maturity options
maturing on February 15, 2003 through 2017 are: 3.00%, 3.00%, 3.63%,
4.07%, 4.49%, 4.82%, 5.08%, 5.29%, 5.47%, 5.59%, 5.35%, 5.35%, 5.35%,
5.35%, and 5.35% respectively.
Alternatively as shown in the third and fourth columns, this individual
could purchase APO Plus with the same $100,000 contribution, with the same
fixed period and the life contingent annuity on a single life basis.
Assuming election of the EQ/Alliance Common Stock option based on the
rates to maturity for the fixed maturity options and the current purchase
rate for the life contingent annuity, on February 15, 2002, the same
initial payment of $6,454.49 would be purchased under APO Plus. However,
unlike the payment under the Assured Payment Option that will increase
every three years, this initial payment under APO Plus is not guaranteed
to increase. Therefore,
8
only $78,106.45 is needed to purchase the initial payment stream, and the
remaining $21,893.55 is invested in the variable investment options. Any
future increase in payments under APO Plus will depend on the investment
performance in the EQ/Alliance Common Stock option.
Assuming hypothetical average annual rates of return of 0% and 8% (after
deduction of charges) for the variable investment option, the value in the
variable investment option would grow to $21,893.55 and $29,792.21
respectively as of February 15, 2006. A portion of this amount is used to
purchase the increase in the payments for the fourth year. The remainder
will stay in the variable investment option to be drawn upon for the
purchase of increases in payments for each third year thereafter during
the fixed period and at the end of the fixed period under the life
contingent annuity. Based on the rates to maturity for the fixed maturity
options and purchase rates for the life contingent annuity as of February
15, 2002, the third and fourth columns illustrate the increasing payments
that would be purchased under APO Plus assuming 0% and 8% rates of return
respectively.
Under both options, while you are living, payments increase annually after
the 16th year under the life contingent annuity based on the increase, if
any, in the Consumer Price Index, but in no event greater than 3% per
year.
ANNUAL PAYMENTS
GUARANTEED INCREASING ILLUSTRATIVE ILLUSTRATIVE
PAYMENTS UNDER THE PAYMENTS UNDER PAYMENTS UNDER
YEARS ASSURED PAYMENT OPTION APO PLUS AT 0% APO PLUS AT 8%
- -----------------------------------------------------------------------
1-3 6,454.49 6,454.49 6,454.49
4-6 7,099.94 6,755.56 7,342.32
7-9 7,809.93 7,158.68 8,254.49
10-12 8,590.92 7,578.58 9,227.98
13-15 9,450.01 7,987.41 10,230.98
16 10,395.02 8,340.76 11,198.47
As described above, a portion of the illustrated contribution is applied
to the life contingent annuity. This amount will generally be larger under
the Assured Payment Option than under APO Plus. Also, a larger portion of
the contribution will be allocated to fixed maturity options under the
former rather than the latter. In this illustration, $78,869.31 is
allocated under the Assured Payment Option to the fixed maturity options
and under APO Plus, $66,700.18 is allocated to the fixed maturity options.
In addition, under APO Plus $21,893.55 is allocated to the variable
investment option. The balance of the $100,000 ($21,130.69 and $11,406.27
respectively) is applied to the life contingent annuity.
The rates of return of 0% and 8% are for illustrative purposes only and
are not intended to represent an expected or guaranteed rate of return.
Your investment results will vary. Payments will also depend on the rates
to maturity and life contingent annuity purchase rates in effect on the
day the contribution is applied. It is assumed that no lump sum
withdrawals are taken."
2. "Appendix VI: Assured Payment Option and APO Plus contracts issued in
the state of Maryland
THE FOLLOWING INFORMATION SPECIFIES THE VARIATIONS THAT RELATE TO THE
ASSURED PAYMENT OPTION AND APO PLUS CONTRACTS ISSUED IN MARYLAND.
The Assured Payment Option and APO Plus (available only as traditional
IRAs) are issued as separate contracts rather than as a distribution
option under a Rollover IRA or Flexible Premium IRA contract.
You may purchase an Assured Payment Option or APO Plus contract with a
minimum single contribution of $10,000. You may also choose to apply the
account value from a Flexible Premium IRA or Rollover IRA contract to
purchase an Assured Payment Option or APO Plus contract. Your account
value will be applied as a single contribution.
We will allocate your single contribution in the same manner as described
under "Assured Payment Option and APO Plus" earlier in this prospectus.
You are not permitted to make additional contributions under the Assured
Payment Option and APO Plus.
PAYMENTS. Your payments must begin within 13 months after the contract
date. You may not elect to defer your payments.
DEATH BENEFIT. If you die during the fixed period, we will continue
payments to your designated beneficiary. Your beneficiary may choose to
discontinue the payments and receive a lump sum amount. If the lump sum is
elected within one year of your death, the amount will be equal the death
benefit payable under the Assured Payment Option and APO Plus.
TERMINATING THE CONTRACT. You may choose to terminate the contract by
surrendering the contract as described under "Surrendering your contract
to receive its cash value." We will return the contract to you with a
notation that the life contingent annuity is still in effect. The date
payments are to start under the life contingent annuity will be moved
forward.
9
TAX INFORMATION. The Assured Payment Option and APO Plus contracts have
not been submitted to the IRS for approval as to form for use as a
traditional IRA. However, we believe that those contracts as currently
offered comply with the requirements of the Internal Revenue Code."
2. AN ADDITIONAL GUARANTEED MINIMUM DEATH BENEFIT AND GUARANTEED MINIMUM
INCOME BENEFIT OPTIONS ARE AVAILABLE FOR ACCUMULATOR(SM) ROLLOVER IRA,
FLEXIBLE PREMIUM IRA AND ROLLOVER TSA CONTRACTS DISTRIBUTED THROUGH AXA
ADVISORS, LLC, WHERE THE ANNUITANT IS BETWEEN AGES 20 AND 60 AT CONTRACT
ISSUE. THE FOLLOWING ADDITIONS AND/OR MODIFICATIONS ARE MADE TO THE
PROSPECTUS UNDER THE SECTIONS INDICATED BELOW TO REFLECT THESE ADDITIONAL
OPTIONS.
A. THE FOLLOWING IS ADDED AS THE LAST SENTENCE UNDER, "YOUR BENEFIT BASE":
"For the guaranteed minimum income benefit available, if you elect the
guaranteed minimum death benefit of a 5% rollup to age 70, no interest is
credited after the annuitant is age 70."
B. THE FOLLOWING IS ADDED AS THE SECOND SENTENCE UNDER, "OUR BASEBUILDER
OPTION":
"For Rollover IRA, Flexible Premium IRA and Rollover TSA contracts where
the annuitant is between ages 20 and 60 at contract issue, and where you
elect the baseBUILDER option, we offer an additional guaranteed minimum
death benefit of a 5% rollup to age 70."
C. A NEW SECTION, "5% ROLL UP TO AGE 70," IS ADDED TO, "GUARANTEED MINIMUM
DEATH BENEFIT":
"5% ROLL UP TO AGE 70. This is an optional guaranteed minimum death
benefit available for ages 20 through 60 at issue of Rollover IRA,
Flexible Premium IRA, and TSA contracts if baseBUILDER is also elected.
Your guaranteed minimum death benefit will be calculated as described
above under "5% roll up to age 80" except that interest will be credited
only through age 70. This guaranteed minimum death benefit is not
available in New York."
D. IF YOU ELECT THE 5% ROLLUP TO AGE 70 GUARANTEED MINIMUM INCOME AND DEATH
BENEFITS, ALL REFERENCES TO, "5% ROLLUP TO AGE 80," ARE CHANGED TO, "5%
ROLLUP TO AGE 70."
E. THE LAST SENTENCE IN PARAGRAPH ONE OF, "BASEBUILDER BENEFIT CHARGE," IS
CHANGED TO:
"The charge is equal to 0.30% (0.15% if the 5% roll up to age 70
baseBUILDER benefit is elected) of the benefit base in effect on the
contract date anniversary."
10
The Equitable Life Assurance Society of the United States --
SUPPLEMENT DATED MAY 1, 2002, TO THE MAY 1, 2002, ACCUMULATOR(R) ADVISOR(SM)
PROSPECTUS AND STATEMENTS OF ADDITIONAL INFORMATION ("SAI"):
- --------------------------------------------------------------------------------
This supplement is for the Accumulator(R) Advisor(SM) product that is
distributed through AXA Advisors, LLC, and modifies certain information in the
above-referenced Prospectus and SAI, as supplemented to date (the "Prospectus").
Unless otherwise indicated, all other information included in the Prospectus
remains unchanged. The terms and section headings we use in this supplement have
the same meaning as in the Prospectus.
1. The guaranteed minimum death benefit described in this supplement is
available instead of the minimum death benefit described in the prospectus.
Therefore, all references in the prospectus to "minimum death benefit" are
hereby changed to "guaranteed minimum death benefit." In addition, the
following additions and/or modifications are made to the Prospectus under
the sections indicated below to reflect the guaranteed minimum death
benefit feature.
A. UNDER "EQUITABLE ACCUMULATOR(R) ADVISORSM AT A GLANCE -- KEY FEATURES," IN
THE "ADDITIONAL FEATURES," SECTION, A NEW BULLET IS ADDED AS FOLLOWS:
"o Guaranteed minimum death benefit"
B. THE FOLLOWING IS ADDED AS A NEW SECTION AFTER, "ALLOCATING YOUR
CONTRIBUTIONS":
"GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided under your contract at no
additional charge.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH
79 AT ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA AND
ROTH CONVERSION IRA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum
death benefit equals your initial contribution. Then, on each contract
date anniversary, we will determine your guaranteed minimum death benefit
by comparing your current guaranteed minimum death benefit to your account
value on that contract date anniversary. If your account value is higher
than your guaranteed minimum death benefit, we will increase your
guaranteed minimum death benefit to equal your account value. On the other
hand, if your account value on the contract date anniversary is less than
your guaranteed minimum death benefit, we will not adjust your guaranteed
minimum death benefit either up or down. If you make additional
contributions, we will increase your current guaranteed minimum death
benefit by the dollar amount of the contribution on the date the
contribution is allocated to your investment options. If you take a
withdrawal from your contract, we will adjust your guaranteed minimum
death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH
83 AT ISSUE OF NQ, ROLLOVER IRA AND ROTH CONVERSION IRA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your
initial contribution. Thereafter, it will be increased by the dollar
amount of any additional contributions. We will adjust your guaranteed
minimum death benefit if you take any withdrawals.
Please see, "How withdrawals affect your guaranteed minimum death benefit"
in "Accessing your money" for information on how withdrawals affect your
guaranteed minimum death benefit.
See Appendix IV for an example of how we calculate the guaranteed minimum
death benefit."
C. In the section "Accessing your money" under "How withdrawals affect your
minimum death benefit," all references to "minimum death benefit" are
replaced by "guaranteed minimum death benefit."
D. THE SECOND SENTENCE UNDER, "GROUP OR SPONSORED ARRANGEMENTS," IS REVISED
IN ITS ENTIRETY AS FOLLOWS:
"We may also change the guaranteed minimum death benefit or offer variable
investment options that invest in shares of either Trust that are not
subject to the 12b-1 fee."
E. PARAGRAPH THREE IN "YOUR BENEFICIARY AND PAYMENT OF BENEFIT," IS CHANGED
IN ITS ENTIRETY AS FOLLOWS:
"The death benefit is equal to your account value (without adjustment for
any otherwise applicable negative market value adjustment) or, if greater,
the guaranteed minimum death benefit. We determine the amount of the death
benefit (other than the guaranteed minimum death benefit) as of the date
we receive satisfactory proof of the annuitant's death, any required
instructions for payment, information and forms necessary to effect
payment. The amount of the guaranteed minimum death benefit will be the
guaranteed minimum death benefit as of the date of the annuitant's death
adjusted for any subsequent withdrawals."
F. A NEW APPENDIX IV IS ADDED AS FOLLOWS:
"APPENDIX IV: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit
calculation. Assuming $100,000 is allocated to the variable investment
options (with no allocation to the EQ/Alliance Money Market option, AXA
Premier VIP Core Bond option, EQ/Alliance Intermediate Government
Securities option, EQ/Alliance Quality Bond option or the fixed maturity
options), no additional contributions, no transfers, no withdrawals and no
loans under a Rollover TSA contract, the guaranteed minimum death benefit
for an annuitant age 45 would be calculated as follows:
- --------------------------------------------------------------------------------
END OF ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT
- --------------------------------------------------------------------------------
1 $105,000 $105,000 (1)
- --------------------------------------------------------------------------------
2 $115,500 $115,500 (1)
- --------------------------------------------------------------------------------
3 $129,360 $129,360 (1)
- --------------------------------------------------------------------------------
4 $103,488 $129,360 (2)
- --------------------------------------------------------------------------------
5 $113,837 $129,360 (2)
- --------------------------------------------------------------------------------
6 $127,497 $129,360 (2)
- --------------------------------------------------------------------------------
7 $127,497 $129,360 (2)
- --------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on
hypothetical rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%,
12.00% and 0.00%. We are using these rates solely to illustrate how the
benefit is determined. The return rates bear no relationship to past or
future investment results.
ANNUAL RATCHET TO AGE 80
(1) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(2) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of
the prior year since it is equal to or higher than the current account
value."
2
Income Manager(R) Please read and keep this prospectus for
Payout annuity contracts future reference. It contains important
information that you should know before
purchasing or taking any other action
under your contract.
PROSPECTUS DATED MAY 1, 2002
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WHAT IS INCOME MANAGER(R)?
Income Manager(R) contracts are payout annuity contracts issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES. They are designed to provide
retirement income. We offer two versions of the Income Manager(R) payout annuity
contract from which you may choose to receive your retirement income. You may
choose to receive income payable for a specified period ("period certain"). Or,
you may choose to receive lifetime income payable for at least a specified
period ("life annuity with a period certain"). Under the life annuity with a
period certain contract you may choose whether payments are made on a single
life or a joint and survivor life basis.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"). There are two types of IRAs,
Traditional IRAs or Roth IRAs. Because Roth IRAs were newly introduced in
1998 and have a five year aging period before distributions are eligible to
be made on a tax-free basis, we do not expect to offer payout annuity Roth
IRA contracts before the year 2003.
A contribution of at least $10,000 is required to purchase a contract.
FIXED MATURITY OPTIONS. We allocate your contributions to a series of fixed
maturity options to provide your income payments during the period certain.
Amounts allocated to these fixed maturity options will receive a fixed rate of
interest during the period certain. Interest is earned at a guaranteed rate we
set ("rate to maturity"). We make a market value adjustment (up or down) if you
make a withdrawal from a fixed maturity option before its maturity date.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). This prospectus can be obtained from
the SEC's Website at http://www.sec.gov.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
X00297
Contents of this prospectus
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INCOME MANAGER(R)
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Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Income Manager(R) at a glance -- key features 7
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1. CONTRACT FEATURES AND BENEFITS 9
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How you can purchase and contribute to your contract 9
Source of contributions 9
Owner and annuitant requirements 9
What are your investments under the contract? 9
What are your contract choices? 10
Life annuity with a period certain contract 10
Period certain contract 14
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2. OTHER BENEFITS AND FEATURES OF THE CONTRACTS 16
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How you can make your contributions 16
Your right to cancel within a certain number of days 16
Surrendering your contract to receive its cash value 16
When to expect payments 16
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3. CHARGES 17
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Withdrawal charges 17
Amounts applied from other contracts issued by Equitable Life 17
Charges for state premium and other applicable taxes 17
Group or sponsored arrangements 17
Other distribution arrangements 18
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4. PAYMENT OF DEATH BENEFIT 19
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Your beneficiary 19
Your annuity payout options 19
- ----------
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
"We," "our" and "us" refer to Equitable Life. "Financial professional" means the
registered representative who is offering you this contract.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
2 Contents of this prospectus
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5. TAX INFORMATION 20
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Overview 20
Taxation of nonqualified annuities 20
Special rules for NQ contracts issued in Puerto Rico 21
Individual retirement arrangements ("IRAs") 21
Traditional individual retirement annuities ("Traditional IRAs") 22
Federal and state income tax withholding and information reporting 27
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6. MORE INFORMATION 28
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About our fixed maturity options 28
About the separate account for the fixed maturity options 28
About our general account 28
Other methods of payment 29
About payments under period certain contracts 29
Dates and prices at which contract events occur 29
About legal proceedings 29
About our independent accountants 29
Transfers of ownership, collateral assignments, loans, and borrowing 29
Distribution of contracts 29
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7. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 31
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APPENDIX: MARKET VALUE ADJUSTMENT
EXAMPLE A-1
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Contents of this prospectus 3
Index of key words and phrases
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This index should help you locate more information on the terms used in this
prospectus.
Page Page
account value 12 life annuity with a period certain 10
annuitant 9 life contingent annuity 11
beneficiary 19 market adjusted amount 9
business day 16 market value adjustment 10
cash value 12 maturity value 10
contract date 8 off maturity date 10
contract year 8 NQ 21
contribution 9 payout option 19
deferral period 11 period certain 7
fixed maturity amount 9 Processing Office 6
fixed maturity options 9 rate to maturity 9
IRA cover SEC cover
IRS 20 separate account 28
joint and survivor 10 single life 10
joint owners 9 traditional IRA 22
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in the prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract.
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PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
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fixed maturity amount Guaranteed Period Amount
fixed maturity options Guarantee Periods
(Guaranteed Interest Rate Options ("GIRO's") in
supplemental materials)
off maturity date payments Modal Payment Portion
market adjusted amount annuity account value
maturity date Expiration Date
rate to maturity Guaranteed Rate
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4 Index of key words and phrases
Who is Equitable Life?
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a wholly owned subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). The sole shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As the sole shareholder, and
under its other arrangements with Equitable Life and Equitable Life's parent,
AXA exercises significant influence over the operations and capital structure of
Equitable Life and its parent. No company other than Equitable Life, however,
has any legal responsibility to pay amounts that Equitable Life owes under the
contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$481.0 billion in assets as of December 31, 2001. For more than 100 years
Equitable Life has been among the largest insurance companies in the United
States. We are licensed to sell life insurance and annuities in all fifty
states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our
home office is located at 1290 Avenue of the Americas, New York, NY 10104.
Who is Equitable Life? 5
HOW TO REACH US
You may communicate with our processing office as listed below for the purposes
described. Certain methods of contacting us, such as by telephone or
electronically may be unavailable or delayed (for example our facsimile service
may not be available at all times and/or we may be unavailable due to emergency
closing). In addition, the level and type of service available may be restricted
based on criteria established by us.
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FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
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Equitable Life
Income Manager(R)
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
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Equitable Life
Income Manager(R)
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR MAIL:
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Equitable Life
Income Manager(R)
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS
DELIVERY:
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Equitable Life
Income Manager(R)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
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CUSTOMER SERVICE REPRESENTATIVES:
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You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on each business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
REPORTS WE PROVIDE:
o Statement of your contract values as of the last day of the calendar year;
o Three written reports of your contract values each year; and
o Written confirmation of financial transactions.
You should send all contributions, required notices, and requests to exercise
any of your rights or privileges to our Processing Office at the address above.
WE HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) withdrawal requests; and
(4) contract surrender.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners, all must sign.
6 Who is Equitable Life?
Income Manager(R) at a glance -- key features
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INCOME MANAGER(R)
(LIFE ANNUITY WITH INCOME MANAGER(R)
A PERIOD CERTAIN) A PERIOD CERTAIN)
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INCOME PAYMENTS NQ -- Level or increasing payments. NQ and IRA -- Level payments only.
IRA -- Level payments only.
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PERIOD CERTAIN You will receive payments for periods ranging from 7 to 15 years depending on the age of the annuitant.
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FORM OF PAYMENT AVAILABLE Single life or joint and survivor. Single life ONLY
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PAYMENTS AFTER THE Payments continue while the annuitant or joint
END OF THE PERIOD CERTAIN annuitant is living.
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CONTRIBUTION AMOUNTS:
INITIAL MINIMUM: o $10,000 o $10,000
ADDITIONAL MINIMUM: o $1,000 (subject to restrictions) o Not permitted
Maximum investment limitations may apply. Maximum investment limitations may apply.
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FIXED MATURITY OPTIONS o 15 fixed maturity options with maturities ranging from approximately 1 to 15 years.
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
o Principal guarantees.
-- If you make withdrawals from a fixed maturity option before maturity, there will be a market
value adjustment due to differences in interest rates. This may increase or decrease any value
you have left in that fixed maturity option. If you surrender your contract, a market value
adjustment may also apply.
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TAXES Generally, earnings will be taxed at your ordinary income tax rate when distributions are made from
your contract.
o NQ -- A portion of each payment is generally not considered taxable income until you have received a
tax-free recovery of your investment in the contract.
o IRA -- All amounts distributed are generally taxable.
-------------------------------------------------------------------------------------------------------
This contract is intended to be a payout annuity. However, there may be some instances where you can
delay beginning payments, so rules governing deferred annuity payments could apply.
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DEATH BENEFIT A death benefit is provided if the annuitant A death benefit is provided if the annuitant dies
dies before the end of the period certain. before the end of the period certain.
There is no death benefit after the period
certain.
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ACCESS TO YOUR MONEY o Withdrawals. o Withdrawals.
DURING THE PERIOD CERTAIN
o Contract surrender. o Contract surrender.
A market value adjustment may apply. You may A market value adjustment may apply. You may also
also incur income tax and a penalty tax. incur income tax and a penalty tax.
You cannot take a withdrawal from, or
surrender, your life contingent annuity.
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Income Manager(R) at a glance -- key features 7
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INCOME MANAGER(R)
(LIFE ANNUITY WITH INCOME MANAGER(R)
A PERIOD CERTAIN) A PERIOD CERTAIN)
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CHARGES o We deduct a charge designed to o We deduct a charge designed to approximate certain
approximate certain taxes that may be taxes that may be imposed upon us, such as premium
imposed upon us, such as premium taxes in taxes in your state. We deduct this charge from
your state. We deduct this charge from your your contributions.
contributions.
o During the first seven contract years, a charge
o During the first seven contract years will be deducted from amounts that you withdraw.
following a contribution, a charge will be The charge begins at 7% in the first conract year.
deducted from amounts that you withdraw It declines each year to 1% in the seventh
that exceed 10% of your account value. We contract year. There is no withdrawal charge in
use the account value on the most recent the eight and later contract years.
contract date anniversary to calculate the
10% amount available. The charge begins at o There is no free withdrawal amount.
7% in the first contract year following a
contribution. It declines each year to 1%
in the seventh contract year. There is no
withdrawal charge in the eighth and later
contract years following a contribution.
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The "contract date" is the effective date of a contract. This usually is the business day we receive the properly completed and
signed application, along with any other required documents, and your initial contribution. Your contract date will be shown in
your contract. The 12-month period beginning on your contract date and each 12-month period after that date is a "contract
year." The end of each 12-month period is your "contract date anniversary."
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ANNUITANT NQ and IRA level payments: 45 -- 83
ISSUE AGES NQ increasing payments: 53-1/2 -- 83
Different ages may apply depending on when
annuity payments start.
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS
APPLY. ALSO, ALL FEATURES OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this prospectus, as well as your contract. Please feel free to
speak with your financial professional, or call us, if you have any questions.
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8 Income Manager(R) at a glance -- key features
1. Contract features and benefits
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HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase your contract by making payments to us we call "contributions."
We require a contribution of at least $10,000 for you to purchase a contract.
Under life annuity with a period certain contracts, you may make additional
contributions subject to the limitations as described under "Additional
contributions" later in this Prospectus.
SOURCE OF CONTRIBUTIONS
NQ CONTRACTS. We will accept only contributions made with after-tax money. You
may make your contributions by check or by transfer of your entire contract
value in a tax-deferred exchange under Section 1035 of the Internal Revenue
Code.
IRA CONTRACTS. Contributions may be made from:
o Eligible rollover distributions from TSA contracts or other 403(b)
arrangements, qualified plans, and governmental 457(b) or "EDC" plans.
o Rollovers from another traditional individual retirement arrangement.
o Direct custodian-to-custodian transfers from another traditional individual
retirement arrangement.
See "Tax information" later in this Prospectus for a more detailed discussion of
sources of contributions and contribution limitations. We may refuse to accept
any contribution if the sum of all contributions under all Income Manager(R)
contracts with the same annuitant would then total more than $1,500,000. We may
also refuse to accept any contributions if the sum of all contributions under
all Equitable Life annuity payout contracts that you own would then total more
than $2,500,000.
For information on when contributions are credited see "Dates and prices at
which contract events occur" later in this Prospectus.
OWNER AND ANNUITANT REQUIREMENTS
NQ CONTRACTS. The annuitant can be different from the contract owner. A joint
owner may also be named provided each owner is of legal age. Only natural
persons can be joint owners. This means that an entity such as a corporation or
a trust cannot be a joint owner.
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The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
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IRA CONTRACTS. The owner and the annuitant must be the same person. Joint
owners are not permitted. A joint annuitant may be named.
WHAT ARE YOUR INVESTMENTS UNDER THE CONTRACT?
FIXED MATURITY OPTIONS
To provide your income payments during the period certain, we allocate your
contributions to fixed maturity options that mature in consecutive date order.
When we allocate your contributions to the fixed maturity options they become
part of our general account assets. They accumulate interest at a rate to
maturity for each fixed maturity option. The total amount allocated to and
accumulated in each fixed maturity option is called the "fixed maturity amount."
The rate to maturity you will receive for each fixed maturity amount is the
interest rate in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals from
a fixed maturity option before the maturity date, we will make a market value
adjustment that may increase or decrease any fixed maturity amount you have left
in that fixed maturity option. We will discuss market value adjustment below and
in greater detail under "More information" later in this Prospectus.
For applications we receive under certain types of transactions, we may offer
you the opportunity to lock in rates to maturity on contributions.
On the maturity date of each of your fixed maturity options, your fixed maturity
amount (assuming you have not made any withdrawals) will equal your contribution
to each fixed maturity option plus interest, at the rate to maturity for that
contribution, to the date of calculation. This is the fixed maturity option's
"maturity value." Before maturity, the current value we will report for your
fixed maturity amount will reflect a market value adjustment. It will reflect
the market value adjustment that we would make if you were to withdraw all of
your fixed maturity amount on the date of the report. We call this your "market
adjusted amount."
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE. We can determine the
amount required to be allocated to each fixed maturity option in order to
produce specified maturity values. For example, we can tell you how much you
need to allocate per $100 of maturity value.
Guaranteed rates to maturity for new allocations as of February 15, 2002 and the
related price per $100 of maturity value were as follows:
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO PRICE
MATURITY DATE OF MATURITY AS PER $100 OF
MATURITY YEAR OF FEBRUARY 15, 2002 MATURITY VALUE
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2003 3.00% $ 97.09
2004 3.16% $ 93.97
2005 3.88% $ 89.20
2006 4.32% $ 84.43
2007 4.74% $ 79.32
2008 5.07% $ 74.31
2009 5.33% $ 69.50
2010 5.54% $ 64.94
2011 5.72% $ 60.60
2012 5.84% $ 56.67
2013 5.60% $ 54.89
2014 5.60% $ 51.98
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Contract features and benefits 9
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO PRICE
MATURITY DATE OF MATURITY AS PER $100 OF
MATURITY YEAR OF FEBRUARY 15, 2002 MATURITY VALUE
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2015 5.60% $ 49.22
2016 5.60% $ 46.61
2017 5.60% $ 44.13
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MARKET VALUE ADJUSTMENT. If you make any withdrawals (including surrender of
your contract or when we make deductions for withdrawal charges) from a fixed
maturity option before it matures we will make a market value adjustment which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount being
withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option; and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that we originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an explanation of how we calculate the market value adjustment, and
information concerning our general account under "More information" later in
this Prospectus. We provide an example of how we calculate the market value
adjustment in the Appendix at the end of this Prospectus.
SEPARATE ACCOUNT FOR THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. We provide
additional information about this separate account under "More information"
later in this Prospectus.
Off maturity date payments. Under Income Manager(R) contracts you may choose to
receive payments monthly, quarterly or annually. If you choose annual payments,
generally your payments will be made on February 15th as each fixed maturity
option matures. You may instead choose to have your annual payments made in a
month other than February. We refer to payments we make on an annual basis in
any month other than February and monthly or quarterly payments, as payments
made "off maturity dates." If you choose to have your payments made off maturity
dates, we will be required to begin making your payments before the maturity
date of a fixed maturity option. In planning for these payments we will allocate
a portion of your initial contribution to the separate account, but not to the
fixed maturity options contained in the separate account. We will credit these
amounts with interest at rates that will not be less than 3%.
After that, as each fixed maturity option expires we will transfer your maturity
value from the expired fixed maturity option and hold the maturity value in the
separate account. We will credit interest to these amounts at the same rate as
the rate to maturity that was credited in the expired fixed maturity option.
These amounts will then be used to provide for payments off maturity dates
during the period certain.
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Whether you choose monthly, quarterly, or annual payments, your payments will be
made on the 15th day of the month.
- --------------------------------------------------------------------------------
We will not make a market value adjustment to the amounts held in the separate
account to provide for payments off maturity dates.
WHAT ARE YOUR CONTRACT CHOICES?
We offer two versions of the Income Manager(R) payout annuity contracts from
which you may choose to receive your retirement income, a "life annuity with a
period certain" and a "period certain" annuity. We discuss both versions below.
LIFE ANNUITY WITH A PERIOD CERTAIN CONTRACT
This payout annuity contract provides you with guaranteed payments during the
period certain. When the period certain ends you will continue to receive
payments for as long as an annuitant is living. Payments based solely on the
life of one annuitant are called "single life" payments. You may also elect to
receive "joint and survivor" payments that are based on the lives of an
annuitant and a joint annuitant. These payments will continue as long as one of
the annuitants is living. Payments during the period certain are designed to pay
out your entire account value by the end of the period certain.
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"Single life" payments are made to you as long as the annuitant is living.
"Joint and survivor" payments continue as long as either annuitant is living.
For IRA contracts, if you are married, the joint annuitant must be your spouse.
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For annuitant ages at which the contracts are available see the chart under
"Your period certain" below.
ADDITIONAL CONTRIBUTIONS
If your annuity payments are set to begin on February 15, 2003 or later, and you
are age 78 or younger, you may make additional contributions of at least $1,000
at any time up until 15 days before your payments actually begin. If the
annuitant is over age 78 you can only make additional contributions during the
first contract year.
Under IRA contracts we will accept additional contributions that are "regular"
contributions, rollover contributions or direct transfers. Additional "regular"
contributions may no longer be made after you are age 70-1/2. If you make a
direct transfer or rollover contribution after you turn age 70-1/2 you must have
taken the required minimum distribution for the year before the contribution is
applied to this contract. See "Tax information" later in this Prospectus.
10 Contract features and benefits
If you are using the proceeds from another type of contract issued by us to
purchase this contract, you will not be permitted to make additional
contributions.
HOW WE ALLOCATE YOUR CONTRIBUTIONS
We determine the allocation of your contributions based on a number of factors.
They are:
o the amount of your contribution;
o the form of payments;
o the age and sex of the annuitant (and the age and sex of the joint annuitant,
if joint and survivor annuity payments are elected);
o the frequency of payments; and
o the period certain.
We then allocate your initial contribution among the fixed maturity options, the
separate account if we need to make payments to you off maturity dates, and the
"life contingent annuity." We will allocate your additional contributions in the
same manner. Additional contributions will increase the level of all future
payments. You may not change this allocation.
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The life contingent annuity continues the payments after the period certain
ends.
- --------------------------------------------------------------------------------
PAYMENTS
NQ CONTRACTS. If you are age 45 or older, you may elect to receive level
payments. You will receive level payments during the period certain and under
the life contingent annuity. However, if you are younger than age 59-1/2, there
are tax issues that you should consider before you purchase a contract. If you
are age 53-1/2 or older you may instead elect to receive payments that increase.
However, your payments may not start before you are age 59-1/2. Such payments
will increase by 10% every three years during the period certain on each third
anniversary of the date annuity payments begin. After the end of the period
certain, your first payment under the life contingent annuity will be 10%
greater than the final payment made under the period certain. See "Payments
after the period certain" below.
IRA CONTRACTS. Only level payments are available under IRA contracts.
Whether you choose monthly, quarterly or annual payments, you will usually begin
receiving payments one payment period from the contract date, unless you elect
otherwise as described under "Off maturity date payments" earlier in this
Prospectus. Your payments will always be made on the 15th day of the month.
However, if you are age 53-1/2 or older, you must defer the date your payments
will start until you are age 59-1/2. If you are at least age 59-1/2 you may
elect to defer the date your payments will start. Generally, you may defer
payments for a period of up to 72 months. This is called the deferral period.
Deferral of the payment start date permits you to lock in rates at a time when
you may consider current rates to be high, while permitting you to delay
receiving payments if you have no immediate need to receive income under your
contract.
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The deferral period together with the period certain may be referred to as a
"liquidity period." Unlike traditional life annuities that provide periodic
payments, you will be able to make withdrawals before the end of the period
certain. You may also choose to surrender your contract for its cash value while
keeping the life contingent annuity in effect.
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Before you decide to defer payments, you should consider the fact that the
amount of income you purchase is based on the rates to maturity in effect on the
date we allocate your contribution. Therefore, if rates rise during the deferral
period, your payments may be less than they would have been if you had purchased
a contract at a later date. Deferral of the payment start date is not available
if the annuitant is older than age 80. Under IRA contracts, if your deferred
payment start date is after you are age 70-1/2, you should consider the effect
that deferral may have on your required minimum distributions.
YOUR PERIOD CERTAIN
LEVEL PAYMENTS. Under level payments, you may select a period certain of not
less than 7 years nor more than 15 years. The maximum period certain available
based on the age of the annuitant when your contract is issued is as follows:
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NQ CONTRACTS
- --------------------------------------------------------------------------------
ANNUITANT'S AGE AT ISSUE* MAXIMUM PERIOD CERTAIN
- --------------------------------------------------------------------------------
45 through 70 15 years
71 through 75 85 less age at issue
76 through 80 10 years
81 through 83 90 less age at issue
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IRA CONTRACTS
- --------------------------------------------------------------------------------
ANNUITANT'S AGE AT ISSUE* MAXIMUM PERIOD CERTAIN
- --------------------------------------------------------------------------------
45 through 70 15 years
71 through 78 85 less age at issue
79 through 83 7 years
- --------------------------------------------------------------------------------
* For joint and survivor payments, the period certain is based on the age of
the younger annuitant.
The minimum and maximum period certain will be reduced by each year you defer
the date your payments will start.
INCREASING PAYMENTS. Under NQ contracts if you elect increasing payments, you do
not have a choice as to the period certain. Based on the age of the annuitant
when your contract is issued, your period certain will be as follows:
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ANNUITANT'S AGE AT ISSUE* PERIOD CERTAIN
- --------------------------------------------------------------------------------
53-1/2 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
- --------------------------------------------------------------------------------
* For joint and survivor payments, the period certain is based on the age of
the younger annuitant.
Contract features and benefits 11
If you elect increasing payments and defer the date payments will start, your
period certain will be as follows:
- --------------------------------------------------------------------------------
PERIOD CERTAIN BASED
ON DEFERRAL PERIOD
- --------------------------------------------------------------------------------
ANNUITANT'S AGE 1-36 37-60 61-72
AT ISSUE* MONTHS MONTHS MONTHS
- --------------------------------------------------------------------------------
59-1/2 through 70 12 years 9 years 9 years
71 through 75 9 years 9 years n/a
76 through 80 6 years 6 years n/a
81 through 83 n/a n/a n/a
- --------------------------------------------------------------------------------
* For joint and survivor payments, the period certain is based on the age of
the younger annuitant.
The annuitant ages at issue in the above table are also the annuitant ages for
which the contracts are available. Different ages may apply if you purchase a
contract by exercising a benefit under another type of contract that we issue.
PURCHASE RESTRICTIONS FOR JOINT AND SURVIVOR ANNUITY PAYMENTS
If you elect payments on a joint and survivor basis;
o the joint annuitant must also be the beneficiary under the contract. Under
IRA contracts, the joint annuitant must be your spouse;
o neither the annuitant nor the joint annuitant can be over age 83; and
o under level payments the joint and 100% to survivor form is only available
for the longest period certain we permit.
PAYMENTS AFTER THE PERIOD CERTAIN
After the end of the period certain, we will continue your payments under the
life contingent annuity if the annuitant or joint annuitant is living. Payments
continue throughout the annuitant's lifetime (or the lifetime of the joint
annuitant, if joint and survivor payments are elected) on the same payment
schedule (either monthly, quarterly or annually) as the payments you received
during the period certain.
- --------------------------------------------------------------------------------
The portion of your contribution allocated to the life contingent annuity does
not have a cash value or an account value and, therefore, does not provide for
withdrawals.
- --------------------------------------------------------------------------------
THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY (AFTER THE
PERIOD CERTAIN) AND PAYMENTS ARE MADE TO YOU ONLY IF THE ANNUITANT (OR JOINT
ANNUITANT) IS LIVING WHEN THE PAYMENTS ARE SCHEDULED TO BEGIN. THESE PAYMENTS
ARE ONLY MADE DURING THE ANNUITANT'S LIFETIME AND, IF APPLICABLE, THE LIFETIME
OF A JOINT ANNUITANT. THEREFORE, YOU SHOULD CONSIDER THE POSSIBILITY THAT NO
PAYMENTS WILL BE MADE TO YOU UNDER THE LIFE CONTINGENT ANNUITY IF THE ANNUITANT
(OR JOINT ANNUITANT) DOES NOT SURVIVE TO THE DATE PAYMENTS ARE TO BEGIN.
Under the life contingent annuity you may elect single life or joint and
survivor payments. Joint and survivor payments are available on a 100%, one-half
or two-thirds to survivor basis. If you elect increasing payments under NQ
contracts, your first payment under the life contingent annuity will be 10%
greater than the final payment under the period certain. After the period
certain we will increase your payments annually on each anniversary of the
payment start date under the life contingent annuity. We will base this increase
on the annual increase in the Consumer Price Index, but it will never be greater
than 3% per year.
EXAMPLE OF PAYMENTS
We provide the chart below to illustrate level payments under the contract using
the following assumptions:
(1) a male age 70 (who is both the contract owner and the
annuitant);
(2) single life annuity payments;
(3) a contribution of $100,000;
(4) no additional contributions; and
(5) a period certain of 15 years.
If you had a contract date of February 15, 2002, based on rates to maturity on
that date, an election of either monthly, quarterly, or annual payments with
payments starting one payment period from the contract date, the following level
payments would be provided:
- --------------------------------------------------------------------------------
PAYMENT PERIOD MONTHLY QUARTERLY ANNUAL
- --------------------------------------------------------------------------------
START DATE 3/15/02 5/15/02 2/15/03
Payment $670 $2,024 $8,335
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WITHDRAWALS
After the first contract year and before the end of the period certain, you may
take withdrawals from your account value. You may take one withdrawal per
contract year at any time during the contract year. The minimum amount you may
withdraw at any time is $1,000. If you request to withdraw more than 90% of your
current "cash value" we will treat it as a request to surrender your contract
for its cash value. See "Surrendering your contract to receive its cash value"
later in this Prospectus.
- --------------------------------------------------------------------------------
Your account value is the sum of your market adjusted amounts in each fixed
maturity option plus your amounts held in the separate account to provide for
payments off maturity dates. Your cash value is equal to your account value
minus any withdrawal charge.
- --------------------------------------------------------------------------------
Withdrawals in excess of a 10% free withdrawal amount may be subject to a
withdrawal charge. There is no free withdrawal amount if your contract is
surrendered for its cash value. Amounts withdrawn from a fixed maturity option
before its maturity date will result in a market value adjustment.
ALLOCATION OF WITHDRAWALS
We will subtract your withdrawal from all remaining fixed maturity options to
which your account value is allocated as well as from amounts held in the
separate account to provide for payments off maturity dates. As a result we will
reduce the amount of your payments and the length of your period certain. We
will also begin making payments to you under the life contingent annuity at an
earlier date. In order to achieve this result we will withdraw additional
amounts
12 Contract features and benefits
over the amount of the withdrawal you requested. We will withdraw these amounts
from the fixed maturity options and from amounts held in the separate account to
provide for payments off maturity dates and allocate them to the life contingent
annuity. The exact additional amount we withdraw will depend on how much is
necessary to assure that the same pattern of payments will continue in reduced
amounts for the annuitant's life, and if it applies, the life of the joint
annuitant. If you have elected increasing payments, the first increase in your
payments will take place no later than the date of the next planned increase.
EXAMPLE
The example below illustrates the effect of a withdrawal based on:
(1) a single contribution of $100,000 made on February 15, 2002;
(2) level annual payments of $7,720 to be made on February 15th of each year;
(3) joint and two-thirds to survivor payments for a male and female, both age
70;
(4) a period certain of 15 years; and
(5) a withdrawal made at the beginning of the fourth contract year of 25% of an
account value of $68,649.34 when the annuitants are age 73.
The requested withdrawal amount would be $17,162.33 ($68,649.34 x .25). In this
case, $6,864.93 ($68.649.34 x .10) would be the free withdrawal amount and could
be withdrawn free of a withdrawal charge. The balance of $10,297.40 ($17,162.33
- - $6,864.93) would be considered a withdrawal of a part of the contribution of
$100,000. This contribution would be subject to a 4.0% withdrawal charge of
$411.90 ($10,297.40 x .04). The account value after the withdrawal is $51,075.11
($68,649.34 - $17,162.33 - $411.90). The payments would be reduced to $6,307.22
and the remaining period certain would be reduced to 10 years from 12.
DEATH BENEFIT
When the annuitant dies before payments begin
Generally, when we receive satisfactory proof of the annuitant's death before
annuity payments begin we will pay the death benefit to the "beneficiary" named
in your contract. See "Your beneficiary" later in this Prospectus. If the joint
owner who is also the annuitant dies, we will consider the surviving owner to be
the beneficiary, taking the place of any other beneficiary designations.
We determine the amount of the death benefit payable to your beneficiary as of
the date we receive satisfactory proof of the annuitant's death and any required
instructions for the method of payment and any required forms necessary to
effect payment. The death benefit is the greater of:
(1) your account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option plus any
amounts held in the separate account to provide for payments off maturity
dates.
However, if you are the annuitant and your spouse is the joint owner or the
designated beneficiary under the contract, your spouse may elect to receive the
payments instead of taking the death benefit if payments have not been deferred,
or payments are scheduled to begin within one year. The payments will then begin
on the scheduled date. We will not make any payments under the life contingent
annuity after the annuitant's death unless you have elected the joint and
survivor form of payments. If you elect joint and one-half or joint and
two-thirds to survivor payments, at the death of either annuitant, we will
reduce the payments by one-half or one-third, whichever applies.
- --------------------------------------------------------------------------------
A death benefit is never payable under the life contingent annuity. The death
benefit applies only during the period certain.
- --------------------------------------------------------------------------------
When the annuitant dies after the annuity payments begin
If the annuitant dies after the payments begin, we will continue to make
payments during the period certain to either the joint owner or the designated
beneficiary, whichever applies. The payments will be made on the same schedule
that was in effect before the annuitant's death. If you elected joint and
survivor payments under the life contingent annuity, the payments will be made
as long as one of the annuitants is living.
At the beneficiary's option, payments during the period certain may be
discontinued and paid in a single sum. If the single sum is elected within one
year after the annuitant's death, the single sum will be equal to the greater
of:
(1) the account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option, plus
any amounts held in the separate account to provide for payments off
maturity dates.
If a single sum is elected and there is a joint annuitant, we will begin making
payments to you under the life contingent annuity at an earlier date. These
payments will be made in reduced amounts to compensate for the earlier start
date.
When the NQ contract owner who is not the annuitant dies before the annuitant
and before the annuity payments begin
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the new contract owner. You may name
a different person that will become the owner at any time by sending an
acceptable written form to our Processing Office. If the contract is jointly
owned and the first owner to die is not the annuitant, the surviving owner
becomes the sole contract owner. This person will be considered the beneficiary
for purposes of the distribution rules described below. The surviving owner
automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the deceased owner (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
designated beneficiary for this purpose, the entire interest in the contract
must be distributed under the following rules:
Contract features and benefits 13
o The cash value in the contract must be fully paid to the designated
beneficiary (new owner) within five years after your death (or in a joint
ownership situation, the death of the first owner to die).
o The new owner may instead elect to receive payments as a life annuity (or
payments for a period certain of not longer than the new owner's life
expectancy), with payments beginning no later than one year following the
non-annuitant owner's death. Unless the alternative is elected, we will pay
any cash value in the contract as a single sum five years after your death
(or the death of the first owner to die).
If the surviving spouse is the designated beneficiary or joint owner, the
surviving spouse may elect to continue the contract. No distributions are
required as long as the surviving spouse and the annuitant are living.
When the NQ contract owner who is not the annuitant dies after the annuity
payments begin.
If your death occurs after annuity payments begin, payments will continue to be
made during the period certain to the designated beneficiary, or in the case of
joint owners, to the surviving owner. In either case this person becomes the new
contract owner. The payments will be made on the same payment schedule that was
in effect before your death. After the period certain, lifetime payments will be
made under the life contingent annuity for as long as the annuitant (or joint
annuitant) is living.
SURRENDERING YOUR LIFE ANNUITY WITH PERIOD CERTAIN CONTRACT
You may surrender your contract for its cash value at any time during the period
certain and receive lifetime payments after that under the life contingent
annuity. Once your contract is surrendered, the date your payments are to start
under the life contingent annuity will be moved forward to the date when you
were supposed to receive the next payment under the period certain. However,
your payments will be made in reduced amounts. Once your contract is
surrendered, we will return it to you with a notation that the life contingent
annuity is still in effect. You may not surrender the life contingent annuity.
PERIOD CERTAIN CONTRACT
You may purchase the period certain contract if you are age 59-1/2 or older. The
annuitant must be at least age 59-1/2, but not older than age 78. This contract
provides you with level guaranteed payments for a period certain that you
select. The minimum period certain you may select is 7 years and the maximum
period certain is 15 years. If the annuitant is over age 70 when the contract is
issued, the maximum period certain you may select is 85 less the annuitant's age
when the contract is issued.
ADDITIONAL CONTRIBUTIONS
Additional contributions are not permitted under the contract.
HOW WE ALLOCATE YOUR CONTRIBUTIONS
Based on the amount of your single contribution and the period certain you
select, we allocate your contribution among the fixed maturity options and, if
necessary, to the separate account to provide for payments off maturity dates.
You may not change this allocation. See "More information" later in this
Prospectus for an example of payments.
PAYMENTS
Whether you choose monthly, quarterly, or annual payments, your payments
normally will start one payment period from the contract date unless you elect
otherwise as described under "Off maturity date payments" earlier in this
Prospectus. Your payments will always be made on the 15th day of the month.
- --------------------------------------------------------------------------------
The period certain may also be referred to as the "liquidity period" because you
have access to your money through withdrawals or surrender of your contract.
- --------------------------------------------------------------------------------
WITHDRAWALS
After the first contract year you may take withdrawals from your account value.
You may take one withdrawal per contract year at any time during the contract
year. The minimum amount you may withdraw at any time is $2,000 or 25% of your
current cash value if it produces a larger amount. If you request to withdraw
more than 90% of your current cash value we will treat it as a request for
surrender of the contract for its cash value. See "Surrendering your contract to
receive its cash value" later in this Prospectus. Any amounts withdrawn from a
fixed maturity option, before its maturity date, will result in a market value
adjustment. See "Market value adjustment" earlier in this Prospectus.
Withdrawals made during the first seven contract years may be subject to a
withdrawal charge. There is no free withdrawal amount under the period certain
contracts.
ALLOCATION OF WITHDRAWALS
We will subtract your withdrawals pro rata from all remaining fixed maturity
options to which your account value is allocated as well as from amounts held in
the separate account to provide for payments off maturity dates. As a result,
your payments will continue in reduced level amounts over the remaining term of
the period certain.
DEATH BENEFIT
When the annuitant dies before payments begin
Generally, when we receive satisfactory proof of the annuitant's death before
annuity payments begin we will pay the death benefit to the beneficiary named in
your contract. See "Your beneficiary" later in this Prospectus. If the joint
owner who is also the annuitant dies, we will consider the surviving owner to be
the beneficiary, taking the place of any other beneficiary designations.
We determine the amount of the death benefit payable to your beneficiary as of
the date we receive satisfactory proof of the annuitant's death and any required
instructions for the method of payment and any required forms necessary to
effect payment. The death benefit is the greater of:
(1) your account value; and
14 Contract features and benefits
(2) the sum of the fixed maturity amounts in each fixed maturity option plus any
amounts held in the separate account to provide for payments off maturity
dates.
However, if you are the annuitant and your spouse is the joint owner or the
designated beneficiary under the contract, your spouse may elect to receive the
payments instead of taking the death benefit. The payments will then begin on
the scheduled date.
When the annuitant dies after the annuity payments begin
If the annuitant dies after the payments begin, payments will continue to be
made during the period certain to either the joint owner or the designated
beneficiary, whichever applies. The payments will be made on the same schedule
that was in effect before the annuitant's death.
At the beneficiary's option, payments may be discontinued and paid in a single
sum. If the single sum is elected within one year after the annuitant's death,
the single sum will be equal to the greater of:
(1) the account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option plus any
amounts held in the separate account to provide for payments off maturity
dates.
When the NQ contract owner who is not the annuitant dies before the annuitant
and before the annuity payments begin
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the new contract owner. You may
instead name a different person to become the new contract owner at any time by
sending an acceptable written form to our Processing Office. If the contract is
jointly owned and the first owner to die is not the annuitant, the surviving
owner becomes the sole contract owner. This person will be considered the
beneficiary for purposes of the distribution rules described below. The
surviving owner automatically takes the place of any other beneficiary
designation.
Unless the surviving spouse of the deceased owner (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
designated beneficiary for this purpose, the entire interest in the contract
must be distributed under the following rules:
o The cash value in the contract must be fully paid to the designated
beneficiary (new owner) within five years after your death (or in a joint
ownership situation, the death of the first owner to die).
o The new owner may elect instead to receive payments as a life annuity (or
payments for a period certain of not longer than the new owner's life
expectancy), with payments beginning no later than one year following the
non-annuitant owner's death. Unless this alternative is elected, we will pay
any cash value in the contract as a single sum five years after your death
(or the death of the first owner to die).
If the surviving spouse is the designated beneficiary or joint owner, the
surviving spouse may elect to continue the contract. No distributions are
required as long as the surviving spouse and the annuitant are living.
When the NQ contract owner who is not the annuitant dies after the annuity
payments begin
If your death occurs after annuity payments begin, payments will continue to be
made during the period certain to the designated beneficiary or in the case of
joint owners to the surviving owner. In either case, this person becomes the new
contract owner and receives the payments.
Contract features and benefits 15
2. Other benefits and features of the contracts
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's qualified plan or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a bank in the
U.S. in U.S. dollars, and made payable to Equitable Life. We do not accept third
party checks endorsed to us except for rollover contributions, tax-free
exchanges or trustee checks that involve no refund. All checks are subject to
our ability to collect the funds. We reserve the right to reject a payment if it
is received in an unacceptable form.
For your convenience, we will accept initial and additional contributions, if
applicable, by wire transmittal from certain broker-dealers who have agreements
with us for this purpose. These methods of payment are discussed in detail under
"More information" later in this Prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days, we will inform the
financial professional submitting the application, on your behalf. We will then
return the contribution to you unless you specifically direct us to keep your
contribution until we receive the required information.
- --------------------------------------------------------------------------------
Generally our "business day" is any day on which the New York Stock Exchange is
open for trading. A business day does not include any day we choose not to open
due to emergency conditions. We may also close early due to emergency
conditions.
- --------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the entire value of an existing nonqualified deferred annuity
contract (or life insurance or endowment contract) to purchase an Income
Manager(R) NQ contract in a tax-deferred exchange if you follow certain
procedures as shown in the form that we require you to use. Please note that the
IRS may not apply tax-free treatment to partial 1035 exchanges. Also see "Tax
information" later in this Prospectus.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our Processing Office within 10 days after you receive it. In some
states, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract. Your
account value reflects any positive or negative market value adjustments in the
fixed maturity options through the date we receive your contract. Under the life
annuity with a period certain your refund will also include any amount applied
to the life contingent annuity. However, some states require that we refund the
full amount of your contribution (not including any investment gain or loss).
For IRA contracts returned to us within seven days after you receive it, we are
required to refund the full amount of your contribution.
If you cancel your contract during the free look period, we may require that you
wait six months before you may apply for a contract with us again.
Please see "Tax information" later in this Prospectus for possible consequences
of cancelling your contract.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time during the
period certain. Your cash value is equal to your account value minus any
withdrawal charge. There is no free withdrawal amount if you surrender your
contract.
For a surrender to be effective, we must receive your written request and your
contract at our Processing Office. We will determine your cash value on the date
we receive the required information. All benefits under your contract will
terminate as of that date unless you have elected the life contingent annuity.
See "Surrendering your life annuity with a period certain contract" earlier in
this Prospectus.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments within seven days of the
transaction to which the request relates. We can defer payment of any portion of
the account value (other than for death benefits) for up to six months while you
are living. We also may defer payments for any reasonable amount of time (not to
exceed 15 days) while we are waiting for a contribution check to clear.
16 Other benefits and features of the contracts
3. Charges
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WITHDRAWAL CHARGES
A withdrawal charge applies in two circumstances: (1) if you make a withdrawal
during a contract year and it exceeds any applicable free withdrawal amount,
described below, or (2) if you surrender your contract to receive its cash
value.
The withdrawal charge equals a percentage of each contribution (or single
contribution) withdrawn. The percentage that applies depends on how long each
contribution has been invested in the contract. We determine the withdrawal
charge separately for each contribution according to the following table:
- ----------------------------------------------------------------------------------------------
CONTRACT YEAR
- ----------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- ----------------------------------------------------------------------------------------------
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
- ----------------------------------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year in
which we receive a contribution as "contract year 1." Amounts withdrawn up to
the free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. However, federal income tax rules treat
earnings under your contract as withdrawn first. See "Tax information" later in
this Prospectus.
We deduct the withdrawal charge from your account value in proportion to the
amount withdrawn from each fixed maturity option and any amounts held in the
separate account to provide for payments off maturity dates. In order to give
you the exact dollar amount of the withdrawal you request, we deduct the amount
of the withdrawal and the amount of the withdrawal charge from your account
value. Any amount deducted to pay a withdrawal charge is also subject to a
withdrawal charge.
The withdrawal charge does not apply to the 10% free withdrawal amount described
below.
THE 10% FREE WITHDRAWAL AMOUNT APPLIES ONLY TO LIFE ANNUITY WITH A PERIOD
CERTAIN CONTRACTS. IT DOES NOT APPLY TO YOUR PERIOD CERTAIN CONTRACT OR IF YOU
SURRENDER YOUR CONTRACT TO RECEIVE ITS CASH VALUE.
Under life annuity with a period certain contracts, each contract year you can
withdraw up to 10% of your account value without paying a withdrawal charge.
This 10% free withdrawal amount is determined using your account value on the
most recent contract date anniversary.
AMOUNTS APPLIED FROM OTHER CONTRACTS ISSUED BY EQUITABLE LIFE
LIFE ANNUITY WITH A PERIOD CERTAIN CONTRACT. If you own certain types of
contracts that we issue, you may apply the entire account value under those
contracts to purchase the life annuity with a period certain contract provided
the issue age and payment restrictions for the new contract are met. If you
apply your account value at a time when the dollar amount of the withdrawal
charge under such other contract is greater than 2% of remaining contributions
(after withdrawals), we reserve the right to waive the remaining withdrawal
charge. However, a new withdrawal charge schedule will apply under the new
contract. For purposes of the withdrawal charge schedule, the year in which your
account value is applied under the life annuity with a period certain contract
will be "contract year 1." If you apply your account value when the dollar
amount of the withdrawal charge is 2% or less, we reserve the right to waive the
withdrawal charges under the new contract. You should consider the timing of
your purchase as it relates to the potential for withdrawal charges under the
life annuity with a period certain contract.
PERIOD CERTAIN CONTRACT. If you own certain types of contracts that we issue,
you may apply your entire account value to purchase the period certain contract
once any withdrawal charges are no longer in effect under the other contracts.
No withdrawal charges will apply under the period certain contract.
To purchase any Income Manager(R) contract we require that you return your
original contract to us. A new Income Manager(R) contract will be issued putting
this annuity into effect.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed
upon us, such as premium taxes in your state. We deduct the charge from your
contributions. The current tax charge that might be imposed varies by state and
ranges from 0% to 3.5% (1% in Puerto Rico).
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal charge
or change the minimum initial contribution requirements. We also may increase
the rates to maturity for the fixed maturity options and reduce purchase rates
for the life contingent annuity. Group arrangements include those in which a
trustee or an employer, for example, purchases contracts covering a group of
individuals on a group basis. Sponsored arrangements include those in which an
employer allows us to sell contracts to its employees or retirees on an
individual basis. IRA contracts are not available for group arrangements.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
Charges 17
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation in the withdrawal charge will reflect differences in costs
or services and will not be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules, the
Employee Retirement Income Security Act of 1974, or both. We make no
representations with regard to the impact of these and other applicable laws on
such programs. We recommend that employers, trustees, and others purchasing or
making contracts available for purchase under such programs seek the advice of
their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate withdrawal charges when sales are made in a manner
that results in savings of sales and administrative expenses. This may include
sales through persons who are compensated by clients for recommending
investments and who receive no commission or reduced commissions in connection
with the sale of the contracts. We will not permit a reduction or elimination of
the withdrawal charge where it will be unfairly discriminatory.
18 Charges
4. Payment of death benefit
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YOUR BENEFICIARY
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for change is signed.
YOUR ANNUITY PAYOUT OPTIONS
If the annuitant dies before annuity payments begin, your beneficiary may elect
to apply the death benefit to an annuity payout option. We offer several annuity
payout options to choose from. Restrictions apply, depending on the type of
contract you own.
ANNUITY PAYOUT OPTIONS
Your beneficiary can choose from among the following annuity payout options:
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no death benefit with this payout
option, it provides the highest monthly payment of any of the life annuity
options, so long as the annuitant is living.
o Life annuity -- period certain: An annuity that guarantees payments for the
rest of the annuitant's life, and, if the annuitant dies before the end of a
selected period of time ("period certain"), payments to the beneficiary will
continue for the balance of the period certain.
o Life annuity -- refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments continue
to the beneficiary until that amount has been recovered.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This option does not
guarantee payments for the rest of the annuitant's life. It does not permit
any repayment of the unpaid principal, so you cannot elect to receive part
of the payments as a single sum payment with the rest paid in monthly
annuity payments.
The life annuity, life annuity -- period certain and the life annuity -- refund
certain are available on either single life or joint and survivor life basis.
The joint and survivor life annuity guarantees payments for the rest of the
annuitant's life and, after the annuitant's death, continuation of payments to
the survivor.
All of the above annuity payout options are available as fixed annuities. With
fixed annuities, we guarantee fixed annuity payments that will be based either
on the tables of guaranteed annuity payments in your contract or on our then
current annuity rates, whichever is more favorable for the annuitant.
When the beneficiary selects a payout option, we will issue a separate written
agreement confirming the beneficiary's right to receive annuity payments. We
require the return of the contract before annuity payments begin.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity, the type of annuity chosen and, in the case of a life annuity, the
annuitant's age (or the annuitant's and joint annuitant's ages) and in certain
instances, the sex of the annuitant(s). Once a payout option has been chosen and
payments begin, no change can be made.
At the time that the beneficiary elects a payout option if the amount to be
applied is less than $2,000, or the initial payment under the form elected is
less than $20 monthly, we reserve the right to pay the account value in a single
sum rather than as payments under the payout option chosen.
Payment of death benefit 19
5. Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Income Manager(R) contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract, whether
NQ or traditional IRA. Therefore, we discuss the tax aspects of each type of
contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
President Bush signed the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") on June 7, 2001. Many of the provisions of EGTRRA begin to be
effective on January 1, 2002 and are phased in during the first decade of the
twenty-first century. In the absence of future legislation, all of the
amendments made by EGTRRA will no longer apply after December 31, 2010, and the
law in effect in 2001 will apply again. In general, EGTRRA liberalizes
contributions that can be made to all types of tax-favored retirement plans. In
addition to increasing amounts that can be contributed and permitting
individuals over age 50 to make additional contributions, EGTRRA also permits
rollover contributions to be made between different types of tax-favored
retirement plans. Please discuss with your tax advisor how EGTRRA affects your
personal financial situation.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal, or as an annuity
payment. THIS CONTRACT IS INTENDED TO BE A PAYOUT ANNUITY. HOWEVER, BECAUSE YOU
MAY BE ABLE TO DELAY BEGINNING PAYMENTS, RULES GOVERNING DEFERRED ANNUITY
CONTRACTS COULD APPLY. Earnings in a deferred annuity contract are taxable even
without a distribution if you transfer a contract, for example, as a gift to
someone other than your spouse (or former spouse).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract when figuring out the taxable amount of any distribution
from any of those contracts.
Corporations, partnerships, trusts and other non-natural persons generally
cannot defer the taxation of current income credited to the contract unless an
exception under the federal income tax rules apply. There is an exception for
immediate annuities.
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Immediate annuities are generally annuities in which payments begin within one
year from purchase and provide for a series of substantially equal payments made
at least annually.
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ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get the remaining portion without paying taxes on it. This is your
"investment in the contract." Generally, your investment in the contract equals
the contributions you made, less any amounts you previously withdrew that were
not taxable.
The tax-free portion of each payment is determined by (1) dividing your
investment in the contract by the total amount you are expected to receive out
of the contract, and (2) multiplying the result by the amount of the payment.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
WITHDRAWALS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o The contract which is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
20 Tax information
o The owner and the annuitant are the same under the source contract and the
Income Manager(R) contract. If you are using a life insurance or endowment
contract the owner and the insured must be the same on both sides of the
exchange transaction.
The tax basis of the source contract carries over to the Income Manager(R) NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange. You should also
note that the Internal Revenue Service has announced its intention to challenge
transactions where taxpayers enter into serial partial exchanges and
annuitizations in order to avoid income or penalties applicable to annuity
contracts. Although the IRS has not yet issued specific guidance on this point,
you should discuss with your tax adviser before you purchase an Income
Manager(R) contract intended to be a payout annuity with partial 1035 exchange
proceeds.
SURRENDERS
If you surrender or cancel the NQ contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
WITHDRAWALS MADE AFTER ANNUITY PAYMENTS BEGIN
If you make a withdrawal that terminates all periodic payments due, it will be
taxable as a complete surrender as discussed above. If you make a withdrawal
that does not terminate all periodic payments due, then a portion of the
remaining reduced payments will be eligible for tax-free recovery of investment.
Also, a portion of the withdrawal may not be taxable.
DEATH BENEFIT PAYMENT MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit" and
"When the NQ contract owner who is not the annuitant dies before the annuitant
and before the annuity payments begin" earlier in this Prospectus. The tax
treatment of a death benefit taken as a single sum is generally the same as the
tax treatment of a withdrawal from or surrender of your contract. The tax
treatment of a death benefit taken as annuity payments is generally the same as
the tax treatment of annuity payments under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59-1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59-1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and a beneficiary; or
o payments under an immediate annuity.
Periodic annuity payments we make to you from the life annuity with a period
certain while you are under age 59-1/2 should qualify for the "substantially
equal payments for life" exception noted above. However, this exception may not
apply if you take a withdrawal, surrender your contract or change the payment
pattern in any way.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to a particular
portfolio within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to
nonqualified annuity contract. In that case, income and gains attributable to
such portfolio shares would be included in your gross income for federal income
tax purposes.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S.-source. A Puerto
Rico resident is subject to U.S. taxation on such U.S.-source income. Only
Puerto Rico-source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
computation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets typically include mutual
funds and/or individual stocks and securities in a custodial account and bank
certificates of deposit in a trusteed account. In an individual retirement
annuity, an insurance company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
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The Income Manager(R) IRA contract is available in traditional IRA form only.
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Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only
Tax information 21
ones who can receive the IRA's benefits or payments. All types of IRAs qualify
for tax deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This Publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS website (www.irs.gov).
Equitable Life designs its Traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. This
prospectus contains the information that the IRS requires you to have before you
purchase an IRA. This section of the prospectus covers some of the special tax
rules that apply to IRAs.
The Income Manager(R) IRA contract has been approved by the IRS as to form for
use as a traditional IRA. This IRS approval is a determination only as to the
form of the annuity. It does not represent a determination of the merits of the
annuity as an investment. The IRS approval does not address every feature
possibly available under the Income Manager(R) IRA contract. Because the IRS has
announced that issuers of formally approved IRAs must amend their contracts to
reflect recent tax law changes and resubmit the amended contracts to retain such
formal approval, Equitable Life intends to comply with such requirement during
2002.
CANCELLATION
You can cancel an Income Manager(R) IRA contract by following the directions
under "Your right to cancel within a certain number of days" earlier in the
Prospectus. If you cancel an IRA contract, we may have to withhold tax, and we
must report the transaction to the IRS. A contract cancellation could have an
unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES ("TRADITIONAL IRAS")
CONTRIBUTIONS TO TRADITIONAL IRAS
Individuals may make three different types of contributions to a traditional
IRA:
o "regular" contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other Traditional IRAs ("direct
transfers").
We require that your initial contribution to the Income Manager(R) traditional
IRA contract must be either a rollover or a direct custodian-to-custodian
transfer. See "Rollover and transfer contributions to traditional IRAs" below.
Any additional contributions you make may be rollovers, direct transfers, or
regular traditional IRA contributions.
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $3,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) for 2002. When your earnings are
below $3,000 your earned income or compensation for the year is the most you can
contribute. This limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a traditional IRA. You cannot make regular
traditional IRA contributions for the tax year in which you reach age 70-1/2 or
any tax year after that.
You may be eligible to make an additional "catch-up contribution" of up to $500
for 2002, if you are at least age 50 at any time during 2002, but under age
70-1/2 (that is, if you were born from July 1, 1931 to December 31, 1952).
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs). Even if one spouse has no compensation or compensation under
$3,000, married individuals filing jointly can contribute up to $6,000 for 2002
to any combination of traditional IRAs and Roth IRAs. (Any contributions to Roth
IRAs reduce the ability to contribute to traditional IRAs and vice versa.) The
maximum amount may be less if earned income is less and the other spouse has
made IRA contributions. No more than a combined total of $3,000 can be
contributed annually to either spouse's traditional and Roth IRAs. Each spouse
owns his or her traditional IRAs and Roth IRAs even if the other spouse funded
the contributions. A working spouse age 70-1/2 or over can contribute up to the
lesser of $3,000 or 100% of "earned income" to a traditional IRA for a
non-working spouse until the year in which the non-working spouse reaches age
70-1/2. Catch-up contributions may be made as described above for spouses who
are at least age 50 but under age 70-1/2 at any time during calendar year 2002.
DEDUCTIBILITY OF CONTRIBUTIONS
The amount of traditional IRA contributions that you can deduct for a tax year
depends on whether you are covered by an employer-sponsored tax-favored
retirement plan, as defined under special federal income tax rules. Your Form
W-2 will indicate whether or not you are covered by such a retirement plan.
If you are not covered by a retirement plan during any part of the year, you can
make fully deductible contributions to your traditional IRAs for 2002 up to
$3,000 or, if less, your earned income. (The dollar limit is $3,500 for people
eligible to make age 50-70-1/2 catch-up contributions.)
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income ("AGI") is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs.
Your fully deductible contribution can be up to $3,000 for 2002 or, if less,
your earned income. (The dollar limit is $3,500 for people eligible to make age
50-70-1/2 catch-up contributions.)
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
22 Tax information
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct any
of your regular contribution to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for IRA contributions phases out with AGI between
$34,000 and $44,000 in 2002. This range will increase every year until 2005 when
the range is $50,000 - $60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $54,000 and $64,000 in 2002. This
range will increase every year until 2007 when the range is $80,000 - $100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible traditional IRA
contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of between
$150,000 and $160,000.
To determine the deductible amount of the contribution in 2002, you determine
AGI and subtract $34,000 if you are single, or $54,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
($10,000-excess AGI) times $3,000 (or earned equals the adjusted
-------------------- x income, if less = deductible
divided by $10,000 or $3,500, if contribution
applicable) limit
ADDITIONAL "SAVER'S CREDIT" FOR CONTRIBUTIONS TO A TRADITIONAL IRA
Beginning in 2002, you may be eligible for a nonrefundable income tax credit for
contributions you make to a traditional IRA. If you qualify, you may take this
credit even though your traditional IRA contribution is already fully or
partially deductible. To take advantage of this "saver's credit" you must be age
18 or over before the end of 2002, you cannot be a full-time student or claimed
as a dependent on another's tax return, and your adjusted gross income cannot
exceed $50,000. The amount of the tax credit you can get varies from 10% of your
contribution to 50% of your contribution, and depends on your income tax filing
status and your adjusted gross income. The maximum annual contribution eligible
for the saver's credit is $2,000. If you and your spouse file a joint return,
and each of you qualifies, each is eligible for a maximum annual contribution of
$2,000. Your saver's credit may also be reduced if you take or have taken a
taxable distribution from any plan eligible for a saver's credit contribution --
even if you make a contribution to one plan and take the distribution from
another plan -- during the "testing period." The "testing period" begins two
years before the year for which you make the contribution and ends when your tax
return is due for the year for which you make the contribution.
NONDEDUCTIBLE CONTRIBUTIONS
If you are not eligible to deduct part or all of the traditional IRA
contribution, you may still make nondeductible contributions on which earnings
will accumulate on a tax-deferred basis. The combined deductible and
nondeductible contributions to your traditional IRA (or the non-working spouse's
traditional IRA) may not, however, exceed the maximum $3,000 per person limit
for 2002. For 2002, the dollar limit is $3,500 for people eligible to make age
50-70-1/2 "catch-up" contributions. See "Excess contributions" below. You must
keep your own records of deductible and nondeductible contributions in order to
prevent double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records pertaining
to such contributions until interests in all traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE CONTRIBUTIONS
If you file your tax returns on a calendar year basis like most taxpayers, you
have until the April 15th return filing deadline (without extensions) of the
following calendar year to make your regular traditional IRA contributions for a
tax year.
ROLLOVER AND TRANSFER CONTRIBUTIONS TO TRADITIONAL IRAS
Rollover contributions may be made to a traditional IRA from these "eligible
retirement plans":
o qualified plans;
o governmental 457(b) plans (beginning in 2002);
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial accounts);
and
o other traditional IRAs.
Direct transfer contributions may only be made directly from one traditional IRA
to another.
Any amount contributed to a traditional IRA after you reach age 70-1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
ROLLOVERS FROM "ELIGIBLE RETIREMENT PLANS" OTHER THAN TRADITIONAL IRAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll it
over to a traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell the plan trustee or custodian of the eligible retirement plan
Tax information 23
to send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA, qualified plan or governmental 457(b) plan are
eligible rollover distributions, unless the distributions are:
o "required minimum distributions" after age 70-1/2 or retirement; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o a hardship withdrawal; or
o corrective distributions which fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
You should discuss with your tax advisor whether you should consider rolling
over funds from one type of tax qualified retirement plan to another, because
the funds will generally be subject to the rules of the recipient plan. For
example, funds in a governmental 457(b) plan are not subject to the additional
10% federal income tax penalty for premature distributions, but they may become
subject to this penalty if you roll the funds to a non-governmental 457(b) plan
and subsequently take a premature distribution.
ROLLOVERS OF AFTER-TAX CONTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN
TRADITIONAL IRAS
Beginning in 2002, any after-tax contributions you have made to a qualified plan
or TSA (but not a governmental 457(b) plan) may be rolled over to a traditional
IRA (either in a direct rollover or a rollover you do yourself). When the
recipient plan is a traditional IRA, you are responsible for recordkeeping and
calculating the taxable amount of any distributions you take from that
traditional IRA. See "Taxation of Payments" later in this Prospectus under
"Withdrawals, payments and transfers of funds out of traditional IRAs."
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $3,000 for 2002 (or $3,500 if you are age
50-70-1/2);
o regular contributions of more than earned income for the year, if that
amount is under $3,000 for 2002 (or $3,500 if you are age 50-70-1/2);
o regular contributions to a traditional IRA made after you reach age 70-1/2;
and
o rollover contributions of amounts which are not eligible to be rolled over,
for example, minimum distributions required to be made after age 70-1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income. It
is also not subject to the 10% additional penalty tax on early distributions
discussed under "Early distribution penalty tax" later in this Prospectus. You
do have to withdraw any earnings that are attributed to the excess contribution.
The withdrawn earnings would be included in your gross income and could be
subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from an eligible retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
No federal income tax law restrictions on withdrawals
You can withdraw any or all of your funds from a traditional IRA at any time.
You do not need to wait for a special event like retirement.
TAXATION OF PAYMENTS
Earnings in traditional IRAs are not subject to federal income tax until you or
your beneficiary receive them. Taxable payments or distributions include
withdrawals from your contract, surrender of your contract and annuity payments
from your contract. Death benefits are also taxable. Except as discussed below,
the total amount of any distribution from a traditional IRA must be included in
your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA (it
does not have to be to this particular traditional IRA
24 Tax information
contract), those contributions are recovered tax free when you get distributions
from any traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in which
you have received a distribution from any traditional IRA, you calculate the
ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA or
other eligible retirement plan which agrees to accept the funds, (See
"Rollovers from eligible retirement plans other than traditional IRAs" under
"Rollover and transfer contributions to traditional IRAs" above).
Beginning in 2002, the following are eligible to receive rollovers of
distributions from a traditional IRA; a qualified plan, a TSA or a governmental
EDC plan. After-tax contributions in a traditional IRA cannot be rolled from
your traditional IRA into, or back into, a qualified plan, TSA or governmental
EDC plan. Before you decide to roll over a distribution from a traditional IRA
to another eligible retirement plan, you should check with the administrator of
that plan about whether the plan accepts rollovers and, if so, the types it
accepts. You should also check with the administrator of the receiving plan
about any documents required to be completed before it will accept a rollover.
Since the Income Manager(R) annuity is intended to be a payout contract, it may
not be an appropriate contract if you intend to roll over funds later.
Allocation of funds to the life contingent annuity may make it difficult for you
to roll the contract over to another eligible retirement plan.
Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to distributions from
qualified plans. If you might be eligible for such tax treatment from your
qualified plan, you may be able to preserve such tax treatment even though an
eligible rollover from a qualified plan is temporarily rolled into a "conduit
IRA" before being rolled back into a qualified plan. See your tax advisor.
REQUIRED MINIMUM DISTRIBUTIONS
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The IRS and Treasury have recently proposed revisions to the minimum
distribution rules. We expect these rules to be finalized in 2002. Since the
proposed revisions permit IRA owners and beneficiaries to apply the proposed
revisions to distributions for calendar year 2001, the discussion below reflects
the proposed revisions.
- --------------------------------------------------------------------------------
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs for the year in which you turn age
70-1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70-1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70-1/2, or to delay taking
it until the first three-month period in the next calendar year (January 1 -
April 1). Distributions must start no later than your "Required Beginning Date,"
which is April 1st of the calendar year after the calendar year in which you
turn age 70-1/2. If you choose to delay taking the first annual minimum
distribution, then you will have to take two minimum distributions in that year
- -- the delayed one for the first year and the one actually for that year. Once
minimum distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions -- "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by a
number corresponding to your age from an IRS table. This gives you the required
minimum distribution amount for that particular IRA for that year. If your
spouse is your sole beneficiary and more than 10 years younger than you, the
dividing number you use may be from another IRS table and may produce a smaller
lifetime required minimum distribution amount. Regardless of the table used, the
required minimum distribution amount will vary each year as the account value
and the divisor change. If you initially choose an account-based method, you may
later apply your traditional IRA funds to a life annuity-based payout with any
certain period not exceeding remaining life expectancy.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? No, we do not automatically make distributions from your
contract before your annuity payments begin.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particu-
Tax information 25
lar IRA. You can add these required minimum distribution amount calculations
together. As long as the total amount you take out every year satisfies your
overall traditional IRA required minimum distribution amount, you may choose to
take your annual required minimum distribution from any one or more traditional
IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70-1/2 is approaching. If you do
not select a method with us, we will assume you are taking your required minimum
distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? These could
vary on whether you die before or after your Required Beginning Date for
lifetime required minimum distribution payments, and the status of your
beneficiary.
INDIVIDUAL BENEFICIARY. Regardless of whether your death occurs before or after
your Required Beginning Date, under the revised proposed rules, an individual
death beneficiary calculates annual post-death required minimum distribution
payments based on the beneficiary's life expectancy using the "term certain
method." That is, he or she determines his or her life expectancy using the life
expectancy tables as of the calendar year after the owner's death and reduces
that number by one each subsequent year.
If you die before your Required Beginning Date, the revised proposed rules
permit any individual beneficiary, including a spousal beneficiary, to elect
instead to apply the "5-year rule." Under this rule, instead of annual payments
having to be made beginning with the first in the year following the owner's
death, the entire account must be distributed by the end of the fifth year
following the year of the owner's death. No distribution is required before that
fifth year.
SPOUSAL BENEFICIARY. If you die after your Required Beginning Date, and your
death beneficiary is your surviving spouse, your spouse has a number of choices.
The revised proposed rules permit post-death distributions to be made over your
spouse's single life expectancy. Any amounts distributed after that surviving
spouse's death are made over the spouse's life expectancy calculated in the year
of his/her death, reduced by one for each subsequent year. In some
circumstances, your surviving spouse may elect to become the owner of the
traditional IRA and halt distributions until he or she reaches age 70-1/2, or
roll over amounts from your traditional IRA into his/her own traditional IRA or
other eligible retirement plan.
If you die before your Required Beginning Date, and the death beneficiary is
your surviving spouse, the revised proposed rules permit the spouse to delay
starting payments over his/her life expectancy until the year in which you would
have attained age 70-1/2.
NON-INDIVIDUAL BENEFICIARY. If you die after your Required Beginning Date, and
your death beneficiary is a non-individual, such as the estate, the revised
proposed rules permit the beneficiary to calculate post-death required minimum
distribution amounts based on the owner's life expectancy in the year of death.
HOWEVER, NOTE THAT WE NEED AN INDIVIDUAL ANNUITANT TO KEEP AN ANNUITY CONTRACT/
CERTIFICATE IN FORCE. IF THE BENEFICIARY IS NOT AN INDIVIDUAL, WE MUST
DISTRIBUTE AMOUNTS REMAINING IN THE ANNUITY CONTRACT AFTER THE DEATH OF THE
ANNUITANT.
If you die before your Required Beginning Date for lifetime required minimum
distribution payments, and the death beneficiary is a non-individual, such as
the estate, the revised proposed rules continue to apply the 5-year rule
discussed above under "Individual beneficiary." PLEASE NOTE THAT WE NEED AN
INDIVIDUAL ANNUITANT TO KEEP AN ANNUITY CONTRACT/CERTIFICATE IN FORCE. IF THE
BENEFICIARY IS NOT AN INDIVIDUAL, WE MUST DISTRIBUTE AMOUNTS REMAINING IN THE
ANNUITY CONTRACT AFTER THE DEATH OF THE ANNUITANT.
IMPORTANT INFORMATION ABOUT MINIMUM DISTRIBUTIONS UNDER YOUR CONTRACT
Although the life contingent annuity portion of the life annuity with a period
certain does not have a cash value, it will be assigned a value for tax
purposes. This value will generally be changed each year. When you determine the
amount of account-based required minimum distributions from your IRA this value
must be included. This must be done before annuity payments begin even though
the life contingent annuity may not be providing a source of funds to satisfy
the required minimum distributions.
If you surrender your contract, or withdraw any remaining account value before
your annuity payments begin, it may be necessary for you to satisfy your
required minimum distribution by moving forward the start date of payments under
your life contingent annuity. Or to the extent available, you have to take
distributions from other IRA funds you may have. Or, you may convert your IRA
life contingent annuity under the IRA contract to a nonqualified life contingent
annuity. This would be viewed as a distribution of the value of the life
contingent annuity from your IRA, and therefore, would be a taxable event.
However, since the life contingent annuity would no longer be part of the IRA,
you would not have to include its value when determining future required minimum
distributions.
If you have elected a joint and survivor form of the life contingent annuity,
the joint annuitant must be your spouse. In the event of your death or the death
of your spouse the value of such annuity will change. For this reason, it is
important that someone tell us if you or your spouse dies before the life
contingent annuity has started payments so that a lower valuation can be made.
Otherwise, a higher tax value may result in an overstatement of the amount that
would be necessary to satisfy your required minimum distribution amount.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow
26 Tax information
against your IRA or use it as collateral, its tax-favored status will be lost as
of the first day of the tax year in which this prohibited event occurs. If this
happens, you must include the value of the traditional IRA in your federal gross
income. Also, the early distribution penalty tax of 10% may apply if you have
not reached age 59-1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59-1/2. Some of
the available exceptions to the pre-age 59-1/2 penalty tax include distributions
made:
o on or after your death;
o because you are disabled (special federal income tax definition);
o used to pay certain extraordinary medical expenses (special federal income
tax definition);
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition);
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs);
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you and
your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
WILL PAYMENTS WE MAKE TO YOU FROM THE LIFE ANNUITY WITH A PERIOD CERTAIN WHILE
YOU ARE UNDER AGE 59-1/2 QUALIFY AS SUBSTANTIALLY EQUAL PAYMENTS FOR LIFE?
Same as nonqualified annuities under "Early distribution penalty tax."
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
We might have to withhold and/or report on amounts we pay under a free look or
cancellation.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here in
detail. However, we may require additional documentation in the case of payments
made to non-United States persons and United States persons living abroad prior
to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our Processing Office at their toll-free number.
If you are receiving periodic and/or non-periodic payments, you will be notified
of the withholding requirements and of your right to make withholding elections.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $15,360 in periodic annuity payments in
2002 your payments will generally be exempt from federal income tax withholding.
You could specify a different choice of withholding exemption or request that
tax be withheld. Your withholding election remains effective unless and until
you revoke it. You may revoke or change your withholding election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS
For a non-periodic distribution (total surrender or partial withdrawal) we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs.
Tax information 27
6. More information
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ABOUT OUR FIXED MATURITY OPTIONS
How we determine the market value adjustment. We use the following procedure to
calculate the market value adjustment (up or down) we make if you withdraw all
of your value from a fixed maturity option before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. See the Appendix at the end of this
Prospectus for an example of how we calculate the market value adjustment.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no longer
offering new fixed maturity options, the "current rate to maturity" will be
determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
ABOUT THE SEPARATE ACCOUNT FOR THE FIXED MATURITY OPTIONS
Investments. Under New York Insurance law, the portion of the separate account
assets equal to the reserves and other contract liabilities relating to the
contracts are not chargeable with liabilities from any other business we may
conduct. We own the assets of the separate account, as well as any favorable
investment performance on those assets. You do not participate in the
performance of the assets held in this separate account. We may, subject to
state law which applies, transfer all assets allocated to the separate account
to our general account. We guarantee all benefits relating to your account value
in the fixed maturity options regardless of whether assets supporting fixed
maturity options are held in a separate account or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities and government and agency issues having durations in
the aggregate consistent with those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options, we are not
obligated to invest those assets according to any particular plan except as we
may be required to by state insurance laws. We will not determine the rates to
maturity we establish by the performance of the nonunitized separate account.
ABOUT OUR GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our general
obligations. Amounts applied under the life contingent annuity become part of
our general account.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not made a review of the
disclosure that is included in the prospectus for your information that relates
to the general account (other than market value adjustment interests) and the
life contingent annuity. The disclosure, however, may be subject to certain
generally applicable provisions of
28 More information
the federal securities laws relating to the accuracy and completeness of
statements made in prospectuses.
OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our Processing Office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" earlier in this Prospectus.
Even if we accept the wire order and essential information, a contract generally
will not be issued until we receive and accept a properly completed application.
In certain cases we may issue a contract based on information forwarded
electronically. Where we require a signed application, no financial transactions
will be permitted until we receive the signed application and have issued the
contract.
After your contract has been issued, additional contributions under the life
annuity with a period certain contract may be transmitted by wire.
ABOUT PAYMENTS UNDER PERIOD CERTAIN CONTRACTS
The following example illustrates a ten-year level stream of annual payments,
each in the amount of $10,000, purchased on February 15, 2002 with the first
payment on February 15, 2003. To achieve this result, a single contribution of
$77,003.05 is required, and is allocated among the fixed maturity options as
indicated below.
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PRICE PER $100
FEBRUARY 15TH OF OF MATURITY ALLOCATION OF
CALENDAR YEAR PAYMENT VALUE CONTRIBUTION
- --------------------------------------------------------------------------------
2003 $10,000 $ 97.09 $ 9,708.74
2004 $10,000 $ 93.97 $ 9,396.74
2005 $10,000 $ 89.20 $ 8,919.88
2006 $10,000 $ 84.43 $ 8,442.66
2007 $10,000 $ 79.32 $ 7,931.99
2008 $10,000 $ 74.31 $ 7,431.37
2009 $10,000 $ 69.50 $ 6,950.43
2010 $10,000 $ 64.94 $ 6,494.34
2011 $10,000 $ 60.60 $ 6,059.73
2012 $10,000 $ 56.67 $ 5,667.17
Total $ 77,003.05
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DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
BUSINESS DAY
Our "business day" is generally any day the New York Stock Exchange is open for
trading. A business day does not include any day we choose not to open due to
emergency conditions. We may also close early due to emergency conditions. Our
business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed; however, we may close or close early due to emergency
conditions. Contributions will be applied and any other transaction requests
will be processed when they are received along with all the required information
unless another date applies as indicated below.
If your contribution or any other transaction request containing all the
required information, reaches us on a non-business day or after 4:00 p.m. on a
business day, we will use the next business day.
CONTRIBUTIONS
o Contributions allocated to the fixed maturity options will receive the rate
to maturity in effect for that fixed maturity option on that business day.
o Contributions allocated to the separate account to provide for payments off
maturity dates will receive the interest rate in effect on that business day
or the same rate as the rate to maturity that applied to the expired fixed
maturity option.
o Contributions allocated to the life contingent annuity will be invested at
the purchase rates in effect on that business day. If you are purchasing the
Income Manager(R) (life with a period certain) option in connection with
your guaranteed minimum income benefit under certain contracts, you should
note that the purchase rates used are more conservative (and therefore your
payments are smaller) than those we use for other Income Manager(R)
contracts.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon our obligations under the contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 2001 and
2000, and for the three years ended December 31, 2001, in this prospectus by
reference to the 2001 Annual Report on Form 10-K are incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
The contracts may not be assigned except through surrender to us. They may not
be borrowed against or used as collateral for a loan or other obligation.
DISTRIBUTION OF CONTRACTS
The contracts are distributed by both AXA Advisors, LLC ("AXA Advisors") and AXA
Distributors, LLC ("AXA Distributors"). AXA Advisors (the successor to EQ
Financial Consultants, Inc.) an affiliate of Equitable Life and AXA
Distributors, an indirect wholly owned subsidiary of Equitable Life, are
registered with the SEC as broker dealers and are members of the National
Association of Securities Dealers, Inc. Their principal business address is 1290
Avenue of the Americas, New York, NY 10104. Both broker dealers also act as
distributors for other Equitable Life annuity products.
AXA Distributors is a successor by merger to all of the functions, rights and
obligations of Equitable Distributors, Inc. ("EDI"). Like AXA Distributors, EDI
was owned by Equitable Holdings, LLC.
More information 29
Under a distribution agreement between AXA Distributors, Equitable Life, and
certain of Equitable Life's separate accounts, including the separate account
that contains the fixed maturity options, Equitable Life paid AXA Distributors
distribution fees of $219,355,297 for 2001, $199,478,753 for 2000 and
$176,337,355 for 1999, as the distributor of certain contracts, including these
contracts, and as the principal underwriter of several Equitable Life separate
accounts, including the separate account that contains the fixed maturity
options. Of these amounts for each of these three years, AXA Distributors
retained $91,443,554, $52,501,772 and $46,957,345, respectively.
Under a distribution and services agreement between AXA Advisors, Equitable Life
and certain of Equitable Life's separate accounts, including the separate
account that contains the fixed maturity options, Equitable Life paid AXA
Advisors a fee of $325,380 for each of the years 2001, 2000 and 1999. Equitable
Life paid AXA Advisors as the distributor for certain contracts, including these
contracts $543,488,990 in 2001 and $666,577,890 in 2000. Of these amounts, AXA
Advisors retained $277,057,837 and $385,314,054, respectively.
The contracts will be sold by registered representatives of AXA Distributors and
AXA Advisors as well as by affiliated and unaffiliated broker-dealers with which
AXA Distributors and/or AXA Advisors has entered into selling agreements.
Broker-dealer sales compensation will generally not exceed 5% of total
contributions made under the contracts. AXA Distributors and AXA Advisors may
also receive compensation and reimbursement for its marketing services under the
terms of their distribution agreements with Equitable Life. Broker-dealers
receiving sales compensation will generally pay a portion of it to their
registered representatives as commissions related to sales of the contracts. The
offering of the contracts is intended to be continuous.
30 More information
7. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31, 2001
is considered to be part of this prospectus because it is incorporated by
reference.
After the date of the prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 as amended, ("Exchange Act") will be
considered to become part of this prospectus because they are incorporated by
reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation, will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a website that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
Incorporation of certain documents by reference 31
Appendix: Market value adjustment example
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The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2003 to a fixed maturity option with a maturity date of February
15, 2012 at a rate to maturity of 7.00% resulting in a maturity value at the
maturity date of $183,846, and further assuming that a withdrawal of $50,000 was
made on February 15, 2007.
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HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2007
----------------------------
5.00% 9.00%
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AS OF FEBRUARY 15, 2007 (BEFORE WITHDRAWAL)
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(1) Market adjusted amount $144,048 $ 119,487
(2) Fixed maturity amount $131,080 $ 131,080
(3) Market value adjustment: (1) - (2) $ 12,968 $ (11,593)
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ON FEBRUARY 15, 2007 (AFTER WITHDRAWAL)
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(4) Portion of market value adjustment
associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
(5) Reduction in fixed maturity amount: [$50,000 - (4)] $ 45,499 $ 54,851
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
(7) Maturity value $120,032 $ 106,915
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
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You should note that if a withdrawal is made when rates have increased from
7.00% to 9.00% (right column), a portion of a negative market value adjustment
is realized. On the other hand, if a withdrawal is made when rates have
decreased from 7.00% to 5.00% (left column), a portion of a positive market
value adjustment is realized.
Appendix: Market value adjustment example A-1
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The by-laws of The Equitable Life Assurance Society of the
United States ("Equitable Life") provide, in Article VII, as follows:
7.4 Indemnification of Directors, Officers and Employees. (a) To
the extent permitted by the law of the State of New York and
subject to all applicable requirements thereof:
(i) any person made or threatened to be made a party to any
action or proceeding, whether civil or criminal, by
reason of the fact that he or she, or his or her
testator or intestate, is or was a director, officer or
employee of the Company shall be indemnified by the
Company;
(ii) any person made or threatened to be made a party to any
action or proceeding, whether civil or criminal, by
reason of the fact that he or she, or his or her
testator or intestate serves or served any other
organization in any capacity at the request of the
Company may be indemnified by the Company; and
(iii) the related expenses of any such person in any of said
categories may be advanced by the Company.
(b) To the extent permitted by the law of the State of New
York, the Company may provide for further indemnification or
advancement of expenses by resolution of shareholders of the
Company or the Board of Directors, by amendment of these
By-Laws, or by agreement. {Business Corporation Law ss.ss.
721-726; Insurance Law ss.1216}
The directors and officers of Equitable Life are insured under policies
issued by Lloyd's of London, X. L. Insurance Company and ACE Insurance Company.
The annual limit on such policies is $150 million, and the policies insure the
officers and directors against certain liabilities arising out of their conduct
in such capacities.
II-1
ITEM 16. EXHIBITS
Exhibits No.
(1) (a) Form of Distribution Agreement by and among
Equitable Distributors, Inc., Separate
Account Nos. 45 and 49 of Equitable Life and
Equitable Life Assurance Society of the
United States, incorporated by reference to
Exhibit 1(a) to the Registration Statement
on Form S-3 (File No. 33-88456), filed June
7, 1996.
(b) Form of Distribution Agreement dated as of
January 1, 1998 among The Equitable Life
Assurance Society of the United States for
itself and as depositor on behalf of certain
separate accounts and Equitable
Distributors, Inc., incorporated herein by
reference to Exhibit 3(b) to the
Registration Statement on Form N-4 (File No.
333-05593) on May 1, 1998.
(c) Distribution and Servicing Agreement among
Equico Securities (now AXA Advisors, LLC),
The Equitable Life Assurance Society of the
United States, and Equitable Variable Life
Insurance Company, dated as of May 1, 1994,
incorporated herein by reference to Exhibit
3(c) to the Registration Statement on
Form N-4 File No. 2-30070, refiled
electronically July 10, 1998.
(d) Letter of Agreement for Distribution
Agreement among The Equitable Life Assurance
Society of the United States and EQ
Financial Consultants, Inc. (now AXA
Advisors, LLC), dated April 20, 1998,
incorporated herein by reference to
Exhibit No. 3(c) to Registration Statement
(File No. 33-83750), filed on May 1, 1998.
(e) Participation Agreement among EQ Advisors
Trust, The Equitable Life Assurance Society
of the United States, Equitable
Distributors, Inc. and EQ Financial
Consultants, Inc. (now AXA Advisors, LLC)
dated as of the 14th day of April 1997,
incorporated by reference to the
Registration Statement of EQ Advisors Trust,
(File No. 333-17217) on Form N-1A, August
28, 1997.
(f) Distribution Agreement for services by The
Equitable Life Assurance Society of the
United States to AXA Network, LLC and its
subsidiaries dated January 1, 2000
incorporated herein by reference to Exhibit
3(d) to Registration Statement File No.
33-83750 filed April 25, 2001.
(g) Distribution Agreement for services by AXA
Network, LLC and its subsidiaries to The
Equitable Life Assurance Society of the
United States dated January 1, 2000
incorporated herein by reference to Exhibit
3(e) to Registration Statement File No.
33-83750 filed April 25, 2001.
(4) (a) Form of group annuity contract no.
1050-94IC, incorporated herein by reference
to Exhibit No. 4(a) to the Registration
Statement on Form S-3 (File No. 333-24009)
filed on March 6, 1998.
(b) Form of group annuity certificate nos. 94ICA
and 94ICB, incorporated herein by reference
to Exhibit No. 4(b) to the Registration
Statement on Form S-3 (File No. 333-24009)
filed on March 6, 1998.
(b)(i) Form of Data pages for Equitable Accumulator
TSA, incorporated by reference to Exhibit
No. 4(s) to the Registration Statement on
Form N-4 (File No. 33-05593) filed on May
22, 1998.
(c) Forms of Endorsement Nos. 94ENIRAI, 94ENNQI
and 94ENMVAI to contract no. 1050-94IC and
data pages no. 94ICA/BIM(IRA), (NQ), (NQ
Plan A) and (NQ Plan B), incorporated herein
by reference to Exhibit No. 4(c) to the
Registration Statement on Form S-3
(File No. 333-24009) filed on March 6, 1998.
(c)(i) Form of Data Pages for Equitable Accumulator
Select TSA, incorporated by reference to
Exhibit 4(k) to the Registration Statement
on Form N-4 (File No. 333-31131) filed on
May 22, 1998.
(d) Forms of Application used with the IRA, NQ
and Fixed Annuity Markets, incorporated
herein by reference to Exhibit No. 4(d) to
the Statement on Form S-3 (File No.
333-24009) filed on March 6, 1998.
(d)(i) Form of Data Pages for Equitable Accumulator
TSA, incorporated by reference to Exhibit
No. 4(v) to the Registration Statement on
Form N-4 (File No. 33-83750) filed on May
22, 1998.
(e) Form of Endorsement no. 95ENLCAI to contract
no. 1050-94IC and data pages no. 94ICA/BLCA,
incorporated herein by reference to Exhibit
No. 4(e) to the Registration Statement on
Form S-3 (File No. 333-24009) filed on
March 6, 1998.
(e)(i) Form of Endorsement Applicable to TSA
Certificates, incorporated by reference to
Exhibit 4(t) to the Registration Statement
on Form N-4 (File No. 333-05593) filed on
May 22, 1998.
(f) Forms of Data Pages for Rollover IRA, IRA
Assured Payment Option, IRA Assured Payment
Option Plus, Accumulator, Assured Growth
Plan, Assured Growth Plan (Flexible Income
Program), Assured Payment Plan (Period
Certain) and Assured Payment Plan (Life with
a Period Certain), incorporated by reference
to Exhibit 4(f) to the Registration
Statement on Form S-3 (File No. 33-88456)
filed August 31, 1995.
(f)(i) Form of Enrollment Form/Application for
Equitable Accumulator (IRA, NQ, QF and TSA),
incorporated by reference to Exhibit No.
5(f) to the Registration Statement on Form
N-4 (File No. 333-05593) filed on May 22,
1998.
II-2
Exhibits No.
(g) Forms of Data Pages for Rollover IRA, IRA
Assured Payment Option, IRA Assured Payment
Option Plus, Accumulator, Assured Growth
Plan and Assured Payment Plan (Life Annuity
with a Period Certain), incorporated by
reference to Exhibit 4(g) to the
Registration Statement on Form S-3 (File No.
33-88456), filed on April 23, 1996.
(h) Form of Separate Account Insulation
Endorsement for the Endorsement Applicable
to Market Value Adjustment Terms,
incorporated by reference to Exhibit 4(h) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed on April 23, 1996.
(i) Forms of Guaranteed Minimum Income Benefit
Endorsements (and applicable data page for
Rollover IRA) for Endorsement Applicable to
Market Value Adjustment Terms and for the
Life Contingent Annuity Endorsement,
incorporated by reference to Exhibit 4(i) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed on April 23, 1996.
(j) Forms of Enrollment Form/Application for
Rollover IRA, Choice Income Plan, Assured
Growth Plan, Accumulator and Assured Payment
Plan, incorporated by reference to Exhibit
4(j) to the Registration Statement on Form
S-3 (File No. 33-88456), filed on April 23,
1996.
(k) Forms of Data Pages for the Accumulator,
incorporated by reference to Exhibit 4(k) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed June 7, 1996.
(l) Forms of Data Pages for the Rollover IRA,
incorporated by reference to Exhibit 4(l) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed June 7, 1996.
(m) Forms of Data Pages for the Accumulator and
Rollover IRA, incorporated by reference to
Exhibit 4(m) to the Registration Statement
on Form S-3 (File No. 33-88456), filed
October 9, 1996.
(n) Forms of Data Pages for Accumulator and
Rollover IRA, incorporated by reference to
Exhibit 4(n) to the Registration Statement
on Form S-3 (File No. 33-88456), filed
October 16, 1996.
(o) Forms of Data Pages for the Accumulator,
Rollover IRA, Income Manager Accumulator,
Income Manager Rollover IRA, Equitable
Accumulator, Income Manager (IRA and NQ) and
MVA Annuity (IRA and NQ), incorporated
herein by reference to Exhibit No. 4(o) to
the Registration Statement on Form S-3
(File No. 333-24009) filed on April 30,
1997.
(p) Forms of Enrollment Form/Application for
Income Manager Accumulator, Income Manager
Rollover IRA, Equitable Accumulator, Income
Manager (IRA and NQ) and MVA Annuity (IRA
and NQ), incorporated herein by reference to
Exhibit No. 4(p) to the Registration
Statement on Form S-3 (File No. 333-24009)
filed on April 30, 1997.
(q) Forms of Data Pages for Equitable
Accumulator Select (IRA) and Equitable
Accumulator Select (NQ), incorporated herein
by reference to Exhibit No. 4(q) to the
Registration Statement on Form S-3 (File
No. 333-24009) filed on September 18, 1997.
(r) Forms of Enrollment Form/Application for
Equitable Accumulator Select (IRA and NQ),
incorporated herein by reference to Exhibit
No. 4(r) to the Registration Statement on
Form S-3 (File No. 333-24009) filed on
September 18, 1997.
(s) Form of Data Pages No. 94ICB and 94ICBMVA
for Equitable Accumulator (IRA)
Certificates, incorporated by reference to
Exhibit 4(m) to the Registration Statement
on Form N-4 (File No. 33-83750) on
February 27, 1998.
(t) Form of Data Pages No. 94ICB and 94ICBMVA
for Equitable Accumulator (NQ) Certificates,
incorporated by reference to Exhibit 4(n) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(u) Form of Data Pages No. 94ICB and 94ICBMVA
for Equitable Accumulator (QP) Certificates,
incorporated by reference to Exhibit 4(o) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(v) Form of Data Pages No. 94ICB, 94ICBMVA and
94ICBLCA for Assured Payment Option
Certificates, incorporated by reference to
Exhibit 4(p) to the Registration Statement
on Form N-4 (File No. 33-83750) on
February 27, 1998.
(w) Form of Data Pages No. 94ICB, 94ICBMVA and
94ICBLCA for APO Plus Certificates,
incorporated by reference to Exhibit 4(q) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(x) Form of Endorsement applicable to Defined
Benefit Qualified Plan Certificates No.
98ENDQPI incorporated by reference to
Exhibit 4(r) to the Registration Statement
on Form N-4 (File No. 33-83750) on
February 27, 1998.
(y) Form of Endorsement applicable to
Non-Qualified Certificates No. 98ENJONQI,
incorporated by reference to Exhibit 4(s) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(z) Form of Endorsement applicable to Charitable
Remainder Trusts No. 97ENCRTI, incorporated
by reference to Exhibit 4(t) to the
Registration Statement on Form N-4 (File No.
33-83750) on February 27, 1998.
(a)(a) Form of Enrollment Form/Application No.
126737 (5/98) for Equitable Accumulator
(IRA, NQ and QP), incorporated by reference
to Exhibit 5(e) to the Registration
Statement on Form N-4 (File No. 33-83750)
on February 27, 1998.
(b)(b) Form of Endorsement for Extra Credit Annuity
Form No. 98ECENDI and Data Pages 94ICA/B,
incorporated herein by reference to Exhibit
No. 4(j) to the Registration Statement
File No. 333-64749 on Form N-4, filed
September 30, 1998.
(c)(c) Form of Endorsement for Extra Credit Annuity
Form No. 98ECENDI and Data Pages 94ICA/B,
incorporated herein by reference to Exhibit
No. 4(k) to the Registration Statement
File No. 333-64751 on Form N-4, filed
September 30, 1998.
(d)(d) Form of Endorsement applicable to Defined
Contribution Qualified Plan Certificates No.
97ENQPI and Data Pages 94ICA/B, incorporated
herein by reference to Exhibit No. 4 (k) to
the Registration Statement File No.
333-64749 on Form N-4, filed September 30,
1998.
(e)(e) Form of Endorsement applicable to Defined
Contribution Qualified Plan Certificates No.
97ENQPI and Data Pages 94ICA/B, incorporated
herein by reference to Exhibit No. 4(l) to
the Registration Statement File No.
333-64751 on Form N-4, filed September 30,
1998.
(f)(f) Form of Data Pages for Equitable Accumulator
Express, incorporated herein by reference to
Exhibit No. 4(h) to Registration Statement
File No. 333-79379 on Form N-4, filed on May
26, 1999.
(g)(g) Form of Enrollment Form/Application for
Equitable Accumulator Express, incorporated
herein by reference to Exhibit No. 5 to
Registration Statement File No. 333-79379 on
Form N-4, filed on May 26, 1999.
(h)(h) Form of Data Pages for new version of
Equitable Accumulator, incorporated herein
by reference to Exhibit 4(z) to Registration
Statement File No. 333-05593 on Form N-4,
filed on November 23, 1999.
(i)(i) Form of Data Pages for new version of
Equitable Accumulator, incorporated herein
by reference to Exhibit 4(c)(c) to
Registration Statement File No. 33-83750 on
Form N-4, filed on December 3, 1999.
(j)(j) Form of Endorsement (Form No. 2000
ENRAI-IM) -- Beneficiary Continuation Option
for use with IRA contracts incorporated
herein by reference to Exhibit No. 4(j)(j)
to the Registration Statement on Form S-3
File No. 333-24009 filed on April 26, 2000.
(k)(k) Form of data pages for Equitable Accumulator
Select baseBUILDER incorporated herein by
reference to Registration Statement File No.
333-73121, filed on April 25, 2000.
(l)(l) Form of Endorsement applicable to Roth IRA
Contracts, Form No. 1M-ROTHBCO-1
incorporated herein by reference to
Registration Statement File No. 33-83750 on
Form N-4, filed April 25, 2001.
(m)(m) Revised Form of Endorsement applicable to
IRA Certificates, Form 2000EN/RAI-IM
incorporated herein by reference to
Registration Statement File No. 33-83750 on
Form N-4, filed April 25, 2001.
(n)(n) Form of Endorsement applicable to
Non-Qualified Certificates Form No. 99ENNQ-G
incorporated herein by reference to
Registration Statement File No. 33-83750 on
Form N-4, filed April 25, 2001.
(o)(o) Form of Optional Death Benefit Rider, Form
No. 2000PPDB incorporated herein by
reference to Registration Statement File No.
33-83750 on Form N-4, filed April 25, 2001.
(p)(p) Form of Data Pages for Equitable Accumulator
incorporated herein by reference to Exhibit
4(i)(i) to Registration Statement File No.
33-83750 on Form N-4, filed April 25, 2001.
(r)(r) Form of Data Pages for Equitable Accumulator
Select incorporated herein by reference to
Exhibit 4(v) to Registration Statement File
No. 333-73121 on Form N-4, filed April 25,
2001.
(s)(s) Form of Data Pages for Equitable Accumulator
Advisor incorporated herein by reference to
Exhibit 4(l) to Registration Statement File
No. 333-44996 on Form N-4, filed
April 25, 2001.
(t)(t) Form of Data Pages for Equitable Accumulator
incorporated herein by reference to Exhibit
4(f)(f) to Registration Statement File No.
333-05593 on Form N-4, filed April 25, 2001.
(u)(u) Form of Data Pages for Equitable Accumulator
Select incorporated herein by reference to
Exhibit 4(w) to Registration Statement File
No. 333-31131 on Form N-4, filed
April 25, 2001.
(w)(w) Form of Data Pages for Equitable Accumulator
Advisor incorporated herein by reference to
Exhibit 4(m) to Registration Statement File
No. 333-96177 on Form N-4, filed
April 25, 2001.
(x)(x) Form of Amendment to Certificate Form No.
941CB, Form No. 2000 BENE-G incorporated
herein by reference to Exhibit 4(j)(j) to
Registration Statement File No. 33-83750 on
Form N-4, filed April 25, 2001.
(y)(y) Form of Endorsement applicable to
Non-Qualified Certificates incorporated
herein by reference to Exhibit 4(k)(k) to
Registration Statement File No. 33-83750 on
Form N-4, filed April 25, 2001.
(z)(z) Form of Enrollment Form/Application for
Equitable Accumulator Select II incorporated
herein by reference to Exhibit 5(a) to
Registration Statement File No. 811-07659
(amendment No. 50) on Form N-4 filed on
May 11, 2001.
(a)(b) Form of Data Pages for Equitable Accumulator
Select II (NQ) incorporated
herein by reference to Exhibit 4(e) to
Registration Statement File No. 811-07659
(amendment No. 50) on Form N-4 filed on
May 11, 2001.
(a)(c) Form of Data Pages for Equitable Accumulator
Select II (NQ) Certificates incorporated
herein by reference to Exhibit 4(k) to
Registration Statement File No. 811-08754
(amendment No. 41) on Form N-4 filed on May
22, 2001.
(a)(d) Form of Enrollment Form/Application for
Equitable Accumulator Select II incorporated
herein by reference to Exhibit 5(a) to
Registration Statement File No. 811-08754
(amendment No. 41) on Form N-4 filed on May
22, 2001.
(a)(e) Form of Data Page for Accumulator Plus, Form
No. 2002DPPPlus incorporated herein by
reference to Exhibit 4(e)(e) to the
Registration Statement (File No. 333-64749),
filed on March 8, 2002.
(a)(f) Form of Data Page for Accumulator Elite,
Form No. 2002DPElite incorporated herein by
reference to Exhibit 4(a)(a) to the
Registration Statement (File No. 333-60730),
filed on March 8, 2002.
(a)(g) Form of Data Page for Accumulator Select,
Form No. 2002DPSelect incorporated herein by
reference to Exhibit 4(i)(i) to the
Registration Statement (File No. 333-31131),
filed on March 8, 2002.
(a)(h) Form of Data Page for Accumulator, Form No.
2002DPCore incorporated herein by reference
to Exhibit 4(q)(q) to the Registration
Statement (File No. 333-05593), filed on
March 8, 2002.
(a)(i) Form of Data Pages, Form No. 2002DP
incorporated herein by reference to Exhibit
4(j)(j) to the Registration Statement (File
No. 333-31131), filed March 8, 2002.
(a)(j) Form of Endorsement applicable to Money
Market Dollar Cost Averaging, Form No.
2002DCA-MM incorporated herein by reference
to Exhibit 4(l)(l) to the Registration
Statement (File No. 333-31131), filed on
March 8, 2002.
(a)(k) Form of Endorsement applicable to
guaranteed interest special dollar cost
averaging Form No. 2002SDCA incorporated
herein by reference to the Registration
Statement (File No. 333-60730), filed on
March 8, 2002.
(a)(j) Form of Endorsement for Accumulator Form
No. 2002EGTRRA incorporated herein by
reference to Exhibit 4(k)(k) to the
Registration Statement (File No. 333-31131),
filed March 8, 2002.
(a)(i) Form of Endorsement applicable to fixed
maturity options, Form No. 2002FMO
incorporated herein by reference to
Exhibit 4(m)(m) to the Registration
Statement (File No. 333-31131), filed
March 8, 2002.
(a)(j) Form of Protection Plus Optional Death
Benefit Rider, Form No. 2002PPDB
incorporated herein by reference to
Exhibit 4(n)(n) to the Registration
Statement (File No. 333-31131), filed
March 8, 2002.
(a)(k) Form of Guaranteed Minimum Death Benefit
Rider, Form No. 2002MDB-6% or AR Rollup
incorporated herein by reference to
Exhibit 4(o)(o) to the Registration
Statement (File No. 333-31131), filed
March 8, 2002.
(a)(l) Form of Guaranteed Minimum Death Benefit
Rider, Form No. 2002GMDB-6% Rollup,
incorporated herein by reference to
Exhibit 4(p)(p) to the Registration
Statement (File No. 333-31131), filed
March 8, 2002.
(a)(m) Form of Guaranteed Minimum Death Benefit
Rider, Form No. 2002GMDB-AR, incorporated
herein by reference to Exhibit 4(q)(q) to
the Registration Statement (File No.
333-31131), filed March 8, 2002.
(a)(n) Form of Guaranteed Minimum Death Benefit
Rider, Form No. 2002GMIB-6% Rollup,
incorporated herein by reference to
Exhibit 4(r)(r) to the Registration
Statement (File No. 333-31131), filed
March 8, 2002.
(a)(o) Form of Guaranteed Minimum Death
Benefit Rider, Form No. 2002GMIB,
incorporated herein by reference to
Exhibit 4(s)(s) to the Registration
Statement (File No. 333-31131), filed
March 8, 2002.
(a)(p) Form of application for Accumulator,
Form No. 2002App01, incorporated herein by
reference to Exhibit 5(h) to the
Registration Statement (File No. 333-31131),
filed March 8, 2002.
(a)(q) Form of application for Accumulator, Form
No. 2002App02, incorporated herein by
reference to Exhibit 5(i) to the
Registration Statement (File No. 333-31131),
filed March 8, 2002.
II-3
Exhibits No.
(5) (a) Opinion and Consent of Robin Wagner, Vice
President and Counsel, as to the legality
of the securities being offered previously
filed with this Registration Statement File
No. 33-89510 on August 17, 2001.
(b) Copy of the Internal Revenue Service
determination letter regarding qualification
under Section 401 of the Internal Revenue
Code, incorporated by reference to Exhibit
5(b) to the Registration Statement on Form
S-3 (File No. 33-88456), filed August 31,
1995.
(8) (a) Not applicable.
(23) (a) Consent of PricewaterhouseCoopers LLP.
(b) Consent of Counsel see Exhibit 5(a).
(c) Powers of Attorney incorporated herein by
reference to Exhibit No. 23(c) to the
Registration Statement (File No. 333-24009)
filed on April 26, 2000.
(d) Power of Attorney for Claus-Michael Dill
incorporated herein by reference to Exhibit
No. 23(d) to the Registration Statement
(File No. 333-24009) filed on April 25,
2001.
(e) Power of Attorney for Christopher M.
Condron incorporated herein by reference to
Exhibit No. 23(e) to the Registration
Statement (File No. 333-24009) filed on
May 22, 2001).
(f) Power of Attorney for Bruce W. Calvert
previously filed with this Registration
Statement File No. 333-67876 on
August 17, 2001.
II-4
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment
to this registration statement:
(i) to include any prospectus required
by section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any
facts or events arising after the
effective date of the registration
statement (or the most recent
post-effective amendment thereof)
which, individually or in the
aggregate represent a fundamental
change in the information set forth
in the registration statement;
(iii) to include any material information
with respect to the plan of
distribution not previously
disclosed in the registration
statement or any material change to
such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933,
each such post-effective amendment shall be
deemed to be a new registration statement
relating to the securities offered therein,
and the offering of such securities at that
time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the
securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-5
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and State of New York, on April 8, 2002.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
UNITED STATES
(Registrant)
By: /s/ Robin Wagner
------------------
Robin Wagner
Vice President
The Equitable Life Assurance Society
of the United States
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by or on behalf of the following persons
in the capacities and on the date indicated.
PRINCIPAL EXECUTIVE OFFICER:
*Christopher M. Condron Chairman of the Board, Chief Executive Officer and Director
PRINCIPAL FINANCIAL OFFICER:
*Stanley B. Tulin Vice Chairman of the Board, Chief Financial Officer and Director
PRINCIPAL ACCOUNTING OFFICER:
*Alvin H. Fenichel Senior Vice President and Controller
DIRECTORS:
*Francoise Colloc'h *Jean-Rene Fourtou *George T. Lowy
*Henri de Castries *Norman C. Francis *Edward D. Miller
*Christopher M. Condron *Donald J. Greene *Didier Pineau-Valencienne
Bruce W. Calvert *John T. Hartley *George J. Sella, Jr.
*Claus-Michael Dill *John H.F. Haskell, Jr. *Peter J. Tobin
*Joseph L. Dionne *Mary R. (Nina) Henderson *Stanley B. Tulin
*Denis Duverne *W. Edwin Jarmain
*By: /s/Robin Wagner
---------------------
Robin Wagner
Attorney-in-Fact
April 8, 2002
II-7
EXHIBIT INDEX
23(a) Consent of PricewaterhouseCoopers LLP EX-99.23a
II-8