Registration No. 333-104713
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
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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EXPLANATORY NOTE
This Post-Effective Amendment No. 1 ("PEA") to the Form S-3 Registration
Statement No. 333-104713 ("Registration Statement") of The Equitable Life
Assurance Society of the United States ("Equitable Life") is being filed for the
purpose of including in the Registration Statement the Prospectuses for the new
versions of Accumulator, Accumulator Plus, Accumulator Select and Accumulator
Elite. The PEA does not otherwise amend or delete any currently effective
Prospectus or supplement to Prospectus, or any other part of the Registration
Statement (which is hereby incorporated by reference from the filing of The
Registration Statement on April 23, 2003 on Form S-3) except as specifically
noted herein.
Equitable Accumulator(R)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED SEPTEMBER 15, 2003
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, prospectuses that contain important
information about the portfolios accompany this Prospectus.
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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 contracts or in all states.
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Variable investment options
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o AXA Aggressive Allocation* o EQ/Alliance Quality Bond
o AXA Conservative Allocation* o EQ/Alliance Small Cap Growth
o AXA Conservative-Plus Allocation* o EQ/Alliance Technology
o AXA Moderate Allocation* o EQ/Bernstein Diversified Value
o AXA Moderate-Plus Allocation* o EQ/Calvert Socially Responsible
o AXA Premier VIP Aggressive Equity o EQ/Capital Guardian International
o AXA Premier VIP Core Bond o EQ/Capital Guardian Research
o AXA Premier VIP Health Care o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP High Yield o EQ/Emerging Markets Equity
o AXA Premier VIP International Equity o EQ/Equity 500 Index
o AXA Premier VIP Large Cap Core o EQ/Evergreen Omega
Equity o EQ/FI Mid Cap
o AXA Premier VIP Large Cap Growth o EQ/FI Small/Mid Cap Value
o AXA Premier VIP Large Cap Value o EQ/J.P. Morgan Core Bond
o AXA Premier VIP Small/Mid Cap o EQ/Janus Large Cap Growth
Growth o EQ/Lazard Small Cap Value
o AXA Premier VIP Small/Mid Cap Value o EQ/Marsico Focus
o AXA Premier VIP Technology o EQ/Mercury Basic Value Equity
o AXA Rosenberg VIT Value Long/Short o EQ/MFS Emerging Growth Companies
Equity o EQ/MFS Investors Trust
o EQ/Alliance Common Stock o EQ/Money Market
o EQ/Alliance Growth and Income o EQ/Putnam Growth & Income Value
o EQ/Alliance Intermediate Government o EQ/Putnam International Equity
Securities o EQ/Putnam Voyager
o EQ/Alliance International o EQ/Small Company Index
o EQ/Alliance Premier Growth o U.S. Real Estate -- Class I
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* The "AXA Allocation" portfolios.
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, AXA Premier VIP Trust, The Universal
Institutional Funds, Inc. or Barr Rosenberg Variable Insurance 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 Traditional and Roth Inherited IRA beneficiary continuation contract
("Inherited 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, Inherited 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 September 15, 2003, 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.
X00567/Core '04 Series
(R-4/15)
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? 6
How to reach us 7
Equitable Accumulator(R) at a glance -- key features 9
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FEE TABLE 12
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Example 14
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1. CONTRACT FEATURES AND BENEFITS 15
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How you can purchase and contribute to your contract 15
Owner and annuitant requirements 21
How you can make your contributions 21
What are your investment options under the contract? 21
Allocating your contributions 27
Your benefit base 30
Annuity purchase factors 30
Our Guaranteed minimum income benefit option 30
Guaranteed minimum death benefit 32
Inherited IRA beneficiary continuation contract 33
Your right to cancel within a certain number of days 34
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2. DETERMINING YOUR CONTRACT'S VALUE 35
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Your account value and cash value 35
Your contract's value in the variable investment options 35
Your contract's value in the guaranteed interest option 35
Your contract's value in the fixed maturity options 35
Your contract's value in the account for special dollar
cost averaging 35
Termination of your contract 35
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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 36
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Transferring your account value 36
Disruptive transfer activity 36
Rebalancing your account value 36
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4. ACCESSING YOUR MONEY 38
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Withdrawing your account value 38
How withdrawals are taken from your account value 39
How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income
benefit, Guaranteed minimum death benefit and
Guaranteed principal benefit option 2 39
Loans under Rollover TSA contracts 40
Surrendering your contract to receive its cash value 40
When to expect payments 40
Your annuity payout options 41
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5. CHARGES AND EXPENSES 43
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Charges that Equitable Life deducts 43
Charges that the Trusts deduct 46
Group or sponsored arrangements 46
Other distribution arrangements 46
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6. PAYMENT OF DEATH BENEFIT 47
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Your beneficiary and payment of benefit 47
How death benefit payment is made 47
Beneficiary continuation option 48
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7. TAX INFORMATION 51
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Overview 51
Buying a contract to fund a retirement arrangement 51
Transfers among investment options 51
Taxation of nonqualified annuities 51
Individual retirement arrangements (IRAs) 53
Special rules for contracts funding qualified plans 55
Tax-Sheltered Annuity contracts (TSAs) 55
Federal and state income tax withholding and
information reporting 56
Impact of taxes to Equitable Life 57
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8. MORE INFORMATION 58
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About Separate Account No. 49 58
About the Trusts 58
About our fixed maturity options 58
About the general account 59
About other methods of payment 59
Dates and prices at which contract events occur 60
About your voting rights 60
About legal proceedings 61
About our independent accountants 61
Financial statements 61
Transfers of ownership, collateral assignments, loans
and borrowing 61
Distribution of the contracts 61
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9. INVESTMENT PERFORMANCE 63
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Communicating performance data 65
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10. INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE 66
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APPENDICES
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I -- Purchase considerations for QP contracts A-1
II -- Market value adjustment example B-1
III -- Enhanced death benefit example C-1
IV -- Hypothetical illustrations D-1
V -- Guaranteed principal benefit example E-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 27
account value 35
administrative charge 43
Annual administrative charge 43
Annual ratchet death benefit 32
annuitant 21
annuity maturity date 42
annuity payout options 40
annuity purchase factors 30
automatic investment program 60
beneficiary 47
Beneficiary continuation option ("BCO") 48
benefit base 30
business day 60
cash value 35
charges for state premium and other applicable taxes 46
contract date 10
contract date anniversary 10
contract year 10
contributions to traditional IRAs 54
regular contributions 54
rollovers and transfers 54
disability, terminal illness or confinement to nursing home 44
disruptive transfer activity 36
Distribution Charge 43
EQAccess 7
ERISA 40
Fixed-dollar option 29
fixed maturity options 26
Flexible Premium IRA cover
Flexible Premium Roth IRA cover
free look 34
free withdrawal amount 44
general account 59
General dollar cost averaging 29
guaranteed interest option 26
Guaranteed minimum death benefit 32
Guaranteed minimum income benefit 30
Guaranteed minimum income benefit charge 45
Guaranteed principal benefit 27
IRA cover
IRS 51
Inherited IRA cover
Investment simplifier 29
investment options cover
lifetime required minimum distribution withdrawals 39
Page
loan reserve account 40
loans under Rollover TSA 40
lump sum withdrawals 38
market adjusted amount 26
market value adjustment 26
market timing 36
maturity dates 26
maturity value 26
Mortality and expense risk charge 43
NQ cover
participant 21
portfolio cover
processing office 7
Protection Plus 32
Protection plus charge 46
QP cover
rate to maturity 26
Rebalancing 36
Rollover IRA cover
Rollover TSA cover
roll-up death benefit 30
Roth Conversion IRA cover
Roth IRA 53
SAI cover
SEC cover
self-directed allocation 27
Separate Account 49 58
Special dollar cost averaging 28
standard death benefit 30
substantially equal withdrawals 38
Successor owner and annuitant 47
Spousal protection 48
systematic withdrawals 38
TOPS 7
TSA cover
traditional IRA 53
Trusts cover
unit 35
variable investment options 21
wire transmittals 59
withdrawal charge 43
4 Index of key words and phrases
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
Guaranteed minimum death Guaranteed death benefit
benefit
Guaranteed minimum income Guaranteed Income Benefit
benefit
guaranteed interest option Guaranteed Interest Account
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Index of key words and phrases 5
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
$415.31 billion in assets as of December 31, 2002. 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.
6 Who is Equitable Life?
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, including notification of eligibility to exercise the guaranteed
minimum income benefit, if applicable.
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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 only for contracts distributed through AXA Distributors);
(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;
Who is Equitable Life? 7
(6) spousal consent for loans under Rollover TSA contracts;
(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;
(5) death claims;
(6) general dollar cost averaging (including the fixed dollar and interest
sweep options); and
(7) special dollar cost averaging.
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 (including the fixed dollar and interest
sweep options);
(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.
8 Who is Equitable Life?
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.
o Special 10 year fixed maturity option (available under Guaranteed principal benefit option 2 only).
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. If you withdraw or transfer only a
portion of a fixed maturity amount, 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 also applies.
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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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Guaranteed minimum The Guaranteed minimum income benefit provides income protection for you during the annuitant's life
income benefit once the owner elects to annuitize the contract.
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Contribution amounts o NQ, Rollover IRA, Roth Conversion IRA, Inherited IRA, QP and Rollover TSA contracts
o Initial minimum: $5,000
o Additional minimum: $500 (NQ, QP and Rollover TSA contracts)
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
$50 (IRA contracts)
$1000 (Inherited IRA 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. In general, contributions are limited to $1.5 million
($500,000 for owners or annuitants who are age 81 and older at contract issue).
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Equitable Accumulator(R) at a glance -- key features 9
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 options
o Guaranteed principal 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
o Spousal protection
o Successor owner/annuitant
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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 1.25%.
o The charges for the Guaranteed minimum death benefits range from 0.0% to 0.50%, 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 0.55% of the applicable benefit base charge for the optional Guaranteed minimum income benefit
until you exercise the benefit, elect another annuity payout or the contract date anniversary after the
annuitant reaches age 85, whichever occurs first.
o An annual charge for the optional Guaranteed principal benefit option 2 deducted on the first 10 contract
date anniversaries equal to 0.50% of the account value.
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
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 eighth 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." For example, if your contract date is May 1, your contract date
anniversary is April 30.
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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.
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10 Equitable Accumulator(R) at a glance -- key features
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 0.10% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses. In addition each AXA Allocation Portfolio will invest in
shares of other Portfolios of the EQ Advisors Trust and AXA Premier VIP Trust (the "Underlying
Portfolios"). Therefore, each AXA Allocation Portfolio will, in addition to its own expenses such as
management fees, bear its pro rata share of the fees and expenses incurred by the Underlying Portfolios and
the investment return of each AXA Allocation Portfolio will be reduced by the Underlying Portfolio's
expenses. The anticipated range of expenses expected to be incurred in connection with each AXA Allocation
Portfolio's investments in Underlying Portfolios is set forth in the AXA Premier VIP Trust prospectus
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Annuitant issue ages NQ: 0-85
Rollover IRA, Roth Conversion IRA, Flexible Premium Roth IRA and Rollover TSA: 20-85
Flexible Premium IRA: 20-70
Inherited IRA: 0-70
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.
Equitable Accumulator(R) at a glance -- key features 11
Fee table
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The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the contract. Each of the charges and expenses
is more fully described in "Charges and expenses" later in this Prospectus.
The first table describes fees and expenses that you will pay at the time that
you surrender the contract or if you make certain withdrawals or apply your
cash to certain payout options or if you purchase a Variable Immediate Annuity
payout option. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Charges for
certain features shown in the fee table are mutually exclusive.
- ------------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge as a percentage of contributions with-
drawn (deducted if you surrender your contract or make certain
withdrawals or apply your cash value to certain payout options).(1) 7.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- ------------------------------------------------------------------------------------------------------------------------------------
The next table describes the fees and expenses that you will pay periodically during the time that you own the contract, not
including the underlying trust portfolio fees and expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your variable investment options expressed as an
annual percentage of daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks 0.75%
Administrative 0.30%
Distribution 0.20%
-----
Total annual expenses 1.25%
- ------------------------------------------------------------------------------------------------------------------------------------
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(2) $ 30
If your account value on a contract date anniversary is $50,000
or more $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
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 for which the benefit is in effect).
Standard death benefit 0.00%
Annual Ratchet to age 85 0.25% of the Annual Ratchet to age 85 benefit base
Greater of 5% Roll up to age 85 or Annual Ratchet to age 85 0.50% of the greater of the 5% Roll up to age 85 benefit
base or the Annual Ratchet to age 85 benefit base, as
applicable
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed principal benefit charge for option 2 (calculated as
a percentage of the account value. Deducted annually on the first 10
contract date anniversaries) 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed minimum income benefit charge (calculated as a
percentage of the applicable benefit base. Deducted annually on each
contract date anniversary for which the benefit is in effect) 0.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Protection Plus benefit charge (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary
for which the benefit is in effect) 0.35%
- ------------------------------------------------------------------------------------------------------------------------------------
12 Fee table
Net loan interest charge - Rollover TSA contracts only (calcu-
lated and deducted daily as a percentage of the outstanding loan
amount) 2.00%(3)
- ------------------------------------------------------------------------------------------------------------------------------------
You also bear your proportionate share of all fees and expenses paid by a
"Portfolio" that corresponds to any variable investment option you are using.
This table shows the lowest and highest total operating expenses charged by any
of the Portfolios that you will pay periodically during the time that you own
the contract. These fees and expenses are reflected in the Portfolio's net
asset value each day. Therefore, they reduce the investment return of the
Portfolio and the related variable investment option. Actual fees and expenses
are likely to fluctuate from year to year. More detail concerning each
Portfolio's fees and expenses is contained in the Trust prospectus for the
Portfolio.
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio operating expenses expressed as an annual percentage of daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002 (expenses that are deducted Lowest Highest
from Portfolio assets including management fees, 12b-1 fees, service fees, and/or ------ -------
other expenses)(4) 0.57% 3.77%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal amount, if applicable:
The withdrawal charge percentage we use is determined by the contract year in Contract
which you make the withdrawal or surrender your contract. For each contribution, Year
we consider the contract year in which we receive that contribution to be "contract 1................. 7.00%
year 1") 2................. 7.00%
3................. 6.00%
4................. 6.00%
5................. 5.00%
6................. 3.00%
7................. 1.00%
8+................ 0.00%
(2) During the first two contract years this charge, if it applies, is equal to
the lesser of $30 or 2% of your account value. Thereafter, the charge is $30
for each contract year.
(3) We charge interest on loans under Rollover TSA contracts but also credit
you interest on your loan reserve account. Our net loan interest charge is
determined by the excess between the interest rate we charge over the
interest rate we credit. See "Loans under Rollover TSA contracts" later in
this Prospectus for more information on how the loan interest is calculated
and for restrictions that may apply.
(4) Equitable Life, the manager of AXA Premier VIP Trust and EQ Advisors Trust,
has entered into Expense Limitation Agreements with respect to certain
Portfolios, which are effective through April 30, 2004. Under these
agreements Equitable Life has agreed to waive or limit its fees and assume
other expenses of certain Portfolios, if necessary, in an amount that
limits each affected Portfolio's total Annual Expenses (exclusive of
interest, taxes, brokerage commissions, capitalized expenditures and
extraordinary expenses) to not more than specified amounts. Morgan Stanley
Investment Management Inc., which does business in certain instances as
"Van Kampen," is the manager of the Universal Institutional Funds, Inc. --
U.S. Real Estate Portfolio -- Class I and has voluntarily agreed to reduce
its management fee and/or reimburse the Portfolio so that total annual
operating expenses of the Portfolio (exclusive of investment related
expenses, such as foreign country tax expense and interest expense on
amounts borrowed) are not more than specified amounts. Van Kampen reserves
the right to terminate any waiver and/or reimbursement at any time without
notice. AXA Rosenberg Investment Management LLC, the manager of the Barr
Rosenberg Variable Insurance Trust -- AXA Rosenberg VIT Value Long/Short
Equity Fund, has voluntarily agreed to reimburse expenses in excess of
specified amounts. See the prospectus for each applicable underlying Trust
for more information about the arrangements. See the Prospectus for each
applicable underlying Trust for more information about the arrangements. In
addition, a portion of the brokerage commissions each EQ Advisors Trust
Portfolio and each AXA Premier VIP Trust Portfolio pays is used to reduce
the Portfolio's expenses. If the table reflected these expense limitation
arrangements and the portion of the brokerage commissions used to reduce
portfolio expenses, the lowest and highest figures would be as shown in the
table below (based on estimated amounts for the current fiscal year, since
initial seed capital was invested for the portfolio representing the
"Lowest" figure on July 31, 2003 and for the portfolio representing the
"Highest" figure on May 2, 2003):
------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002
(expenses that are deducted from Portfolio assets Lowest Highest
including management fees, 12b-1 fees, service fees, ------ -------
and/or other expenses) after expense cap 0.35% 2.00%
------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002
(expenses that are deducted from Portfolio assets
including management fees, 12b-1 fees, service fees,
and/or other expenses) after expense cap and after a 0.35% 2.00%
portion of the brokerage commissions that the Port-
folio pays is used to reduce the Portfolio's expenses.
------------------------------------------------------------------------
Fee table
13
EXAMPLE
This example is intended to help you compare the cost of investing in the
contract with the cost of investing in other variable annuity contracts. These
costs include contract owner transaction expenses, contract fees, separate
account annual expenses, and underlying trust fees and expenses.
The example below shows the expenses that a hypothetical contract owner (who
has elected the Guaranteed minimum income benefit with the enhanced death
benefit that provides for the greater of the 5% Roll up to age 85 or the Annual
Ratchet to age 85 and Protection Plus) would pay in the situations illustrated.
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 $1.80 per $10,000.
The fixed maturity options, guaranteed interest option and the account for
special dollar cost averaging are not covered by the examples. However, the
annual administrative charge, the withdrawal charge, the charge for any
optional benefits and the charge if you elect a Variable Immediate Annuity
payout option 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.
This 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 example is not an
estimate or guarantee of future investment performance.
The example assumes that you invest $10,000 in the contract for the time
periods indicated. The example also assumes that your investment has a 5%
return each year and assumes the highest and lowest fees and expenses of any of
the underlying trust portfolios. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:
If you surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 1,039.95 $ 1,647.66 $ 2,294.15 $ 3,844.25
Highest $ 1,375.89 $ 2,614.39 $ 3,835.37 $ 6,562.70
If you annuitize at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 689.95 $ 1,397.66 $ 2,144.15 $ 4,194.25
Highest $ 1,025.89 $ 2,364.39 $ 3,685.37 $ 6,912.70
If you do not surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 339.95 $ 1,047.66 $ 1,794.15 $ 3,844.25
Highest $ 675.89 $ 2,014.39 $ 3,335.37 $ 6,562.70
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 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.
We may refuse to accept any contribution if the sum of all contributions under
all Equitable Accumulator(R) series contracts with the same owner or annuitant
would then total more than $1,500,000 ($500,000 for owners or annuitants who
are ages 81 and older at contract issue). 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 with the same owner or annuitant would then total more than
$2,500,000.
- --------------------------------------------------------------------------------
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 85 o $5,000 (initial) o After-tax money. o For annuitants up to age 83
at contract issue, additional
o $500 (additional) o Paid to us by check or contributions may be made
transfer of contract value up to age 84.*
in a tax-deferred exchange
under Section 1035 of the o For annuitants age 84 or 85
Internal Revenue Code. at contract issue additional
contributions may be made
up to one year beyond the
annuitant's issue age.*
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 85 o $5,000 (initial) o Eligible rollover distribu- o For annuitants up to age 83
o $50 (additional) tions from TSA contracts or at contract issue, additional
other 403(b) arrangements, contributions may be made
qualified plans, and govern- up to age 84.*
mental EDC plans.
o For annuitants age 84 or 85
o Rollovers from another at contract issue additional
traditional individual retire- contributions may be made
ment arrangement. 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
arrangement. distributions.
o Regular IRA contributions. o Although we accept regular
IRA contributions (limited to
o Additional "catch-up" con- $3,000 for each of calendar
tributions. years 2003 and 2004) under
rollover IRA contracts, we
intend that this contract be
used primarily for rollover
and direct transfer
contributions.
o Additional catch-up contri-
butions of up to $500 can
be made for the calendar
year 2003 or 2004 where
the owner is at least age 50
but under age 70-1/2 at any
time during the calendar
year for which the contribu-
tion is made.
- ------------------------------------------------------------------------------------------------------------------------------------
16 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 85 o $5,000 (initial) o Rollovers from another o For annuitants up to age 83
IRA o $50 (additional) Roth IRA. at contract issue, additional
contributions may be made
o Conversion rollovers up to age 84.*
from a traditional IRA.
o For annuitants age 84 or 85
o Direct transfers from at contract issue additional
another Roth IRA. contributions may be made
up to one year beyond your
o Regular Roth IRA issue age.*
contributions.
o Conversion rollovers after
o Additional catch-up age 70-1/2 must be net of
contributions. required minimum distribu-
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 each of
calendar years 2003 and
2004) under Roth IRA con-
tracts, we intend that this
contract be used primarily
for rollover and direct trans-
fer contributions.
o Additional catch-up contri-
butions of up to $500 can
be made for the calendar
year 2003 or 2004 where
the owner is at least age 50
at any time during the calen-
dar year for which the
contribution is made.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o $5,000 (initial) o For annuitants up to age 83 o Direct transfers of pre-tax
at contract issue, funds from another contract
o $500 (additional) additional contributions or arrangement under Sec-
may be made up to age 84.* tion 403(b) of the Internal
Revenue Code, complying
o For annuitants age 84 or 85 with IRS Revenue Ruling
at contract issue additional 90-24.
contributions may be made
up to one year beyond your o Eligible rollover distribu-
issue age.* tions of pre-tax funds from
other 403(b) plans. Subse-
o Rollover or direct transfer quent contributions may
contributions after age 70- also be rollovers from quali-
1/2must be net of any fied plans, governmental
requiredminimum distri- EDC plans and traditional
butions. IRAs.
o Employer-remitted contribu-
tions are not permitted.
This contract may not be available in your state.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 17
- ------------------------------------------------------------------------------------------------------------------------------------
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 defined contributions are not
o $500 (additional) contribution qualified plan permitted.
trust.
o Only one additional transfer
o The plan must be qualified contribution may be made
under Section 401(a) of the during a contract year.
Internal Revenue Code.
o No additional transfer con-
o For 401(k) plans, trans- tributions after age 76.
ferred contributions may
only include employee pre- o Contributions after age 70-1/2
tax contributions. must be net of any required
minimum distributions.
o A separate QP contract must
be established for each plan
participant.
o Employer-remitted contribu-
tions are not permitted.
See Appendix I at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
Flexible Premium 20 through 70 o $2,000 (initial) o Regular traditional IRA o No regular IRA contributions
IRA contributions. in the calendar year you turn
o $50 (additional) age 70-1/2 and thereafter.*
o Additional catch-up
contributions. o Regular contributions may
not exceed $3,000 for either
o Eligible rollover distribu- 2003 or 2004.
tions from TSA contracts or
other 403(b) arrangements, o Rollover and direct transfer
qualified plans, and govern- contributions after age 70-1/2
mental EDC plans. must be net of required
minimum distributions.
o Rollovers from another
traditional individual o Although we accept rollover
retirement arrangement. and direct transfer contribu-
tions under the Flexible
o Direct custodian-to-custodian Premium IRA contract, we
transfers from another intend that this contract be
traditional individual used for ongoing regular
retirement arrangement. contributions.
o Additional catch-up contri-
butions of up to $500 can
be made for the calendar
year 2003 or 2004 where
the owner is at least age 50
but under age 70-1/2 at any
time during the calendar
year for which the contribu-
tion is made.
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
Flexible Premium 20 through 85 o $2,000 (initial) o Regular after-tax o For annuitants up to age 83
Roth IRA contributions. at contract issue, additional
o $50 (additional) contributions may be made
o Additional catch-up up to age 84.*
contributions.
o For annuitants age 84 and
o Rollovers from another 85 at contract issue addi-
Roth IRA. tional contributions may be
made up to one year beyond
o Conversion rollovers from your issue age.*
a traditional IRA.
o Regular Roth IRA contribu-
o Direct transfers from tions may not exceed
another Roth IRA. $3,000 for either 2003 or
2004.
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 of up to $500 can
be made for the calendar
year 2003 or 2004 where
the owner is at least age 50
at any time during the calen-
dar year for which the
contribution is made.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Minimum
Contract type issue ages contributions Source of contributions Limitations on contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
Inherited IRA 0-70 o $5,000 (initial) o (If contract is traditional o Any additional contributions
Beneficiary IRA) Direct custodian-to- must be from same type of
Continuation o $1,000 (additional) custodian transfers of your IRA of same deceased
Contract (tradi- interest as death owner.
tional IRA or obeneficiaryf the deceased
Roth IRA) owner's traditional l
individua retirement
arrangement.
o (If contract is Roth IRA)
Direct custodian-to-
custodian transfers of your
interest as death beneficiary
of the deceased owner's
Roth IRA.
- ------------------------------------------------------------------------------------------------------------------------------------
+ If you purchase Guaranteed principal benefit option 2, no contributions are
permitted after the six month period beginning on the contract date.
* For Pennsylvania, the following contribution limitations apply:
Maximum
Issue age contribution age
0-75 79
76 80
77 81
78-80 82
81-83 84
84 85
85 86
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. 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.
20 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. In general, we
will not permit a contract to be owned by a minor unless it is pursuant to the
Uniform Gift to Minors Act or the Uniform Transfers to Minors Act in your
state. If the Spousal protection feature is elected, the spouses must be joint
owners, one of the spouses must be the annuitant, and both must be named as the
only primary beneficiaries.
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. See "Inherited IRA beneficiary
continuation contract" later in this section for Inherited IRA owner and
annuitant requirements.
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/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, the fixed maturity options and the account for special dollar
cost averaging.
- --------------------------------------------------------------------------------
Contract features and benefits 21
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.
Equitable Life serves as the investment manager of the Portfolios of the EQ
Advisors Trust and the AXA Premier VIP Trust. 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. The
advisers for these Portfolios, listed in the chart below, are those who make
the investment decisions for each Portfolio. The chart also indicates the
investment manager for each of the other Portfolios.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust
Portfolio Name Objective Advisor(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA AGGRESSIVE ALLOCATION Seeks long-term capital appreciation. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE ALLOCATION Seeks a high level of current income. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE-PLUS Seeks current income and growth of capital, o Equitable Life
ALLOCATION with a greater emphasis on current income.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA MODERATE ALLOCATION Seeks long-term capital appreciation and o Equitable Life
current income.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA MODERATE-PLUS ALLOCA- Seeks long-term capital appreciation and o Equitable Life
TION current income, with a greater emphasis
on capital appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP AGGRESSIVE Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
EQUITY o MFS Investment Management
o Marsico Capital Management, LLC
o Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP CORE BOND Seeks a balance of a high current income o BlackRock Advisors, Inc.
and capital appreciation, consistent with a o Pacific Investment Management Company
prudent level of risk. LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HEALTH CARE Seeks long-term growth of capital. o A I M Capital Management, Inc.
o Dresdner RCM Global Investors LLC
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HIGH YIELD Seeks to achieve a high total return through o Alliance Capital Management L.P.
a combination of current income and capital o Pacific Investment Management Company
appreciation. LLC (PIMCO)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP Seeks long-term growth of capital. o Alliance Capital Management L.P., through
INTERNATIONAL EQUITY its Bernstein Investment Research and
Management Unit
o Bank of Ireland Asset Management
(U.S.) Limited
o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P., through
CORE EQUITY its Bernstein Investment Research and
Management Unit
o Janus Capital Management LLC
o Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
22 Contract features and benefits
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust
Portfolio Name Objective Advisor(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
GROWTH o Dresdner RCM Global Investors LLC
o TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
VALUE o Institutional Capital Corporation
o MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o Alliance Capital Management L.P.
CAP GROWTH o Franklin Advisers, Inc.
o Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o AXA Rosenberg Investment Management LLC
CAP VALUE o TCW Investment Management Company
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TECHNOLOGY Seeks long-term growth of capital. o Alliance Capital Management L.P.
o Dresdner RCM Global Investors LLC
o Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust
Portfolio Name Objective Advisor(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE COMMON STOCK Seeks to achieve long-term growth of o Alliance Capital Management L.P.
capital.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH AND Seeks to provide a high total return. o Alliance Capital Management L.P.
INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERMEDIATE Seeks to achieve high current income o Alliance Capital Management L.P.
GOVERNMENT SECURITIES consistent with relative stability
of principal.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERNATIONAL Seeks to achieve long-term growth of o Alliance Capital Management L.P.
capital.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH To achieve long-term growth of capital o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE QUALITY BOND Seeks to achieve high current income o Alliance Capital Management L.P.
consistent with moderate risk to
capital.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE SMALL CAP Seeks to achieve long-term growth of o Alliance Capital Management L.P.
GROWTH capital.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY Seeks to achieve long-term growth of o Alliance Capital Management L.P.
capital. Current income is incidental
to the Portfolio's objective.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BERNSTEIN DIVERSIFIED Seeks capital appreciation. o Alliance Capital Management L.P.,
VALUE through its Bernstein Investment Research
and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY Seeks long-term capital appreciation. o Calvert Asset Management Company, Inc.
RESPONSIBLE and Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 23
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust
Portfolio Name Objective Advisor(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN U.S. To achieve long-term growth of capital. o Capital Guardian Trust Company
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EMERGING MARKETS EQUITY Seeks long-term capital appreciation. o Morgan Stanley Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX Seeks a total return before expenses that o 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.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN OMEGA Seeks long-term capital growth. o Evergreen Investment Management Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI MID CAP Seeks long-term growth of capital. o Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI SMALL/MID CAP VALUE Seeks long-term capital appreciation. o Fidelity Management & Research Company
- --------------------------------------------------------------------------------
EQ/J.P. MORGAN CORE BOND Seeks to provide a high total return
consistent with moderate risk of capital and ----------------------------------------------------
maintenance of liquidity. o J.P. Morgan Investment Management Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/JANUS LARGE CAP GROWTH Seeks long-term growth of capital. o Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/LAZARD SMALL CAP VALUE Seeks capital appreciation. o Lazard Asset Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MARSICO FOCUS Seeks long-term growth of capital. o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MERCURY BASIC VALUE Seeks capital appreciation and secondarily, o Mercury Advisors
EQUITY income.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS EMERGING GROWTH Seeks to provide long-term capital growth. o MFS Investment Management
COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS INVESTORS TRUST Seeks long-term growth of capital with o MFS Investment Management
secondary objective to seek reasonable
current income.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MONEY MARKET Seeks to obtain a high level of current o Alliance Capital Management L.P.
income, preserve its assets and maintain
liquidity.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME Seeks capital growth. Current income is o Putnam Investment Management, LLC
VALUE a secondary objective.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL Seeks capital appreciation. o Putnam Investment Management, LLC
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM VOYAGER Seeks long-term growth of capital and o Putnam Investment Management, LLC
any increased income that results from
this growth.
- ------------------------------------------------------------------------------------------------------------------------------------
24 Contract features and benefits
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust
Portfolio Name Objective
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/SMALL COMPANY INDEX Seeks to replicate as closely as possible (before the o Alliance Capital Management L.P.
deduction of Portfolio expenses) the total return of the
Russell 2000 Index.
- ------------------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg Variable
Insurance Trust
Portfolio Name Objective
- ------------------------------------------------------------------------------------------------------------------------------------
AXA ROSENBERG VIT VALUE Seeks to increase the value of your investment in bull o AXA Rosenberg Investment
LONG/SHORT EQUITY markets and bear markets through strategies that are Management LLC
designed to have limited exposure to general equity
market risk.
- ------------------------------------------------------------------------------------------------------------------------------------
The Universal Institutional
Funds, Inc.
Portfolio Name Objective
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. REAL ESTATE -- Class I(1) Seeks to provide above average current income and long- o Van Kampen(2
term capital appreciation by investing primarily in equity
securities of companies in the U.S. real estate industry,
including real estate investment trusts.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) 'Class I' Shares are defined in the current underlying Trust prospectus.
(2) Van Kampen is the name under which Morgan Stanley Investment Management
Inc. does business in certain situations.
Other important information about the portfolios is included in the
prospectuses for each Trust that accompany this Prospectus.
Contract features and benefits 25
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 rate for 2003 is equal to the lifetime minimum rate of your
contract. Depending on the state where your contract is issued, your lifetime
minimum rate is either 1.50% or 3.00%. The data page for your contract shows
the lifetime minimum rate. The annual minimum rate will never be less than the
lifetime minimum rate. Check with your financial professional as to which rate
applies in your state. Current interest rates will never be less than the
yearly guaranteed interest rate.
See "Transferring your money among the investment options" later in the
prospectus for restrictions on transfers from the guaranteed interest option.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. We will not accept allocations to a fixed maturity option if on the date
the contribution or transfer is to be applied the rate to maturity is 3%. This
means that at points in time, there may be no fixed maturity options available.
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.
- --------------------------------------------------------------------------------
Under the Special 10 year fixed maturity option (which is available only under
GPB Option 2), additional contributions will have the same maturity date as
your initial contribution (see "The guaranteed principal benefits" below. The
rate to maturity you will receive for each additional contribution is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution.
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.
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 subsequent
contributions to the contract after 60 days, transfers from the variable
investment options or the guaranteed interest option into a fixed maturity
option or transfers, from one fixed maturity option to another.
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. As of February 14,
2003, the next available maturity date was February 14, 2009. If no fixed
maturity options are available, we will transfer your maturity value to the
EQ/Money Market option.
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
26 Contract features and benefits
(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 the lifetime minimum
rate for the guaranteed interest option. 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, the guaranteed principal benefits 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. The total of your allocations must equal 100%. If the annuitant is
age 76-80, you may allocate contributions to fixed maturity options with
maturities of seven years or less. If the annuitant is age 81 or older, you may
allocate contributions to fixed maturity options with maturities of 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.
THE GUARANTEED PRINCIPAL BENEFITS
Subject to state availability, we offer a guaranteed principal benefit ("GPB")
with two options. You may only elect one of the GPBs. Neither GPB is available
under Inherited IRA contracts. We will not offer either GPB when the rate to
maturity for the applicable fixed maturity option is 3%. If you elect either
GPB, you may not elect the Guaranteed minimum income benefit, the systematic
withdrawals option or the substantially equal withdrawals option. Both GPB
options allow you to allocate a portion of your contribution or contributions
to the variable investment options, while ensuring that your account value will
at least equal your contributions adjusted for withdrawals and transfers on a
specified date. GPB Option 2 generally provides you with the ability to
allocate more of your contributions to the variable investment options than
could be allocated using GPB Option 1.
You may elect GPB Option 1 only if the annuitant is age 80 or younger when the
contract is issued (after age 75, only the 7-year fixed maturity option is
available). You may elect GPB Option 2 only if the annuitant is age 75 or
younger when the contract is issued. GPB Option 2 is not available for purchase
with any Flexible Premium IRA contract whether traditional or Roth. If you are
purchasing an IRA, QP or Rollover TSA contract, before you either purchase GPB
Option 2 or elect GPB Option 1 with 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, guaranteed interest option and
permissible funds outside this contract are sufficient to meet your required
minimum distributions. See "Tax information" later in this Prospectus and in
the SAI.
GUARANTEED PRINCIPAL BENEFIT OPTION 1. Under GPB Option 1, you select a fixed
maturity option at the time you sign your application. 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
percentage of your contribution allocated to the fixed maturity option will be
calculated based upon the rate to maturity then in effect for the fixed
maturity option you choose. Your contract will contain information on the
amount of your contribution allocated to the fixed maturity option. If you make
any withdrawals or transfers from the fixed maturity option before the option's
maturity date, the amount in the fixed maturity option will be adjusted and may
no longer grow to equal your initial contribution under GPB Option 1. The
maturity date you select generally may not be later than 10 years, or earlier
than 7 years from your contract date. You may allocate the rest of your initial
contribution to the investment options and guaranteed interest option however
you choose (unless you elect a dollar cost averaging program, in which case the
remainder of your initial contribution must be allocated to the dollar cost
averaging program). Upon the maturity date of the fixed maturity option, you
will be provided with the same notice and the same choices with respect to the
maturity value as described above under "Your choices at the maturity date."
There is no charge for GPB Option 1.
GUARANTEED PRINCIPAL BENEFIT OPTION 2. You may purchase GPB Option 2 at the
time you apply for your contract. IF YOU PURCHASE GPB OPTION 2, YOU MAY NOT
MAKE ADDITIONAL CONTRIBUTIONS TO YOUR CONTRACT AFTER SIX MONTHS FROM THE
CONTRACT ISSUE DATE OR AT ANY EARLIER TIME IF AT SUCH TIME THE THEN APPLICABLE
RATE TO MATURITY ON THE
Contract features and benefits 27
SPECIAL 10 YEAR FIXED MATURITY OPTION IS 3%. Therefore, any discussion in this
Prospectus that involves any additional contributions after the first six
months will be inapplicable.
We specify the portion of your initial contribution, and any additional
permitted contributions, to be allocated to a Special 10 year fixed maturity
option. Your contract will contain information on the percentage of applicable
contributions allocated to the Special 10 year fixed maturity option. You may
allocate the rest of your contributions among the investment options (other
than the Special 10 year fixed maturity option) however you choose, as
permitted under your contract (unless you elect a dollar cost averaging
program, in which case all contributions, other than amounts allocated to the
Special 10 year fixed maturity option, must be allocated to the dollar cost
averaging program). The Special 10 year fixed maturity option will earn
interest at the specified rate to maturity then in effect.
If on the 10th contract date anniversary, your annuity account value is less
than the amount that is guaranteed under GPB Option 2, we will increase your
annuity account value to be equal to the guaranteed amount under GPB Option 2.
Any such additional amounts added to your annuity account value will be
allocated to the EQ/Money Market investment option. After the maturity date of
the Special 10 year fixed maturity option, the guarantee under GPB Option 2
will terminate. Upon the maturity date of the Special 10 year fixed maturity
option, you will be provided with the same notice and the same choices with
respect to the maturity value as described above under "Your choices at the
maturity date." Your GPB Option 2 amount is equal to your initial contribution
adjusted for any additional permitted contributions, transfers out of the
Special 10 year fixed maturity option and withdrawals from the contract (see
"How withdrawals (and transfers out of the Special 10 year fixed maturity
option) affect your Guaranteed minimum income benefit, Guaranteed minimum death
benefit and Guaranteed principal benefit option 2" in "Accessing your money"
later in this Prospectus). Any transfers or withdrawals from the Special 10
year fixed maturity option will also be subject to a market value adjustment
(see "Market value adjustment" under "Fixed maturity options" above in this
section).
GPB Option 2 will terminate if the contract terminates before the maturity date
of the Special 10 year fixed maturity option. If the owner and the annuitant
are different people and the owner dies before the maturity date of the Special
10 year fixed maturity option, we will continue GPB Option 2 only if the
contract can continue through the maturity date of the Special 10 year fixed
maturity option. If the contract cannot so continue, we will terminate GPB
Option 2. GPB Option 2 will continue where there is a successor
owner/annuitant. GPB Option 2 will terminate upon the exercise of the
beneficiary continuation option. See "Payment of death benefit" later in this
Prospectus for more information about the continuation of the contract after
the death of the owner and/or the annuitant.
GPB Option 2 is not an account value or a cash value. There is a fee associated
with GPB Option 2 (see "Charges and expenses" later in this Prospectus). You
should note that the purchase of GPB Option 2 is not appropriate if you want to
make additional contributions to your contract beyond the first six months
after your contract is issued. If you later decide that you would like to make
additional contributions to the Accumulator(R) contract, we may permit you to
purchase another contract. If we do, however, you should note that we do not
reduce or waive any of the charges on the new contract, nor do we guarantee
that the features available under this contract will be available under the new
contract. This means that you might end up paying more with respect to certain
charges than if you had simply purchased a single contract (for example, the
administrative charge).
The purchase of GPB Option 2 is also not appropriate if you plan on terminating
your contract before the maturity date of the Special 10 year fixed maturity
option. In addition, because we prohibit contributions to your contract after
the first six months, certain contract benefits that are dependent upon
contributions or account value will be limited (for example the guaranteed
death benefits and Protection Plus). You should also note that if you intend to
allocate a large percentage of your contributions to the guaranteed interest
option or other fixed maturity options, the purchase of GPB Option 2 may not be
appropriate because of the guarantees already provided by these options. An
example of the effect of GPB Option 1 and GPB Option 2 on your annuity contract
is included in Appendix V later in this Prospectus.
DOLLAR COST AVERAGING
We offer a variety of 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. 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-
28 Contract features and benefits
cation 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 for special dollar
cost averaging 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/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/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/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/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.
INVESTMENT SIMPLIFIER
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. 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.
Interest sweep option. Under this option, you may elect to have monthly
transfers from amounts in the guaranteed interest option into the variable
investment options of your choice. The transfer date will be the last business
day of the month. The amount we will transfer will be the interest credited to
amounts you have in the guaranteed interest option from the last business day
of the prior month to the last business day of the current month. You must have
at least $7,500 in the guaranteed interest option on the date we receive your
election and on the last business day of each month thereafter to participate
in the interest sweep option. We will automatically cancel the interest sweep
program if the amount in the guaranteed interest option is less than $7,500 on
the last day of the month for two months in a row.
----------------------------------
You may not participate in any dollar cost averaging program if you are
participating in the rebalancing program. See "Transferring your money among
investment options" later in this Prospectus. If you elect a GPB and a dollar
cost averaging program, 100% of your contribu-
Contract features and benefits 29
tions not allocated to the fixed maturity option under the GPB must be
allocated to the dollar cost averaging program you elect.
For the fixed-dollar option and the interest sweep option, the first monthly
transfer will occur on the last business day of the month following the month
that we receive your election form at our processing office.
YOUR BENEFIT BASE
A benefit base is used to calculate the Guaranteed minimum income benefit and
the death benefits, as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Guaranteed minimum income 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
5% ROLL UP TO AGE 85 (USED FOR THE GREATER OF 5% ROLL UP TO AGE 85 OR THE
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM
INCOME 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
The effective annual interest rate credited to this benefit base is:
o 5% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/Money Market) and the account
for special dollar cost averaging; and
o 3% with respect to the EQ/Alliance Intermediate Government Securities and
EQ/Money Market, the fixed maturity options, the Special 10 year fixed
maturity option, 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 (USED FOR THE ANNUAL RATCHET TO AGE 85 ENHANCED DEATH
BENEFIT AND THE GREATER OF 5% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE 85
ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM INCOME 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
GREATER OF 5% 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 5% Roll up to age 85 or the
benefit base computed for 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
Guaranteed minimum income benefit option" below 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 GUARANTEED MINIMUM INCOME BENEFIT OPTION
The Guaranteed minimum income 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 Guaranteed minimum income benefit which is described under "Guaranteed
minimum income benefit charge" in "Charges and expenses" later in this
Prospectus. Please ask your financial professional if the Guaranteed minimum
income benefit is available in your state.
If you are purchasing this contract as an Inherited IRA or if you elect a GPB,
the Guaranteed minimum income benefit is not available. If you are purchasing
this contract to fund a Charitable Remainder Trust, the Guaranteed minimum
income benefit is not available, except for certain split-funded Charitable
Remainder Trusts. If the annuitant was older than age 60 at the time an IRA, QP
or Rollover TSA contract was issued, the Guaranteed minimum income 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.
30 Contract features and benefits
The Guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or a 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 life with a
period certain payout option is 10 years. This period may be shorter, depending
on the annuitant's age, as follows:
- --------------------------------------------------------------------------------
Level payments
- --------------------------------------------------------------------------------
Period certain years
--------------------------------------------------------------
Annuitant's
age at exercise IRAs NQ
- --------------------------------------------------------------------------------
75 and younger 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
84 6 6
85 5 5
- --------------------------------------------------------------------------------
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 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 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 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. The benefit base is applied only to the guaranteed annuity
purchase factors under the Guaranteed minimum income benefit in your contract
and not to any other guaranteed or current annuity purchase rates.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. For a
discussion of when your payments will begin and end, see "Exercise of
Guaranteed minimum income benefit" below.
Before you elect the Guaranteed minimum income benefit you should consider the
fact that it provides a form of insurance and is based on conservative
actuarial factors. The guaranteed annuity purchase factors we use to determine
your payout annuity benefit under the Guaranteed minimum income benefit are
more conservative than the guaranteed annuity purchase factors we use for our
standard payout annuity options. 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 Guaranteed
minimum income benefit payout annuity will be smaller than each periodic
payment under our standard payout annuity options. 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.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 5% 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/Money
Market, the guaranteed interest option, the fixed maturity options (including
the Special 10 year fixed maturity option) or the loan reserve account under
Rollover TSA contracts.
- --------------------------------------------------------------------------------
Guaranteed minimum
Contract date income benefit -- annual
anniversary at exercise income payable 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 date anniversary. You must 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 annual payments one year after the annuity payout contract is
issued. You may choose to take a withdrawal prior to exercising the Guaranteed
minimum income benefit, which will reduce your payments. See "Accessing your
money" under "Withdrawing your account value" later in this Prospectus.
Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death or, if later, the end of the period certain
(where the payout option chosen includes a period certain).
EXERCISE RULES. You 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.
Contract features and benefits 31
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 within 30 days following 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) 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; and
(iv) a successor owner/annuitant may only continue the Guaranteed minimum
income benefit if the contract is not past the last date on which the
original annuitant could have exercised the benefit. In addition, the
successor owner/annuitant must be eligible to continue the benefit and to
exercise the benefit under the applicable exercise rule (described in the
above bullets) using the following additional rules. The successor
owner/annuitant's age on the date of the annuitant's death replaces the
annuitant's age at issue for purposes of determining the availability of
the benefit and which of the exercise rules applies. The original contract
issue date will continue to apply for purposes of the exercise rules.
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
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,
adjusted for 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 (without adjustment for any otherwise applicable negative
market value adjustment) 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, adjusted for withdrawals
(and associated withdrawal charges) and taxes that apply, whichever provides
the highest amount. If you elect the Spousal protection option, the Guaranteed
minimum death benefit is based on the age of the older spouse, who may or may
not be the annuitant, for the life of the contract. See "Spousal protection" in
"Payment of death benefit" later in this Prospectus for more information.
OPTIONAL ENHANCED DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 75 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 75 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; 0-70 AT ISSUE FOR INHERITED 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:
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 5% 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. In New York, only the standard
death benefit and the Annual Ratchet to age 85 enhanced death benefit are
available.
The standard death benefit is the only death benefit available for annuitant
ages 76 through 85 at issue of NQ, Rollover IRA, Roth Conversion IRA, Flexible
Premium Roth IRA and Rollover TSA contracts.
----------------------------------
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
See Appendix III 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:
32 Contract features and benefits
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) adjusted for each withdrawal that exceeds your
Protection Plus earnings. "Net contributions" are reduced by the amount of that
excess. Protection Plus earnings are equal to (a) minus (b) where (a) is the
greater of the account value and the death benefit immediately prior to the
withdrawal and (b) is the net contributions as adjusted by any prior
withdrawals; and (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 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 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 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. Reduction on a pro rata basis
means that we calculate the percentage of the current account value that is
being withdrawn and we reduce the benefit 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 benefit is $40,000 before the withdrawal, it
would be reduced by $16,000 ($40,000 X .40) and the benefit after the
withdrawal would be $24,000 ($40,000 - $16,000).
If you elect Spousal protection, the Protection Plus benefit is based on the
age of the older spouse, who may or may not be the annuitant. Upon the death of
the non-annuitant spouse, the account value will be increased by the value of
the Protection Plus benefit as of the date we receive due proof of death. Upon
the death of the annuitant, the value of the Protection Plus benefit is either
added to the death benefit payment or to the account value if Successor
owner/annuitant is elected. If the surviving spouse elects to continue the
contract, the benefit will be based on the age of the surviving spouse as of
the date of the non-surviving spouse's death for the remainder of the contract.
If the surviving spouse is age 76 or older, the benefit will terminate and the
charge will no longer be in effect. See "Spousal protection" in "Payment of
death benefit" later in this Prospectus for more information.
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.
INHERITED IRA BENEFICIARY CONTINUATION CONTRACT
This contract is available to an individual beneficiary of a traditional IRA or
a Roth IRA where the deceased owner held the individual retirement account or
annuity (or Roth individual retirement account or annuity) with an insurance
company or financial institution other than Equitable. The purpose of the
inherited IRA beneficiary continuation contract is to permit the beneficiary to
change the funding vehicle that the deceased owner selected ("original IRA")
while taking the required minimum distribution payments that must be made to
the beneficiary after the deceased owner's death. This contract is intended
only for beneficiaries who want to take payments at least annually over their
life expectancy. These payments generally must begin (or must have begun) no
later than December 31 of the calendar year following the year the deceased
owner died. This contract is not suitable for beneficiaries electing the
"5-year rule." See "Beneficiary continuation option for IRA and Roth IRA
contracts" under "Beneficiary continuation option" in "Payment of death
benefit" later in this Prospectus. You should discuss with your tax advisor
your own personal situation. This contract may not be available in all states.
Please speak with your financial professional for further information.
The inherited IRA beneficiary continuation contract can only be purchased by a
direct transfer of the beneficiary's interest under the deceased owner's
original IRA. The owner of the inherited IRA beneficiary continuation contract
is the individual who is the beneficiary of the original IRA. (Certain trusts
with only individual beneficiaries will be treated as individuals for this
purpose). The contract must also contain the name of the deceased owner. In
this discussion, "you" refers to the owner of the inherited IRA beneficiary
continuation contract.
The inherited IRA beneficiary continuation contract can be purchased whether or
not the deceased owner had begun taking required minimum distribution payments
during his or her life from the original IRA or whether you had already begun
taking required minimum distribution payments of your interest as a beneficiary
from the deceased owner's original IRA. You should discuss with your own tax
advisor when payments must begin or must be made.
Under the inherited IRA beneficiary continuation contract:
o You must receive payments at least annually (but can elect to receive
payments monthly or quarterly). Payments are generally made over your life
expectancy determined in the calendar year after the deceased owner's
death and determined on a term certain basis.
o The beneficiary of the original IRA will be the annuitant under the
inherited IRA beneficiary continuation contract. In the case where the
beneficiary is a "See Through Trust," the oldest beneficiary of the trust
will be the annuitant.
o An inherited IRA beneficiary continuation contract is not available for
annuitants over age 70.
o The initial contribution must be a direct transfer from the deceased
owner's original IRA and is subject to minimum contribution amounts. See
"How you can purchase and contribute to your contract" earlier in this
section.
o Subsequent contributions of at least $1,000 are permitted but
Contract features and benefits 33
must be direct transfers of your interest as a beneficiary from another
IRA with a financial institution other than Equitable, where the deceased
owner is the same as under the original IRA contract.
o You may make transfers among the investment options.
o You may choose at any time to withdraw all or a portion of the account
value. Any partial withdrawal must be at least $300. Withdrawal charges,
will apply as described in "Charges and expenses" later in this
Prospectus.
o The Guaranteed minimum income benefit, successor owner/
annuitant feature, special dollar cost averaging program, automatic
investment program, GPB Option 2 and systematic withdrawals are not
available under the Inherited IRA beneficiary continuation contract.
o If you die, we will pay to a beneficiary that you choose the greater of the
annuity account value or the applicable death benefit.
o Upon your death, your beneficiary has the option to continue taking
required minimum distributions based on your remaining life expectancy or
to receive any remaining interest in the contract in a single sum. The
option elected will be processed when we receive satisfactory proof of
death, any required instructions for the method of payment and any
required information and forms necessary to effect payment. If your
beneficiary elects to continue to take distributions, we will increase the
account value to equal the applicable death benefit if such death benefit
is greater than such account value as of the date we receive satisfactory
proof of death and any required instructions, information and forms.
Thereafter, withdrawal charges will no longer apply. If you had elected
any enhanced death benefits, they will no longer be in effect and charges
for such benefits will stop. The Guaranteed minimum death benefit will
also no longer be in effect.
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, with a signed letter of instruction electing this right, 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 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), (iii) or (iv) 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.
34 Contract features and benefits
2. Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the values you have in: (i) the variable
investment options; (ii) the guaranteed interest option; (iii) market adjusted
amounts in the fixed maturity options; (iv) the account for special dollar cost
averaging; and (v) the loan reserve account (applies for Rollover TSA contracts
only).
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, Guaranteed minimum
income benefit, GPB Option 2 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, which reflects withdrawals out of
the option and charges we deduct. 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.
TERMINATION OF YOUR CONTRACT
Your contract will terminate without value if your account value is
insufficient to pay any applicable charges when due. Your account value could
become insufficient due to withdrawals and/or poor market performance. Upon
such termination, you will lose any applicable guaranteed benefits.
Determining your contract's value 35
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 age 76-80, you must limit your transfers to fixed
maturity options with maturities of seven years or less. If the annuitant
is age 81 or older, you must limit your transfers to fixed maturity
options of five years or less. As of February 14, 2003, maturities of less
than six years were not available. 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 and affect
your GPB.
o No transfers are permitted into the Special 10 year fixed maturity option.
In addition, we reserve the right to restrict transfers among variable
investment options as described in your contract, including limitations on the
number, frequency, or dollar amount of transfers.
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 and interest sweep option dollar cost averaging programs
described under "Allocating your contributions" in "Contract features and
benefits" 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.
From time to time, we may remove the restrictions regarding transferring
amounts out of the guaranteed interest option. If we do so, we will tell you.
We will also tell you at least 45 days in advance of the day that we intend to
reimpose the transfer restrictions. When we reimpose the transfer restrictions,
if any dollar cost averaging transfer out of the guaranteed interest option
causes a violation of the 25% outbound restriction, that dollar cost averaging
program will be terminated for the current contract year. A new dollar cost
averaging program can be started in the next or subsequent contract years.
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).
36 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; your rebalancing allocations will not be changed; and
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 any
dollar cost averaging program. Rebalancing is not available for amounts you
have allocated in the guaranteed interest option or fixed maturity options.
Transferring your money among investment options 37
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. If you 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. In addition, we have the right to pay the cash
value and terminate this contract if no contributions are made during the last
three completed contract years, and the account value is less than $500, or if
you make a withdrawal that would result in a cash value of less than $500. See
"Surrendering your contract to receive its cash value" below. For the tax
consequences of withdrawals, see "Tax information" later in this Prospectus and
in the SAI.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus and "How withdrawals (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum income
benefit, Guaranteed minimum death benefit and Guaranteed principal benefit
option 2," below for more information on how withdrawals affect your guaranteed
benefits and could potentially cause your contract to terminate.
Method of withdrawal
- --------------------------------------------------------------------------------
Lifetime
required
Substantially minimum
Contract Lump sum Systematic equal distribution
- --------------------------------------------------------------------------------
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Flexible
Premium IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Roth Conversion
IRA Yes Yes Yes No
- --------------------------------------------------------------------------------
Flexible Premium
Roth IRA Yes Yes Yes No
- --------------------------------------------------------------------------------
Inherited IRA Yes No 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.
** This contract pays out post-death required minimum distributions. See
"Inherited IRA beneficiary continuation contract" in "Contracts and
benefits" earlier in this Prospectus.
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.
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, Rollover IRA, Roth Conversion IRA, Flexible Premium IRA and
Flexible Premium Roth 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. This option is not available if you have elected a Guaranteed principal
benefit.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA, Roth Conversion IRA, Flexible Premium IRA and Flexible Premium
Roth IRA contracts)
We offer our "substantially equal withdrawals option" to allow you to receive
distributions from your account value without triggering the 10% additional
federal income tax penalty, which normally applies to distributions made before
age 59-1/2. See "Tax information" later in this Prospectus and in the SAI. This
is not the exclusive method of meeting
38 Accessing your money
this exception. After consultation with your tax advisor, you may decide to use
another method which would require you to compute amounts yourself and request
lump sum withdrawals. In such a case, a withdrawal charge may apply. 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.
The IRS has recently issued guidance permitting an individual who had elected
to receive substantially equal withdrawals to change, without penalty, from one
of the IRS-approved methods of calculating fixed payments to another
IRS-approved method (similar to the required minimum distribution rules) of
calculating payments which vary each year.
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 using the IRS-approved method 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 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.
Substantially equal withdrawals that we calculate for you are not subject to a
withdrawal charge. This option is not available if you have elected a
guaranteed principal benefit.
LIFETIME REQUIRED 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 our "automatic required minimum distribution (RMD) service" to help
you meet lifetime required minimum distributions under federal income tax
rules. This is not the exclusive way for you to meet these rules. After
consultation with your tax adviser, you may decide to compute required minimum
distributions yourself and request lump sum withdrawals. In such a case, a
withdrawal charge may apply.
You may elect this service in the year in which you reach age 70-1/2. The
minimum amount we will pay out is $250. Currently, minimum distribution
withdrawal payments will be made annually. See "Required minimum distributions"
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 if you
are enrolled in our automatic RMD service 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.
Under Rollover TSA contracts, you may not elect our automatic RMD service if a
loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, Flexible Premium 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 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 (other than the Special 10 year fixed maturity
option) in the order of the earliest maturity date(s) first. If the FMO amounts
are insufficient, we will deduct all or a portion of the withdrawal from the
account for special dollar cost averaging. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. A market value adjustment will apply to withdrawals from
the fixed maturity options (including the Special 10 year fixed maturity
option).
HOW WITHDRAWALS (AND TRANSFERS OUT OF THE SPECIAL 10 YEAR FIXED MATURITY
OPTION) AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT, GUARANTEED MINIMUM DEATH
BENEFIT AND GUARANTEED PRINCIPAL BENEFIT OPTION 2
In general, withdrawals will reduce your guaranteed benefits 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 the 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
benefit was $40,000 before the withdrawal, it would be reduced by $16,000
($40,000 X .40) and your new benefit after the withdrawal would be $24,000
($40,000 - $16,000).
Transfers out of the Special 10 year fixed maturity option will reduce the GPB
Option 2 amount on a pro rata basis. In addition, if you make a contract
withdrawal from the Special 10 year fixed maturity option, we will reduce your
GPB Option 2 in a similar manner; however, the reduction will reflect both a
transfer out of the Special 10 year fixed maturity option and a withdrawal from
the contract. Therefore, the reduction in GPB Option 2 is greater when you take
a contract withdrawal from the Special 10 year fixed maturity option than it
would be if you took the withdrawal from another investment option.
Similar to the example above, if your account value is $30,000 and you withdraw
$12,000 from the Special 10 year fixed maturity option, you have withdrawn 40%
of your account value. If your GPB Option 2 benefit was $40,000 before the
withdrawal, the reduction to reflect the transfer out of the Special 10 year
fixed maturity option would equal $16,000 ($40,000 x .40). The amount used to
calculate the
Accessing your money 39
reduction to reflect the withdrawal from the contract is $24,000 ($40,000 -
$16,000). The reduction to reflect the withdrawal would equal $9,600 ($24,000 x
..40), and your new benefit after the withdrawal would be $14,400 ($24,000 -
$9,600).
With respect to the Guaranteed minimum income benefit, withdrawals will reduce
the 5% Roll up to age 85 benefit base on a dollar-for-dollar basis, as long as
the sum of withdrawals in a contract year is 5% or less of the 5% Roll up
benefit base on the most recent contract date anniversary. Once a withdrawal is
taken that causes the sum of withdrawals in a contract year to exceed 5% of the
benefit base on the most recent anniversary, that entire withdrawal and any
subsequent withdrawals in that same contract year will reduce the benefit base
pro rata. Reduction on a dollar-for-dollar basis means that your 5% Roll up to
age 85 benefit base will be reduced by the dollar amount of the withdrawal. The
Annual Ratchet to age 85 benefit base will always be reduced on a pro rata
basis.
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 enrolled in our "automatic required minimum distribution (RMD)
service."
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 and the guaranteed interest option. If these amounts are
insufficient, any additional amount of the loan will be subtracted from the
fixed maturity options (other than the Special 10 year fixed maturity option)
in the order of the earliest maturity date(s) first. If FMO amounts are
insufficient, we will deduct all or a portion of the loan from the account for
special dollar cost averaging. If such amounts are still insufficient, we will
deduct any remaining portion from the Special 10 year fixed maturity option. A
market value adjustment will apply to withdrawals from the fixed maturity
options (including the Special 10 year fixed maturity option).
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
40 Accessing your money
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, your choice of payout options are those that are available
under the Guaranteed minimum income benefit (see "Our Guaranteed minimum income
benefit option" in "Contract features and benefits" 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 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 Immediate Annuities may be funded through your choice of available
variable investment options investing in portfolios of EQ Advisors Trust. The
contract also offers a fixed income annuity payout option that can be elected
in combination with the variable income annuity payout option. The amount of
each variable income 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 NQ and IRA Income Manager payout options provide guaranteed level
payments. The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only). You may not elect an Income
Manager payout option without life contingencies 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.
Accessing your money 41
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 advisor. 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 life contingent 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."
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:
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 Pennsylvania and New York, the maturity date is related
to the contract issue date, as follows:
New York Pennsylvania
- --------------------------------------------------------------------------------
Maximum Maximum
annuitization annuitization
Issue age age Issue age age
- --------------------------------------------------------------------------------
0-80 90 0-75 85
81 91 76 86
82 92 77 87
83 93 78-80 88
84 94 81-85 90
85 95
- --------------------------------------------------------------------------------
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.
42 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 Guaranteed minimum
income benefit, if you elect this optional benefit.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
o On the first 10 contract date anniversaries -- a charge for GPB Option 2, 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.
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 0.30% 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 (other than the Special 10 year
fixed maturity option) in the order of the earliest maturity date(s) first. If
such fixed maturity option amounts are insufficient, we will deduct all or a
portion of the charge from the account for special dollar cost averaging. If
such amounts are still insufficient, we will deduct any remaining portion from
the Special 10 year fixed maturity option. If the contract is surrendered or
annuitized or a death benefit is paid, we will deduct a pro rata portion of the
charge for that year. A market value adjustment will apply to deductions from
the fixed maturity options (including the Special 10 year fixed maturity
option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
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
Charges and expenses 43
10% free withdrawal amount, described below, or (2) if you surrender your
contract to receive its cash value or apply your cash value to a non-life
contingent payout option.
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% 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.
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, or in the case of the first contract year, your initial
contribution, minus any other withdrawals made during the contract year. The
10% free withdrawal amount does not apply if you surrender your contract except
where required by law.
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 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
44 Charges and expenses
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 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/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
(other than the Special 10 year fixed maturity option) in the order of the
earliest maturity dates first. If such fixed maturity option amounts are
insufficient, we will deduct all or a portion of the charge from the account
for special dollar cost averaging. If such amounts are still insufficient, we
will deduct any remaining portion from the Special 10 year fixed maturity
option. If the contract is surrendered or annuitized or a death benefit is
paid, we will deduct a pro rata portion of the annual administrative charge for
that year. A market value adjustment will apply to deductions from the fixed
maturity options (including the Special 10 year fixed maturity option).
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 for which it is in effect. The charge is equal to
0.25% of the Annual Ratchet to age 85 benefit base.
Greater of 5% 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 for which it is in effect. The charge is equal
to 0.50% of the greater of the 5% Roll up to age 85 or the Annual Ratchet to
age 85 benefit base for which it is in effect.
We will deduct this charge from your value in the variable investment options
and the guaranteed interest option on a pro rata basis. If these amounts are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options (other than the Special 10 year fixed maturity option) in the
order of the earliest maturity date(s) first. If such fixed maturity option
amounts are insufficient, we will deduct all or a portion of the charge from
the account for special dollar cost averaging. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. If the contract is surrendered or annuitized or a death
benefit is paid, we will deduct a pro rata portion of the charge for that year.
A market value adjustment will apply to deductions from the fixed maturity
options (including the Special 10 year fixed maturity option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
There is no additional charge for the standard death benefit.
GUARANTEED PRINCIPAL BENEFIT OPTION 2
If you purchase GPB Option 2, we deduct a charge annually from your account
value on the first 10 contract date anniversaries. The charge is equal to 0.50%
of the account value. We will deduct this charge from your value in the
variable investment options and the guaranteed interest option on a pro rata
basis. If these amounts are insufficient, we will deduct any remaining portion
of the charge from amounts in any fixed maturity options (other than the
Special 10 year fixed maturity option) in the order of the earliest maturity
date(s) first. If such amounts are insufficient, we will deduct all or a
portion from the account for special dollar cost averaging. If such amounts are
still insufficient, we will deduct any remaining portion from the Special 10
year fixed maturity option. If the contract is surrendered or annuitized or a
death benefit is paid, we will deduct a pro rata portion of the charge for that
year. A market value adjustment will apply to deductions from the fixed
maturity options (including the Special 10 year fixed maturity option).
GUARANTEED MINIMUM INCOME BENEFIT CHARGE
If you elect the Guaranteed minimum income 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 0.55% of the applicable
benefit base in effect on the contract date anniversary.
Charges and expenses 45
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. If such
fixed maturity option amounts are still insufficient, we will deduct all or a
portion of the charge from the account for special dollar cost averaging. If
the contract is surrendered or annuitized or a death benefit is paid, we will
deduct a pro rata portion of the charge for that year. A market value
adjustment will apply to deductions from the fixed maturity options .
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
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 (other than the Special 10 year fixed maturity option) in the
order of the earliest maturity date(s) first. If such fixed maturity option
amounts are insufficient, we will deduct all or a portion of the charge from
the account for special dollar cost averaging. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. If the contract is surrendered or annuitized or a death
benefit is paid, we will deduct a pro rata portion of the charge for that year.
A market value adjustment will apply to deductions from the fixed maturity
options (including the Special 10 year fixed maturity option).
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 jurisdiction and ranges from 0% to 3.5%.
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 0.10% 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 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.
46 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 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
surviving spouse who is the sole primary beneficiary of the deceased
owner/annuitant can choose to be treated as the successor owner/annuitant and
continue the contract. The Successor owner/ annuitant feature is only
available under NQ and individually owned IRA contracts (other than Inherited
IRAs).
For NQ and all types of 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.
An eligible successor owner, including a surviving joint owner after the first
owner dies, may elect the beneficiary continuation option for NQ contracts
discussed in "Beneficiary continuation option" below.
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. The successor owner/annuitant must be 85 or younger as of the
date of the non-surviving spouse's death.
Payment of death benefit 47
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 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.
We will determine whether your applicable Guaranteed minimum death benefit
option will continue as follows:
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was
age 84 or younger at death, the Guaranteed minimum death benefit continues
based upon the option that was elected by the original owner/annuitant and
will continue to grow according to its terms until the contract date
anniversary following the date the successor owner/annuitant reaches age
85.
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was
age 85 or older at death, we will reinstate the Guaranteed minimum death
benefit that was elected by the original owner/annuitant. The benefit will
continue to grow according to its terms until the contract date anniversary
following the date the successor owner/annuitant reaches age 85.
o If the successor owner/annuitant is age 76 or over on the date of the
original owner/annuitant's death, the Guaranteed minimum death benefit
will no longer grow, and we will no longer charge for the benefit.
Where a 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.
For information on the operation of this feature with the Guaranteed minimum
income benefit, see "Exercise of Guaranteed minimum death benefit" under "Our
Guaranteed minimum income benefit option" in "Contract features and benefits,"
earlier in this Prospectus. For information on the operation of this feature
with Protection Plus, see "Protection Plus" in "Guaranteed minimum death
benefit" under "Contract features and benefits," earlier in this Prospectus.
SPOUSAL PROTECTION
SPOUSAL PROTECTION OPTION FOR NQ CONTRACTS ONLY. This feature permits spouses
who are joint contract owners to increase the account value to equal the
guaranteed minimum death benefit, if higher, and by the value of any Protection
Plus benefit, if elected, upon the death of either spouse. This account value
"step up" occurs even if the surviving spouse was the named annuitant. If you
and your spouse jointly own the contract and one of you is the named annuitant,
you may elect the Spousal protection option at the time you purchase your
contract at no additional charge. Both spouses must be between the ages of 20
and 70 at the time the contract is issued and must each be named the primary
beneficiary in the event of the other's death.
The annuitant's age is generally used for the purpose of determining contract
benefits. However, for the Annual Ratchet to age 85 and the Greater of 5% Roll
up to age 85 or Annual Ratchet to age 85 guaranteed minimum death benefits and
the Protection Plus benefit, the benefit is based on the older spouse's age.
The older spouse may or may not be the annuitant.
If the annuitant dies prior to annuitization, the surviving spouse may elect to
receive the death benefit, including the value of the Protection Plus benefit,
or, if eligible, continue the contract as the sole owner/ annuitant by
electing the successor owner/annuitant option. If the non-annuitant spouse dies
prior to annuitization, the surviving spouse continues the contract
automatically as the sole owner/annuitant. In either case, the contract would
continue, as follows:
o As of the date we receive due proof of the spouse's death, the account value
will be re-set to equal the Guaranteed minimum death benefit as of the
date of the non-surviving spouse's death, if higher, increased by the
value of the Protection Plus benefit.
o The Guaranteed minimum death benefit continues to be based on the older
spouse's age for the life of the contract, even if the younger spouse is
originally or becomes the sole owner/annuitant.
o The Protection Plus benefit will now be based on the surviving spouse's age
at the date of the non-surviving spouse's death for the remainder of the
life of the contract. If the benefit had been previously frozen because
the older spouse had attained age 80, it will be reinstated if the
surviving spouse is age 75 or younger. The benefit is then frozen on the
contract date anniversary after the surviving spouse reaches age 80. If
the surviving spouse is age 76 or older, the benefit will be discontinued
even if the surviving spouse is the older spouse (upon whose age the
benefit was originally based).
o If the annuitant dies first, withdrawal charges will no longer apply to any
contributions made prior to the annuitant's death. If the non-annuitant
spouse dies first, the withdrawal charge schedule remains in effect with
regard to all contributions.
We will not allow Spousal protection to be added after contract issue. If there
is a change in owner or primary beneficiary, the Spousal protection benefit
will be terminated. If you divorce but do not change the owner or primary
beneficiary, Spousal protection continues.
BENEFICIARY CONTINUATION OPTION
This feature permits a designated individual, on the contract owner's death, to
maintain a contract in the deceased contract owner's name
48 Payment of death benefit
and receive distributions under the contract, instead of receiving the death
benefit in a single sum. We make this option available to beneficiaries under
traditional IRA, Roth IRA and NQ contracts, subject to state availability.
Please speak with your financial professional for further information.
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA AND ROTH IRA CONTRACTS
ONLY. The beneficiary continuation option must be elected by September 30th of
the year following the calendar year of your death and before any other
inconsistent election is made. Beneficiaries who do not make a timely election
will not be eligible for this option. If the election is made, then, as of the
date we receive satisfactory proof of death, any required instructions,
information and forms necessary to effect the beneficiary continuation option
feature, we will increase the account value to equal the applicable death
benefit if such death benefit is greater than such account value. Where an IRA
contract is owned in a custodial individual retirement account, the custodian
may reinvest the death benefit in an individual retirement annuity contract,
using the account beneficiary as the annuitant. Please speak with your
financial professional for further information.
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. For sole
spousal beneficiaries, payments may begin by December 31st of the calendar year
in which you would have reached age 70-1/2, if such time is later. For
traditional IRA contracts only, if you die before your Required Beginning Date
for Required Minimum Distributions, as discussed in the Statement of Additional
Information, the beneficiary may choose the "5-year rule" option instead of
annual payments over life expectancy. The 5-year rule is always available to
beneficiaries under Roth IRA contracts. If the beneficiary chooses this option,
the beneficiary may take withdrawals as desired, but the entire account value
must be fully withdrawn by December 31st of the calendar year which contains
the fifth anniversary of your death.
Under the beneficiary continuation option for IRA and Roth IRA contracts:
o The contract continues in your name for the benefit of your beneficiary.
o This feature is only available if the beneficiary is an individual. Certain
trusts with only individual beneficiaries will be treated as individuals
for this purpose.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the beneficiary's
own life expectancy, if payments over life expectancy are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the contract, they will no
longer be in effect and charges for such benefits will stop. Also, any
minimum death benefit feature 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, if any, will apply.
o Any partial withdrawal must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking required minimum distributions based
on the remaining life expectancy of the deceased beneficiary or to receive
any remaining interest in the contract in a lump sum. The option elected
will be processed when we receive satisfactory proof of death, any
required instructions for the method of payment and any required
information and forms necessary to effect payment.
BENEFICIARY CONTINUATION OPTION FOR NQ CONTRACTS ONLY. This feature, also known
as Inherited annuity, may only be elected when the NQ contract owner dies
before the annuity commencement date, whether or not the owner and the
annuitant are the same person. If the owner and annuitant are different and the
owner dies before the annuitant, for purposes of this discussion, "beneficiary"
refers to the successor owner. For a discussion of successor owner, see "When
an NQ contract owner dies before the annuitant" earlier in this section. This
feature must be elected within 9 months following the date of your death and
before any other inconsistent election is made. Beneficiaries who do not make a
timely election will not be eligible for this option.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy, determined on a term certain basis and in the
year payments start. These payments must begin no later than one year after the
date of your death and are referred to as "scheduled payments." The beneficiary
may choose the "5-year rule" instead of scheduled payments over life
expectancy. If the beneficiary chooses the 5-year rule, there will be no
scheduled payments. Under the 5-year rule, the beneficiary may take withdrawals
as desired, but the entire account value must be fully withdrawn by the fifth
anniversary of your death.
Under the beneficiary continuation option for NQ contracts (regardless of
whether the owner and annuitant are the same person):
o This feature is only available if the beneficiary is an individual. It is
not available for any entity such as a trust, even if all of the
beneficiaries of the trust are individuals.
o The contract continues in your name for the benefit of your beneficiary.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the respective
beneficiary's own life expectancy, if scheduled payments are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
Payment of death benefit 49
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the contract, they will no
longer be in effect and charges for such benefits will stop. Also, any
minimum death benefit feature will no longer be in effect.
o If the beneficiary chooses the "5-year rule," withdrawals may be made at
any time. If the beneficiary chooses scheduled payments, the beneficiary
must also choose between two potential withdrawal options at the time of
election. "Withdrawal Option 1" permits total surrender only. "Withdrawal
Option 2" permits the beneficiary to take withdrawals, in addition to
scheduled payments, at any time. See "Taxation of nonqualified annuities"
in "Tax information" later in this Prospectus.
o Any partial withdrawals must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract on the beneficiary's death.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking scheduled payments based on the
remaining life expectancy of the deceased beneficiary (if scheduled
payments were chosen) or to receive any remaining interest in the contract
in a lump sum. We will pay any remaining interest in the contract in a
lump sum if your beneficiary elects the 5-year rule. The option elected
will be processed when we receive satisfactory proof of death, any
required instructions for the method of payment and any required
information and forms necessary to effect payment.
If you are both the owner and annuitant:
o As of the date we receive satisfactory proof of death, any required
instructions, information and forms necessary to effect the beneficiary
continuation option feature, we will increase the annuity account value to
equal the applicable death benefit if such death benefit is greater than
such account value.
o No withdrawal charges will apply to any withdrawals by the
beneficiary.
If the owner and annuitant are not the same person:
o If the beneficiary continuation option is elected, the beneficiary
automatically becomes the new annuitant of the contract, replacing the
existing annuitant.
o The annuity account value will not be reset to the death benefit amount.
o The contract's withdrawal charge schedule will continue to be applied to
any withdrawal or surrender other than scheduled payments; the contract's
free corridor amount will continue to apply to withdrawals but does not
apply to surrenders.
o We do not impose a withdrawal charge on scheduled payments except if, when
added to any withdrawals previously taken in the same contract year,
including for this purpose a contract surrender, the total amount of
withdrawals and scheduled payments exceed the free corridor amount. See
the "Withdrawal charges" in "Charges and expenses" earlier in this
Prospectus.
If a contract is jointly owned:
o The surviving owner supersedes any other named beneficiary and may elect
the beneficiary continuation option.
o If the deceased joint owner was also the annuitant, see "If you are both
the owner and annuitant" earlier in this section.
o If the deceased joint owner was not the annuitant, see "If the owner and
annuitant are not the same person" earlier in this section.
50 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) contracts owned by United
States individual taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, traditional IRA, Roth IRA, QP or 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
without notice. 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 or values under the contract, or payments under the contract,
for example, amounts due to beneficiaries, may be subject to federal or state
gift, estate, or inheritance taxes. You should not rely only on this document,
but should consult your tax advisor 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, the 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. Although certain provisions of the Temporary Regulations on
required minimum distributions concerning the actuarial value of additional
contract benefits, which could have increased the amount required to be
distributed from annuity contracts funding qualified plans, TSA's and IRA's
have been suspended for 2003, these or similar provisions may apply in future
years. You may want to discuss with your tax advisor the potential implication
of these Regulations before you purchase this annuity contract or purchase
additional features under this annuity contract. 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).
Tax information 51
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) 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 could 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. The IRS has not specifically addressed the tax treatment
of the Spousal protection benefit. Please consult with your tax advisor before
electing this feature.
BENEFICIARY CONTINUATION OPTION
We have received a Private Letter Ruling from the IRS regarding certain tax
consequences of scheduled payments under the beneficiary continuation option
for NQ contracts. See the discussion "Beneficiary continuation option for NQ
Contracts only" in "Payment of death benefit" earlier in this Prospectus. Among
other things, the IRS rules that:
o scheduled payments under the beneficiary continuation option for NQ contracts
satisfy the death of owner rules of Section 72(s)(2) of the Code,
regardless of whether the beneficiary elects Withdrawal Option 1 or
Withdrawal Option 2;
o scheduled payments, any additional withdrawals under Withdrawal Option 2, or
contract surrenders under Withdrawal Option 1 will only be taxable to the
beneficiary when amounts are actually paid, regardless of the Withdrawal
Option selected by the beneficiary;
o a beneficiary who irrevocably elects scheduled payments with Withdrawal
Option 1 will receive "excludable amount" tax treatment on scheduled
payments. See "Annuity payments" earlier in this section. If the
beneficiary elects to surrender the contract before all scheduled payments
are paid, the amount received upon surrender is a non-annuity payment
taxable to the extent it exceeds any remaining investment in the contract.
The Ruling specifically does not address the taxation of any payments received
by a beneficiary electing Withdrawal Option 2 (whether
52 Tax information
scheduled payments or any withdrawal that might be taken). There is no
assurance that we will receive any further rulings addressing the tax
consequences of payments under Withdrawal Option 2. Before electing the
beneficiary continuation option feature, the individuals you designate as
beneficiary or successor owner should discuss with their tax advisors the
consequences of such elections.
The tax treatment of a withdrawal after the death of the owner taken as a
single sum or taken as withdrawals under the 5-year rule is generally the same
as the tax treatment of a withdrawal from or surrender of 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
for life expectancy), or the joint lives (or joint life expectancy) of you
and a beneficiary, in accordance with IRS formulas.
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 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, 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. We
also offer the Inherited IRA for payment of post-death required minimum
distributions in traditional IRA and Roth IRA. The SAI contains the information
that the IRS requires you to have before you purchase an IRA. The disclosure
generally assumes direct ownership of the individual retirement annuity
contract. For contracts owned in a custodial indi-
Tax information 53
vidual retirement account, the disclosure will apply only if you terminate your
account or transfer ownership of the contract to yourself.
We have not applied for an opinion letter from the IRS to approve the
respective forms of the Equitable Accumulator(R) traditional and Roth IRA
contracts for use as a traditional and Roth IRA, respectively. We have received
IRS opinion letters approving the respective forms of a similar traditional IRA
and Roth IRA endorsement for use as a traditional 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 contracts submitted for IRS approval do not include every
feature possibly available under the Equitable Accumulator(R) traditional and
Roth IRA contracts.
The Inherited IRA beneficiary continuation contract has not been submitted to
the IRS for approval as to form for use as a traditional IRA or Roth IRA.
Equitable intends to submit both traditional and Roth IRA versions of the
contract for formal approval, respectively. However, it is not clear whether
and when such approval may be received.
PROTECTION PLUS(SM) FEATURE
The Protection Plus feature is offered for IRA contracts, subject to state and
contract availability. We have received IRS opinion letters that the contract
with a similar Protection Plus feature qualifies 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 contracts
submitted for IRS approval do not include every feature possibly available
under the Equitable Accumulator(R) traditional and Roth IRA contracts. You
should discuss with your tax advisor 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
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 the taxable year for which the contribution is made is $3,000. The amounts
are the same for both 2003 and 2004. The maximum regular contribution for both
2003 and 2004 is increased to $3,500 if you are at least age 50 at any time
during the taxable year for which the contribution is made.
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 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.
Certain distributions from Roth IRAs may qualify for fully tax-free treatment.
These are 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.
54 Tax information
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 annuity 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 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, the IRS has not
specifically addressed this question. 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 advisor 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 must establish your TSA with
funds that are directly transferred from another 403(b) arrangement or rolled
over from another 403(b) arrangement. You may make subsequent rollover
contributions to your Rollover TSA contract from these sources: qualified
plans, governmental 457(b) plans, and traditional IRAs as well as other TSAs
and 403(b) arrangements . 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 which 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
Tax information 55
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 accept
after-tax funds, we do not track your investment in the contract, if any. We
will report all distributions from this Rollover TSA as fully taxable. 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.
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
56 Tax information
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 $15,840 in periodic annuity payments in
2003, 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 57
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 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
The 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.
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, and other aspects
of its operations, appears in the prospectuses for each Trust, which accompany
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 14, 2003
and the related price per $100 of maturity value were as shown below:
- --------------------------------------------------------------------------------
Fixed maturity
options with
February 14th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 14, 2003 maturity value
- --------------------------------------------------------------------------------
2004 3.00%* $ 97.09
2005 3.00%* $ 94.25
2006 3.00%* $ 91.51
2007 3.00%* $ 88.84
2008 3.00%* $ 86.25
2009 3.11 % $ 83.20
2010 3.49 % $ 78.64
2011 3.76 % $ 74.42
2012 3.96 % $ 70.49
2013 4.19 % $ 66.31
- --------------------------------------------------------------------------------
* Since these rates to maturity are 3%, no amounts could have been allocated to
these 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 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.
58 More information
(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 for your FMO based on the rate
for a new FMO issued on the same date and having the same maturity
date as your FMO; if the same maturity date is not available for
new FMOs, we determine a rate that is between the rates for new FMO
maturities that immediately precede and immediately follow your
FMO's maturity date.
(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 by using a widely published index. 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.
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. We may also treat contributions wired by certain
broker-dealers as received by us on the day we receive all the required
information, subject to receipt of the wired funds on the following business
day.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly
More information 59
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, nor is it available with GPB
Option 2.
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.
o For the fixed-dollar option and the interest sweep option, the first monthly
transfer will occur on the last business day of the month following the
month that we receive your election form at our processing office.
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 share-
60 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.
The Trusts sell their shares to Equitable Life separate accounts in connection
with Equitable Life's annuity and/or variable life insurance products, and to
separate accounts of insurance companies, both affiliated and unaffiliated with
Equitable Life. EQ Advisors Trust and AXA Premier VIP Trust also sell their
shares to the trustee of a qualified plan for Equitable Life. We currently do
not foresee any disadvantages to our policyowners arising out of these
arrangements. However, the Board of Trustees or Directors of each Trust intends
to monitor events 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 Board's response insufficiently protects our policyowners, we
will see to it that appropriate action is taken to do so.
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, 2002
and 2001, and for the three years ended December 31, 2002 incorporated in this
prospectus by reference to the 2002 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 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 distri-
More information 61
bution 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.
62 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 charges, the highest optional enhanced death benefit charge, the
optional charge for Guaranteed principal benefit option 2, 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 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 this table, of $0.18 per $1,000.
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 are being
offered for the first time as of the date of this Prospectus.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology), and the AXA Premier VIP High Yield, AXA Premier VIP
Aggressive Equity and AXA Moderate Allocation portfolios, 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/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.
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 63
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2002:
- --------------------------------------------------------------------------------------------------------------------
Length of option period
- --------------------------------------------------------------------------------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------------------------------------------------------------------------------------------------
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/Aggressive Stock *** (38.13)% (16.14)% (10.85)%
EQ/Alliance Common Stock *** (42.52)% (7.77)% (0.91)%
EQ/Alliance Growth and Income *** -- -- --
EQ/Alliance Intermediate Government Securities *** -- -- --
EQ/Alliance International *** -- -- --
EQ/Alliance Premier Growth (40.43)% -- (22.64)%
EQ/Alliance Quality Bond *** -- -- --
EQ/Alliance Small Cap Growth (39.51)% (7.51)% (2.12)%
EQ/Alliance Technology (49.82)% -- (44.79)%
EQ/Balanced *** (22.25)% (0.61)% (18.28)%
EQ/Bernstein Diversified Value (23.15)% -- (2.16)%
EQ/Calvert Socially Responsible (35.63)% -- (27.22)%
EQ/Capital Guardian International (24.58)% -- (11.86)%
EQ/Capital Guardian Research (33.96)% -- (9.43)%
EQ/Capital Guardian U.S. Equity (33.11)% -- (10.61)%
EQ/Emerging Markets Equity (15.61)% (9.67)% (9.67)%
EQ/Equity 500 Index *** (31.77)% (5.00)% 1.80%
EQ/Evergreen Omega (33.32)% -- (16.88)%
EQ/FI Mid Cap (27.82)% -- (19.52)%
EQ/FI Small/Mid Cap Value (24.15)% (7.35)% (7.20)%
EQ/High Yield *** (12.62)% (8.46)% (3.34)%
EQ/J.P. Morgan Core Bond (0.27)% -- 3.47%
EQ/Janus Large Cap Growth (39.50)% -- (35.82)%
EQ/Lazard Small Cap Value (23.33)% -- (1.33)%
EQ/Marsico Focus (21.11)% -- (7.75)%
EQ/Mercury Basic Value Equity (26.12)% 1.84% 4.73%
EQ/MFS Emerging Growth Companies (43.53)% (7.71)% (2.96)%
EQ/MFS Investors Trust (30.48)% -- (12.95)%
EQ/Money Market *** (8.51)% 0.29% 1.31%
EQ/Putnam Growth and Income Value (28.43)% (6.19)% (2.53)%
EQ/Putnam International Equity (26.10)% (1.76)% 0.24%
EQ/Putnam Voyager (35.67)% (8.03)% (2.88)%
EQ/Small Company Index (30.27)% -- (5.67)%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Length of portfolio period
- --------------------------------------------------------------------------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- --------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond -- -- -- (1.70)%
AXA Premier VIP Health Care -- -- -- (29.30)%
AXA Premier VIP International Equity -- -- -- (30.30)%
AXA Premier VIP Large Cap Core Equity -- -- -- (31.89)%
AXA Premier VIP Large Cap Growth -- -- -- (40.46)%
AXA Premier VIP Large Cap Value -- -- -- (29.20)%
AXA Premier VIP Small/Mid Cap Growth -- -- -- (46.24)%
AXA Premier VIP Small/Mid Cap Value -- -- -- (34.58)%
AXA Premier VIP Technology -- -- -- (51.62)%
EQ/Aggressive Stock *** (29.32)% (16.14)% (1.86)% 6.83%
EQ/Alliance Common Stock *** (26.33)% (7.77)% 5.28% 9.30%
EQ/Alliance Growth and Income *** (10.67)% 0.14% -- 6.37%
EQ/Alliance Intermediate Government Securities *** 3.78% 2.74% 3.14% 3.89%
EQ/Alliance International *** (25.42)% (8.40)% -- (3.46)%
EQ/Alliance Premier Growth (31.55)% -- -- (22.64)%
EQ/Alliance Quality Bond *** 4.36% 2.79% -- 3.12%
EQ/Alliance Small Cap Growth (17.17)% (7.51)% -- (2.12)%
EQ/Alliance Technology -- -- -- (44.79)%
EQ/Balanced *** (10.81)% (0.61)% 3.31% 6.65%
EQ/Bernstein Diversified Value (9.55)% -- -- (2.16)%
EQ/Calvert Socially Responsible (21.01)% -- -- (17.24)%
EQ/Capital Guardian International (24.62)% -- -- (11.86)%
EQ/Capital Guardian Research (13.10)% -- -- (9.43)%
EQ/Capital Guardian U.S. Equity (13.45)% -- -- (10.61)%
EQ/Emerging Markets Equity (25.31)% (9.67)% -- (13.15)%
EQ/Equity 500 Index *** (20.78)% (5.00)% -- 6.20%
EQ/Evergreen Omega (23.78)% -- -- (16.88)%
EQ/FI Mid Cap -- -- -- (19.74)%
EQ/FI Small/Mid Cap Value (7.31)% (7.35)% -- (3.07)%
EQ/High Yield *** (8.99)% (8.46)% 2.60% 3.82%
EQ/J.P. Morgan Core Bond 5.05% -- -- 3.47%
EQ/Janus Large Cap Growth -- -- -- (35.99)%
EQ/Lazard Small Cap Value 1.70% -- -- (1.33)%
EQ/Marsico Focus -- -- -- (7.44)%
EQ/Mercury Basic Value Equity (5.45)% 1.84% -- 4.73%
EQ/MFS Emerging Growth Companies (36.99)% (7.71)% -- (2.96)%
EQ/MFS Investors Trust (18.60)% -- -- (12.95)%
EQ/Money Market *** (1.24)% 0.29% 1.29% 3.43%
EQ/Putnam Growth and Income Value (12.15)% (6.19)% -- (2.53)%
EQ/Putnam International Equity (22.94)% (1.76)% -- 0.24%
EQ/Putnam Voyager (29.58)% (8.03)% -- (2.88)%
EQ/Small Company Index (13.24)% -- -- (5.67)%
- --------------------------------------------------------------------------------------------------------------------
* The variable investment option inception dates are: AXA Premier VIP
Aggressive Equity, AXA Premier VIP High Yield, EQ/Alliance Common Stock,
EQ/Money Market and EQ/Equity 500 Index (October 16, 1996); EQ/Alliance
Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth
Companies, 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/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); AXA Moderate
Allocation (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,
64 Investment performance
EQ/Alliance Growth and Income, EQ/Alliance International and EQ/Alliance
Quality Bond, (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002). AXA Rosenberg VIT Value Long/Short Equity and
U.S. Real Estate -- Class I (July 21, 2003); AXA Aggressive Allocation
Portfolio, AXA Conservative Allocation Portfolio, AXA Conservative-Plus
Allocation Portfolio, AXA Moderate-Plus Allocation Portfolio (July 31,
2003). No performance information is provided for portfolios and/or variable
investment options with inception dates after December 31, 2001.
** The portfolio inception dates are: EQ/Alliance Common Stock (January 13,
1976); EQ/Alliance Money Market (July 13, 1981); AXA Moderate Allocation
and AXA Premier VIP Aggressive Equity (January 27, 1986); AXA Premier VIP
High Yield (January 2, 1987); 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/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/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/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); U.S. Real Estate -- Class I (May 3, 1997); AXA
Rosenberg VIT Value Long/Short Equity (May 2, 2003); AXA Aggressive
Allocation Portfolio, AXA Conservative Allocation Portfolio, AXA
Conservative-Plus Allocation Portfolio, AXA Moderate-Plus Allocation
Portfolio (July 31, 2003). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2001.
*** In each case, the performance shown is for the indicated EQ Advisors Trust
portfolio and any predecessor that it may have had. The inception dates
for these portfolios 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.
Investment performance 65
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/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 AXA Premier VIP 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/Money Market, EQ/Alliance Quality Bond and AXA
Premier VIP 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
Guaranteed minimum income benefit charge, the optional Protection Plus benefit
charge, the optional Guaranteed principal benefit option 2, 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/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/Money Market Option,
EQ/Alliance Quality Bond Option and AXA Premier VIP High Yield Option" in the
SAI.
66 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
2002 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 67
Appendix I: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator(R) QP
contract should discuss with their tax advisors 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;
o although certain provisions of the Temporary Regulations on required minimum
distributions which would have required that the actuarial value of
additional annuity contract benefits be added to the dollar amount credited
for purposes of calculating required minimum distributions have been
suspended for 2003, these or similar provisions may apply in future years,
and could increase the amounts required to be distributed from the contract;
and
o the Guaranteed minimum income 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 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 14, 2004 to a fixed maturity option with a maturity date of
February 14, 2013 (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 14, 2008.
- --------------------------------------------------------------------------------------
Hypothetical assumed
rate to maturity on
February 14, 2008
5.00% 9.00%
- --------------------------------------------------------------------------------------
As of February 14, 2008 (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 14, 2008 (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 adjustment 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
(This page intentionally left blank)
Appendix III: 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/Money Market, the
guaranteed interest option, the fixed maturity options or the Special 10 year
fixed maturity option), 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 5% Roll up to age 85 Annual Ratchet to age 85
year Account value enhanced death benefit enhanced death benefit
- --------------------------------------------------------------------------------------
1 $105,000 $105,000 $105,000
- --------------------------------------------------------------------------------------
2 $115,500 $110,250 $115,500
- --------------------------------------------------------------------------------------
3 $129,360 $115,763 $129,360
- --------------------------------------------------------------------------------------
4 $103,488 $121,551 $129,360
- --------------------------------------------------------------------------------------
5 $113,837 $127,628 $129,360
- --------------------------------------------------------------------------------------
6 $127,497 $134,010 $129,360
- --------------------------------------------------------------------------------------
7 $127,497 $140,710 $129,360
- --------------------------------------------------------------------------------------
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 85
(1) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(2) 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 5% 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 5% Roll up to age 85 or the Annual
Ratchet to age 85.*
* At the end of contract years 4 through 7, the death benefit will be the
enhanced death benefit. At the end of contract years 1, 2 and 3, the death
benefit will be the current account value.
Appendix III: Enhanced death benefit example C-1
(This page intentionally left blank)
Appendix IV: Hypothetical illustrations
- --------------------------------------------------------------------------------
ILLUSTRATION OF ACCOUNT VALUES, CASH VALUES AND CERTAIN GUARANTEED MINIMUM
BENEFITS
The following tables illustrate the changes in account value, cash value and
the values of the "greater of 5% Roll up to age 85 or the Annual Ratchet to age
85" guaranteed minimum death benefit, the Protection Plus benefit and the
Guaranteed minimum income benefit under certain hypothetical circumstances for
an Accumulator(R) contract. The table illustrates the operation of a contract
based on a male, issue age 60, who makes a single $100,000 contribution and
takes no withdrawals. The amounts shown are for the beginning of each contract
year and assume that all of the account value is invested in portfolios that
achieve investment returns at constant gross annual rates of 0% and 6% (i.e.,
before any investment management fees, 12b-1 fees or other expenses are
deducted from the underlying portfolio assets). After the deduction of the
arithmetic average of the investment management fees, 12b-1 fees and other
expenses of all of the underlying Portfolios (as described below), the
corresponding net annual rates of return would be (2.63)% and 3.37% for the
Accumulator(R) contract, at the 0% and 6% gross annual rates, respectively.
These net annual rates of return reflect the trust and separate account level
charges, but they do not reflect the charges we deduct from your account value
annually for the optional Guaranteed minimum death benefit, Protection Plus
benefit, and the Guaranteed minimum income benefit features, as well as the
annual administrative charge. If the net annual rates of return did reflect
these charges, the net annual rates of return shown would be lower; however,
the values shown in the following tables reflect all contract charges. The
values shown under "Lifetime annual guaranteed minimum income benefit" reflect
the lifetime income that would be guaranteed if the Guaranteed minimum income
benefit is selected at that contract anniversary. An "N/A" in these columns
indicates that the benefit is not exercisable in that year. A "0" under any of
the death benefit and/or "Lifetime annual guaranteed minimum income benefit"
columns indicates that the contract has terminated due to insufficient account
value and, consequently, the guaranteed benefit has no value.
With respect to fees and expenses deducted from assets of the underlying
portfolios, the amounts shown in all tables reflect (1) investment management
fees equivalent to an effective annual rate of .74%, and (2) an assumed average
asset charge for all other expenses of the underlying portfolios equivalent to
an effective annual rate of .39% and (3) 12b-1 fees equivalent to an effective
annual rate of 0.25%. These rates are the arithmetic average for all portfolios
that are available as investment options. In other words, they are based on the
hypothetical assumption that account values are allocated equally among the
variable investment options. The actual rates associated with any contract will
vary depending upon the actual allocation of policy values among the investment
options. These rates do not reflect expense limitation arrangements in effect
with respect to certain of the underlying portfolios as described in the
footnotes to the fee table for the underlying portfolios in "Fee Table" earlier
in this prospectus. With these arrangements, the charges shown above would be
lower. This would result in higher values than those shown in the following
tables.
Because your circumstances will no doubt differ from those in the illustrations
that follow, values under your contract will differ, in most cases
substantially. Upon request, we will furnish you with a personalized
illustration.
Appendix IV: Hypothetical illustrations D-1
Variable deferred annuity
Accumulator(R)
$100,000 Single contribution and no withdrawals
Male, issue age 60
Benefits:
Greater of 5% Roll up to age 85 and the Annual Ratchet to age 85 Guaranteed
minimum death benefit
Protection Plus
Guaranteed minimum income benefit
Greater of 5% Roll up
to age 85 and the Annual
Ratchet to age 85 Guaranteed
Account value Cash value minimum death benefit
---------------- --------------- -----------------------------
Age Contract year 0% 6% 0% 6% 0% 6%
- ----- -------------- --------- --------- -------- --------- --------- ---------
60 1 100,000 100,000 93,000 93,000 100,000 100,000
61 2 95,957 101,936 88,957 94,936 105,000 105,000
62 3 91,977 103,875 85,977 97,875 110,250 110,250
63 4 88,057 105,815 82,057 99,815 115,763 115,763
64 5 84,191 107,754 79,191 102,754 121,551 121,551
65 6 80,375 109,687 77,375 106,687 127,628 127,628
66 7 76,604 111,613 75,604 110,613 134,010 134,010
67 8 72,873 113,526 72,873 113,526 140,710 140,710
68 9 69,179 115,424 69,179 115,424 147,746 147,746
69 10 65,516 117,302 65,516 117,302 155,133 155,133
74 15 47,465 126,223 47,465 126,223 197,993 197,993
79 20 29,337 133,818 29,337 133,818 252,695 252,695
84 25 10,571 139,108 10,571 139,108 322,510 322,510
89 30 0 150,467 0 150,467 338,635 338,635
94 35 0 165,759 0 165,759 338,635 338,635
95 36 0 169,102 0 169,102 338,635 338,635
Lifetime annual
guaranteed minimum income benefit
----------------------------------
Total death benefit
with Protection Guaranteed Hypothetical
Plus income income
------------------- ----------------- ----------------
Age 0% 6% 0% 6% 0% 6%
- ----- --------- --------- -------- -------- -------- -------
60 100,000 100,000 N/A N/A N/A N/A
61 107,000 107,000 N/A N/A N/A N/A
62 114,350 114,350 N/A N/A N/A N/A
63 122,068 122,068 N/A N/A N/A N/A
64 130,171 130,171 N/A N/A N/A N/A
65 138,679 138,679 N/A N/A N/A N/A
66 147,613 147,613 N/A N/A N/A N/A
67 156,994 156,994 N/A N/A N/A N/A
68 166,844 166,844 N/A N/A N/A N/A
69 177,186 177,186 N/A N/A N/A N/A
74 237,190 237,190 12,493 12,493 12,493 12,493
79 313,773 313,773 17,032 17,032 17,032 17,032
84 388,642 388,642 27,736 27,736 27,736 27,736
89 0 404,767 N/A N/A N/A N/A
94 0 404,767 N/A N/A N/A N/A
95 0 404,767 N/A N/A N/A N/A
The hypothetical investment results are illustrative only and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown and will depend on a number of
factors, including investment allocations made by the owner. The account value,
cash value and guaranteed benefits for a contract would be different from the
ones shown if the actual gross rate of investment return averaged 0% or 6% over
a period of years, but also fluctuated above or below the average for
individual contract years. We can make no representation that these
hypothetical investment results can be achieved for any one year or continued
over any period of time. In fact, for any given period of time, the investment
results could be negative.
D-2 Appendix IV: Hypothetical illustrations
Appendix V: Guaranteed principal benefit example
- --------------------------------------------------------------------------------
For purposes of these examples, we assume that there is an initial contribution
of $100,000, made to the contract on February 14, 2003. We also assume that no
additional contributions, no transfers among options and no withdrawals from
the contract are made. For GPB Option 1, the example also assumes that a 10
year fixed maturity option is chosen. The hypothetical gross rates of return
with respect to amounts allocated to the variable investment options are 0%, 6%
and 10%. The numbers below reflect the deduction of all applicable separate
account and contract charges and also reflect the charge for GPB Option 2.
Also, for any given performance of your variable investment options, GPB Option
1 produces higher account values than GPB Option 2 unless investment
performance has been significantly positive. The examples should not be
considered a representation of past or future expenses. Similarly, the annual
rates of return assumed in the example are not an estimate or guarantee of
future investment performance.
Assuming 100%
in the variable
Assuming Under GPB Under GPB investment
100% in the FMO Option 1 Option 2 options
- ----------------------------------------------------------------------------------------------------------------------
Amount allocated to FMO on February 14, 100,000 66,310 35,000 0
2003 based upon a 4.19% rate to maturity
- ----------------------------------------------------------------------------------------------------------------------
Initial account value allocated to the variable 0 33,690 65,000 100,000
investment options on February 14, 2003
- ----------------------------------------------------------------------------------------------------------------------
Account value in the fixed maturity option on 150,802 100,000 52,781 0
February 14, 2013
- ----------------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 125,888 100,000* 76,840
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a 0%
gross annual rate of return)
- ----------------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 147,066 136,654** 139,703
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a 6%
gross annual rate of return)
- ----------------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 168,793 176,054** 204,194
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a
10% gross annual rate of return)
- ----------------------------------------------------------------------------------------------------------------------
* Since the annuity account value is less than the alternate benefit under GPB
Option 2, the annuity account value is adjusted upward to the guaranteed
amount or an increase of $1,661 in this example.
** Since the annuity account value is greater than the alternate benefit under
GPB Option 2, GPB Option 2 will not affect the annuity account value.
Appendix V: Guaranteed principal benefit example E-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 15
Custodian and Independent Accountants 15
Yield Information for the EQ/Money Market Option, EQ/Alliance Quality Bond
Option and AXA Premier VIP High Yield Option 16
Distribution of the Contracts 17
Financial Statements 17
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 September 15, 2003.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
(SAI 13AMLF(5/03))
X00567/Core '04 Series
Equitable Accumulator(R) Select(SM)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED SEPTEMBER 15, 2003
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, prospectuses that contain important
information about the Portfolios accompany this prospectus.
- --------------------------------------------------------------------------------
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, the guaranteed interest option or fixed maturity
options ("investment options"). There is no withdrawal charge under 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 contracts
or in all states.
- --------------------------------------------------------------------------------
Variable investment options
- --------------------------------------------------------------------------------
o AXA Aggressive Allocation* o EQ/Alliance Quality Bond
o AXA Conservative Allocation* o EQ/Alliance Small Cap Growth
o AXA Conservative-Plus Allocation* o EQ/Alliance Technology
o AXA Moderate Allocation* o EQ/Bernstein Diversified Value
o AXA Moderate-Plus Allocation* o EQ/Calvert Socially Responsible
o AXA Premier VIP Aggressive Equity o EQ/Capital Guardian International
o AXA Premier VIP Core Bond o EQ/Capital Guardian Research
o AXA Premier VIP Health Care o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP High Yield o EQ/Emerging Markets Equity
o AXA Premier VIP International Equity o EQ/Equity 500 Index
o AXA Premier VIP Large Cap Core o EQ/Evergreen Omega
Equity o EQ/FI Mid Cap
o AXA Premier VIP Large Cap Growth o EQ/FI Small/Mid Cap Value
o AXA Premier VIP Large Cap Value o EQ/J.P. Morgan Core Bond
o AXA Premier VIP Small/Mid Cap o EQ/Janus Large Cap Growth
Growth o EQ/Lazard Small Cap Value
o AXA Premier VIP Small/Mid Cap Value o EQ/Marsico Focus
o AXA Premier VIP Technology o EQ/Mercury Basic Value Equity
o AXA Rosenberg VIT Value Long/Short o EQ/MFS Emerging Growth Companies
Equity o EQ/MFS Investors Trust
o EQ/Alliance Common Stock o EQ/Money Market
o EQ/Alliance Growth and Income o EQ/Putnam Growth & Income Value
o EQ/Alliance Intermediate o EQ/Putnam International Equity
Government Securities o EQ/Putnam Voyager
o EQ/Alliance International o EQ/Small Company Index
o EQ/Alliance Premier Growth o U.S. Real Estate -- Class I
- --------------------------------------------------------------------------------
* The "AXA Allocation" portfolios.
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, AXA Premier VIP Trust, The Universal
Institutional Funds, Inc. or Barr Rosenberg Variable Insurance 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 Traditional and Roth Inherited IRA beneficiary continuation contract
("Inherited 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 September 15, 2003, 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.
X00565/Select '04 Series
(R-4/15)
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 11
- --------------------------------------------------------------------------------
Example 13
Condensed financial information 13
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 14
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 14
Owner and annuitant requirements 16
How you can make your contributions 16
What are your investment options under the contract? 16
Allocating your contributions 22
Your benefit base 24
Annuity purchase factors 25
Our Guaranteed minimum income benefit option 25
Guaranteed minimum death benefit 27
Inherited IRA beneficiary continuation contract 28
Your right to cancel within a certain number of days 29
- --------------------------------------------------------------------------------
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 guaranteed interest option 30
Your contract's value in the fixed maturity options 30
Termination of your contract 30
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 31
- --------------------------------------------------------------------------------
Transferring your account value 31
Disruptive transfer activity 31
Rebalancing your account value 32
- ----------------------
"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 33
- --------------------------------------------------------------------------------
Withdrawing your account value 33
How withdrawals are taken from your account value 34
How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and
Guaranteed principal benefit option 2 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
- --------------------------------------------------------------------------------
5. CHARGES AND EXPENSES 38
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 38
Charges that the Trusts deduct 39
Group or sponsored arrangements 39
Other distribution arrangements 40
- --------------------------------------------------------------------------------
6. PAYMENT OF DEATH BENEFIT 41
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 41
How death benefit payment is made 41
Beneficiary continuation option 42
- --------------------------------------------------------------------------------
7. TAX INFORMATION 45
- --------------------------------------------------------------------------------
Overview 45
Buying a contract to fund a retirement arrangement 45
Transfers among investment options 45
Taxation of nonqualified annuities 45
Individual retirement arrangements (IRAs) 47
Tax-Sheltered Annuity contracts (TSAs) 49
Federal and state income tax withholding and
information reporting 50
Impact of taxes to Equitable Life 51
- --------------------------------------------------------------------------------
8. MORE INFORMATION 52
- --------------------------------------------------------------------------------
About Separate Account No. 49 52
About the Trusts 52
About our fixed maturity options 52
About the general account 53
About other methods of payment 53
Dates and prices at which contract events occur 54
About your voting rights 54
About legal proceedings 55
About our independent accountants 55
Financial statements 55
Transfers of ownership, collateral assignments, loans
and borrowing 55
Distribution of the contracts 55
- --------------------------------------------------------------------------------
9. INVESTMENT PERFORMANCE 56
- --------------------------------------------------------------------------------
Communicating performance data 59
- --------------------------------------------------------------------------------
10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 60
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Market value adjustment example B-1
III -- Enhanced death benefit example C-1
IV -- Hypothetical illustrations D-1
V -- Guaranteed principal benefit example E-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
12 month Dollar Cost Averaging 23
account value 30
administrative charge 38
annual administrative charge 38
annual ratchet death benefit 27
annuitant 14
annuity maturity date 37
annuity payout options 35
annuity purchase factors 25
automatic investment program 54
beneficiary 41
Beneficiary continuation option ("BCO") 42
benefit base 24
business day 54
cash value 30
charges for state premium and other applicable taxes 39
contract date 9
contract date anniversary 9
contract year 9
contributions to traditional IRAs 48
regular contributions 48
rollovers and transfers 48
disruptive transfer activity 31
distribution charge 38
EQAccess 6
ERISA 35
Fixed-dollar option 24
fixed maturity options 21
free look 29
general account 53
general dollar cost averaging 24
guaranteed interest option 21
Guaranteed minimum death benefit 27
Guaranteed minimum income benefit 25
Guaranteed minimum income benefit charge 39
Guaranteed principal benefit 22
IRA cover
IRS 45
Inherited IRA cover
investment options cover
Investment Simplifier 24
Lifetime minimum distribution withdrawals 34
loan reserve account 35
loans under Rollover TSA 34
lump sum withdrawals 33
market adjusted amount 21
market timing 31
maturity dates 21
market value adjustment 21
maturity value 21
Mortality and expense risk charge 38
NQ cover
portfolio cover
processing office 6
Protection Plus 27
Protection Plus charge 39
rate to maturity 21
Rebalancing 32
Rollover IRA cover
roll-up death benefit 24
Roth IRA 47
SAI cover
SEC cover
self-directed allocation 22
Separate Account 49 52
Spousal protection 42
Standard death benefit 24
substantially equal withdrawals 33
Successor owner and annuitant 41
Systematic withdrawals 33
TOPS 6
Trusts cover
traditional IRA 47
TSA cover
unit 30
variable investment options 16
wire transmittals 53
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
Guaranteed minimum death benefit Guaranteed death benefit
Guaranteed minimum income benefit Guaranteed 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
$415.31 billion in assets as of December 31, 2002. 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 TRANSFERS, 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 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, including notification of eligibility to exercise the guaranteed
minimum income benefit, if applicable.
- --------------------------------------------------------------------------------
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 only for contracts distributed through AXA Distributors);
(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 Who is Equitable Life?
(6) spousal consent for loans under Rollover TSA contracts;
(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;
(5) death claims;
(6) general dollar cost averaging (including the fixed dollar and
interest sweep options); and
(7) 12 month dollar cost averaging.
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 (including the fixed dollar and
interest sweep options);
(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.
o Special 10 year fixed maturity option (available under Guaranteed principal benefit option 2 only).
----------------------------------------------------------------------------------------------------------
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. If you withdraw or transfer only a portion
of a fixed maturity amount, 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 also applies.
- ------------------------------------------------------------------------------------------------------------------------------------
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.)
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed minimum The Guaranteed minimum income benefit provides income protection for you during the annuitant's life
income benefit once the owner elects to annuitize the contract.
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution amounts o Initial minimum: $25,000
o Additional minimum: $500 (NQ and Rollover TSA)
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
$1,000 (Inherited IRA contracts)
$50 (IRA contracts)
Maximum contribution limitations may apply. In general, contributions are limited to $1.5 million
($500,000 for owners or annuitants who are age 81 and older at contract issue).
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
8 Equitable Accumulator(R) Select(SM) at a glance -- key features
- ------------------------------------------------------------------------------------------------------------------------------------
Additional features o Guaranteed minimum death benefit options
o Guaranteed principal 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
o Spousal protection
o Successor owner/annuitant
- ------------------------------------------------------------------------------------------------------------------------------------
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 0.50%, 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 0.55% of the applicable benefit base charge for the optional Guaranteed minimum income benefit
until you exercise the benefit, elect another annuity payout option or the contract date anniversary after
the annuitant reaches age 85, whichever occurs first.
o An annual charge for the optional Guaranteed principal benefit option 2 deducted the first 10 contract
date anniversaries equal to 0.50% of account value.
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." For example, if your contract date is May 1, your contract
date anniversary is April 30.
-------------------------------------------------------------------------------------------------------------
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 0.10% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses. In addition, each AXA Allocation Portfolio will invest in
shares of other Portfolios of the EQ Advisors Trust and AXA Premier VIP Trust (the "Underlying
Portfolios"). Therefore, each AXA Allocation Portfolio will, in addition to its own expenses such as
management fees, bear its pro rata share of the fees and expenses incurred by the Underlying Portfolios
and the investment return of each AXA Allocation Portfolio will be reduced by the Underlying Portfolio's
expenses. The anticipated range of expenses expected to be incurred in connection with each AXA Allocation
Portfolio's investments in Underlying Portfolios is set forth in the AXA Premier VIP Trust prospectus.
- ------------------------------------------------------------------------------------------------------------------------------------
Annuitant issue ages NQ: 0-85
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-85
Inherited IRA: 0-70
- ------------------------------------------------------------------------------------------------------------------------------------
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.
Equitable Accumulator(R) Select(SM) at a glance -- key features 9
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.
10 Equitable Accumulator(R) Select(SM) at a glance -- key features
Fee table
- --------------------------------------------------------------------------------
The following tables describe the fees and expenses that you will pay when
buying and owning the contract. Each of the charges and expenses is more fully
described in "Charges and expenses" later in this Prospectus.
The first table describes fees and expenses that you will pay if you purchase a
Variable Immediate Annuity payout option. Charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your state,
may also apply. Charges for certain features shown in the fee table are
mutually exclusive.
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
The next table describes the fees and expenses that you will pay periodically
during the time that you own the contract, not including the underlying trust
portfolio fees and expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
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%
- ------------------------------------------------------------------------------------------------------------------------------------
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 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
for which the benefit is in effect.)
Standard death benefit 0.00%
Annual Ratchet to age 85 0.25% of the Annual Ratchet to age 85 benefit base
Greater of 5% Roll up to age 85 or Annual Ratchet to age 85 0.50% of the greater of the 5% Roll up to age 85
benefit base or the Annual Ratchet to age 85 benefit
base, as applicable
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed principal benefit charge for option 2 (calculated as
a percentage of the account value. Deducted annually on the first 10
contract date anniversaries.) 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed minimum income benefit charge (calculated as a
percentage of the applicable benefit base. Deducted annually on each
contract date anniversary for which the benefit is in effect.) 0.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Protection Plus benefit charge (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary
for which the benefit is in effect.) 0.35%
- ------------------------------------------------------------------------------------------------------------------------------------
Net loan interest charge -- Rollover TSA contracts only
(calculated and deducted daily as a percentage of the outstanding loan
amount) 2.00%(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Fee table 11
You also bear your proportionate share of all fees and expenses paid by a
"Portfolio" that corresponds to any variable investment option you are using.
This table shows the lowest and highest total operating expenses charged by any
of the Portfolios that you will pay periodically during the time that you own
the contract. These fees and expenses are reflected in the Portfolio's net
asset value each day. Therefore, they reduce the investment return of the
Portfolio and the related variable investment option. Actual fees and expenses
are likely to fluctuate from year to year. More detail concerning each
Portfolio's fees and expenses is contained in the Trust prospectus for the
Portfolio.
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio operating expenses expressed as an annual percentage of daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002 (expenses that are deducted Lowest Highest
from Portfolio assets including management fees, 12b-1 fees, service fees, ------ --=----
and/or other expenses)(3) 0.57% 3.77%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) During the first two contract years this charge, if it applies, is equal to
the lesser of $30 or 2% of your account value. Thereafter, the charge is $30
for each contract year.
(2) We charge interest on loans under Rollover TSA contracts but also credit you
interest on your loan reserve account. Our net loan interest charge is
determined by the excess between the interest rate we charge over the
interest rate we credit. See "Loans under Rollover TSA contracts" later in
this Prospectus for more information on how the loan interest is calculated
and for restrictions that may apply.
(3) Equitable Life, the manager of AXA Premier VIP Trust and EQ Advisors Trust,
has entered into Expense Limitation Agreements with respect to certain
Portfolios, which are effective through April 30, 2004. Under these
agreements Equitable Life has agreed to waive or limit its fees and assume
other expenses of certain Portfolios, if necessary, in an amount that limits
each affected Portfolio's total Annual Expenses (exclusive of interest,
taxes, brokerage commissions, capitalized expenditures and extraordinary
expenses) to not more than specified amounts. Morgan Stanley Investment
Management Inc., which does business in certain instances as "Van Kampen,"
is the manager of the Universal Institutional Funds, Inc. -- U.S. Real
Estate Portfolio -- Class I and has voluntarily agreed to reduce its
management fee and/or reimburse the Portfolio so that total annual operating
expenses of the Portfolio (exclusive of investment related expenses, such as
foreign country tax expense and interest expense on amounts borrowed) are
not more than specified amounts. Van Kampen reserves the right to terminate
any waiver and/or reimbursement at any time without notice. AXA Rosenberg
Investment Management LLC, the manager of the Barr Rosenberg Variable
Insurance Trust -- AXA Rosenberg VIT Value Long/Short Equity Fund, has
voluntarily agreed to reimburse expenses in excess of specified amounts. See
the Prospectus for each applicable underlying Trust for more information
about the arrangements. In addition, a portion of the brokerage commissions
each EQ Advisors Trust Portfolio and each AXA Premier VIP Trust Portfolio
pays is used to reduce the Portfolio's expenses. If the table reflected
these expense limitation arrangements and the portion of the brokerage
commissions used to reduce portfolio expenses, the lowest and highest
figures would be as shown in the table below (based on estimated amounts for
the current fiscal year, since initial seed capital was invested for the
portfolio representing the "Lowest" figure on July 31, 2003 and for the
portfolio representing the "Highest" figure on May 2, 2003):
- --------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002 Lowest Highest
(expenses that are deducted from Portfolio assets ------ -------
including management fees, 12b-1 fees, service fees, 0.35% 2.00%
and/or other expenses) after expense cap
- --------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002
(expenses that are deducted from Portfolio assets
including management fees, 12b-1 fees, service fees,
and/or other expenses) after expense cap and after a
portion of the brokerage commissions that the Port-
folio pays is used to reduce the Portfolio's expenses. 0.35% 2.00%
- --------------------------------------------------------------------------------
12 Fee table
EXAMPLE
This example is intended to help you compare the cost of investing in the
contract with the cost of investing in other variable annuity contracts. These
costs include contract owner transaction expenses, contract fees, separate
account annual expenses, and underlying trust fees and expenses.
The example below shows the expenses that a hypothetical contract owner (who
has elected the Guaranteed minimum income benefit with the enhanced death
benefit that provides for the greater of the 5% Roll up to age 85 or the Annual
Ratchet to age 85 and Protection Plus) would pay in the situations illustrated.
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 $0.50 per $10,000.
The fixed maturity options, guaranteed interest option and the 12 month dollar
cost averaging program are not covered by the examples. However, the annual
administrative charge, the charge for any optional benefits and the charge if
you elect a Variable Immediate Annuity payout option do apply to the fixed
maturity options, guaranteed interest option and the 12 month dollar cost
averaging program. 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.
This 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 example is not an
estimate or guarantee of future investment performance.
The example assumes that you invest $10,000 in the contract for the time
periods indicated. The example also assumes that your investment has a 5%
return each year and assumes the highest and lowest fees and expenses of any of
the underlying trust portfolios. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:
If you surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $385.86 $1,183.75 $2,017.85 $4,272.49
Highest $721.84 $2,141.46 $3,529.56 $6,866.53
If you annuitize at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 735.86 $1,533.75 $2,367.85 $4,622.49
Highest $1,071.84 $2,491.46 $3,879.56 $7,216.53
If you do not surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $385.86 $1,183.75 $2,017.85 $4,272.49
Highest $721.84 $2,141.46 $3,529.56 $6,866.53
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, 2002.
Fee table 13
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 for NQ and Rollover TSA contracts and $50 for Rollover IRA and Roth
Conversion contracts and $1000 for Inherited IRA contracts, 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.
We may refuse to accept any contribution if the sum of all contributions under
all Equitable Accumulator(R) series contracts with the same owner or annuitant
would then total more than $1,500,000 ($500,000 for owners or annuitants who
are age 81 and older at contract issue). 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 with the same owner or annuitant would then total more than
$2,500,000.
- --------------------------------------------------------------------------------
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 contributions
tracts or other 403(b) arrangements, 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 each of
o Direct custodian-to-custodian transfers from calendar years 2003 and 2004) under the
another traditional individual retirement 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 of up to
o Additional "catch-up" contributions. $500 can be made for the calendar year
2003 or 2004 where the owner is at least
age 50 but under age 70-1/2 at any time dur-
ing the calendar year for which the
contribution is made.
- ------------------------------------------------------------------------------------------------------------------------------------
14 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Available
Contract for annuitant Limitations on
type issue ages Source of contributions contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
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
o Direct transfers from another Roth IRA. be net of required minimum distributions
for the traditional IRA you are rolling
o Regular Roth IRA contributions. over.
o Additional catch-up contributions. 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 (limited to $3,000 for each
of calendar years 2003 and 2004) under the
Roth IRA contracts, we intend that this
contract be used primarily for rollover
and direct transfer contributions.
o Additional catch-up contributions of up to
$500 can be made for the calendar year
2003 or 2004 where the owner is at least
age 50 at any time during the calendar
year for which the contribution is made.
- ------------------------------------------------------------------------------------------------------------------------------------
Inherited IRA 0-70 o (If contract is traditional IRA) Direct o Any additional contributions must be from
Beneficiary custodian-to-custodian transfers of your same type of IRA of same deceased owner.
Continuation interest as death beneficiary of the
Contract deceased owner's traditional individual
(traditional IRA retirement arrangement.
or Roth IRA)
o (If contract is Roth IRA) Direct custodian-
to-custodian transfers of your interest as
death beneficiary of the deceased owner's
Roth IRA.
- ------------------------------------------------------------------------------------------------------------------------------------
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. Subsequent o Employer-remitted contributions are not
contributions may also be rollovers from permitted.
qualified plans, governmental EDC plans
and traditional IRAs.
- ------------------------------------------------------------------------------------------------------------------------------------
+ If you purchase Guaranteed principal benefit option 2, no contributions are
permitted after the six month period beginning on the contract date.
* For Pennsylvania, if the annuitant was 0-75 at contract issue, the maximum
contribution age is 85.
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. 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 15
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. We do not
permit partnerships or limited liability corporations to be owners. We also
reserve the right to prohibit availability of this contract to other
non-natural owners. Only natural persons can be joint owners. In general, we
will not permit a contract to be owned by a minor unless it is pursuant to the
Uniform Gift to Minors Act or the Uniform Transfers to Minors Act in your
state. If the Spousal protection feature is elected, the spouses must be joint
owners, one of the spouses must be the annuitant and both must be named as the
only primary beneficiaries.
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. See Inherited IRA beneficiary
continuation contract later in this section for inherited IRA owner and
annuitant requirements.
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/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.
- --------------------------------------------------------------------------------
16 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)
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.
Equitable Life serves as the investment manager of the Portfolios of the EQ
Advisors Trust and the AXA Premier VIP Trust. 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. The
advisers for these Portfolios, listed in the chart below, are those who make
the investment decisions for each Portfolio. The chart also indicates the
investment manager for each of the other Portfolios.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA AGGRESSIVE ALLOCATION Seeks long-term capital appreciation. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE ALLOCATION Seeks a high level of current income. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE-PLUS Seeks current income and growth of capital, with a o Equitable Life
ALLOCATION greater emphasis on current income.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA MODERATE ALLOCATION Seeks long-term capital appreciation and current income. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA MODERATE-PLUS Seeks long-term capital appreciation and current income, o Equitable Life
ALLOCATION with a greater emphasis on capital appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP AGGRESSIVE Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
EQUITY o MFS Investment Management
o Marsico Capital Management, LLC
o Provident Investment Counsel, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP CORE BOND Seeks a balance of a high current income and capital o BlackRock Advisors, Inc.
appreciation, consistent with a prudent level of risk. o Pacific Investment Management
Company LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HEALTH CARE Seeks long-term growth of capital. o A I M Capital Management, Inc.
o Dresdner RCM Global Investors LLC
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HIGH YIELD Seeks to achieve a high total return through a combina- o Alliance Capital Management L.P.
tion of current income and capital appreciation. o Pacific Investment Management
Company LLC (PIMCO)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP Seeks long-term growth of capital. o Alliance Capital Management L.P.,
INTERNATIONAL EQUITY through its Bernstein Investment
Research and Management Unit
o Bank of Ireland Asset Management
(U.S.) Limited
o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.,
CORE EQUITY through its Bernstein Investment
Research and Management Unit
o Janus Capital Management LLC
o Thornburg Investment Management,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 17
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
GROWTH o Dresdner RCM Global Investors LLC
o TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
VALUE o Institutional Capital Corporation
o MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o Alliance Capital Management L.P.
CAP GROWTH o Franklin Advisers Inc.
o Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o AXA Rosenberg Investment Management LLC
CAP VALUE o TCW Investment Management Company
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TECHNOLOGY Seeks long-term growth of capital. o Alliance Capital Management L.P.
o Dresdner RCM Global Investors LLC
o Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE COMMON STOCK Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH AND Seeks to provide a high total return. o Alliance Capital Management L.P.
INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERMEDIATE Seeks to achieve high current income o Alliance Capital Management L.P.
GOVERNMENT SECURITIES consistent with relative stability of
principal.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERNATIONAL Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH To achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE QUALITY BOND Seeks to achieve high current income o Alliance Capital Management L.P.
consistent with moderate risk to capital.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE SMALL CAP Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
Current income is incidental to the
Portfolio's objective.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BERNSTEIN DIVERSIFIED VALUE Seeks capital appreciation. o Alliance Capital Management L.P.,
through its Bernstein Investment Research
and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY Seeks long-term capital appreciation. o Calvert Asset Management Company, Inc.
RESPONSIBLE and Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN U.S. To achieve long-term growth of capital. o Capital Guardian Trust Company
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EMERGING MARKETS EQUITY Seeks long-term capital appreciation. o Morgan Stanley Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX Seeks a total return before expenses that o 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.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN OMEGA Seeks long-term capital growth. o Evergreen Investment Management Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI MID CAP Seeks long-term growth of capital. o Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI SMALL/MID CAP VALUE Seeks long-term capital appreciation. o Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. MORGAN CORE BOND Seeks to provide a high total return consistent o J.P. Morgan Investment Management Inc.
with moderate risk of capital and maintenance
of liquidity.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/JANUS LARGE CAP GROWTH Seeks long-term growth of capital. o Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/LAZARD SMALL CAP VALUE Seeks capital appreciation. o Lazard Asset Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MARSICO FOCUS Seeks long-term growth of capital. o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MERCURY BASIC VALUE Seeks capital appreciation and secondarily, o Mercury Advisors
EQUITY income.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS EMERGING GROWTH Seeks to provide long-term capital growth. o MFS Investment Management
COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS INVESTORS TRUST Seeks long-term growth of capital with secondary o MFS Investment Management
objective to seek reasonable current income.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MONEY MARKET Seeks to obtain a high level of current income, o Alliance Capital Management L.P.
preserve its assets and maintain liquidity.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME Seeks capital growth. Current income is a o Putnam Investment Management, LLC
VALUE secondary objective.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL Seeks capital appreciation. o Putnam Investment Management, LLC
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM VOYAGER Seeks long-term growth of capital and any o Putnam Investment Management, LLC
increased income that results from this growth.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/SMALL COMPANY INDEX Seeks to replicate as closely as possible o Alliance Capital Management L.P.
(before the deduction of Portfolio expenses)
the total return of the Russell 2000 Index.
- ------------------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg
Variable Insurance Trust
Portfolio Name Objective Investment Manager
- ------------------------------------------------------------------------------------------------------------------------------------
AXA ROSENBERG VIT VALUE Seeks to increase the value of your investment o AXA Rosenberg Investment Management LLC
LONG/SHORT EQUITY in bull markets and bear markets through
strategies that are designed to have limited
exposure to general equity market risk.
- ------------------------------------------------------------------------------------------------------------------------------------
The Universal Institutional
Funds, Inc.
Portfolio Name Objective Investment Manager
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Real Estate -- Seeks to provide above average current income o Van Kampen(2)
Class I(1) and longterm capital appreciation by investing
primarily in equity securities of companies in
the U.S. real estate industry, including real
estate investment trusts.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) `Class I' shares are defined in the current underlying Trust prospectus.
(2) Van Kampen is the name under which Morgan Stanley Investment Management
Inc. does business in certain situations.
Other important information about the portfolios is included in the
Prospectuses for each Trust that accompany 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 rate for 2003 is equal to the lifetime minimum rate of your
contract. Depending on the state where your contract is issued, your lifetime
minimum rate is either 1.5% or 3.00%. The data page for your contract shows the
lifetime minimum rate. The annual minimum rate will never be less than the
lifetime minimum rate. Check with your financial professional as to which rate
applies in your state. Current interest rates will never be less than the
yearly guaranteed interest rate.
Generally, contributions and transfers into and out of the guaranteed interest
option are limited. See "Transferring your money among the investment options"
later in the prospectus for restrictions on transfers to and from the
guaranteed interest option.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. We will not accept allocations to a fixed maturity option if on the date
the contribution or transfer is to be applied the rate to maturity is 3%. This
means that at points in time there may be no fixed maturity options available.
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.
- --------------------------------------------------------------------------------
Under the Special 10 year fixed maturity option (which is available only under
GPB Option 2), additional contributions will have the same maturity date as
your initial contribution (see "the Guaranteed Principal benefits" below.) The
rate to maturity you will receive for each additional contribution is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution.
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.
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 subsequent contributions to the contract after 60 days, transfers from the
variable investment options or the guaranteed interest option into a fixed
maturity option or transfers from one fixed maturity option to another.
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. As of February 14,
2003, the next available maturity date was February 14, 2009. If no fixed
maturity options are available we will transfer your maturity value to the
EQ/Money Market option.
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
Contract features and benefits 21
(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 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, the guaranteed principal benefits 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. No more than 25% of any contribution may be allocated to the
guaranteed interest option. The total of your allocations must equal 100%. If
the annuitant is age 76-80, you may allocate contributions to fixed maturity
options with maturities of seven years or less. If the annuitant is age 81 or
older, you may allocate contributions to fixed maturity options with maturities
of 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.
THE GUARANTEED PRINCIPAL BENEFITS
Subject to state availability, we offer a guaranteed principal benefit ("GPB")
with two options. You may only elect one of the GPBs. Neither GPB is available
under Inherited IRA contracts. We will not offer either GPB when the rate to
maturity for the applicable fixed maturity option is 3%. If you elect either
GPB, you may not elect the Guaranteed minimum income benefit, the systematic
withdrawals option or the substantially equal withdrawals options. Both GPB
options allow you to allocate a portion of your contribution or contributions
to the variable investment options, while ensuring that your account value will
at least equal your contributions, adjusted for withdrawals and transfers, on a
specified date. GPB Option 2 generally provides you with the ability to
allocate more of your contributions to the variable investment options than
could be allocated using GPB Option 1.
You may elect GPB Option 1 only if the annuitant is age 80 or younger when the
contract is issued (after age 75, only the 7-year fixed maturity option is
available). You may elect GPB Option 2 only if the annuitant is age 75 or
younger when the contract is issued. If you are purchasing an IRA or Rollover
TSA contract, before you either purchase GPB Option 2 or elect GPB Option 1
with 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, guaranteed interest option and permissible funds outside this contract
are sufficient to meet your required minimum distributions. See "Tax
information" later in this Prospectus and in the SAI.
GUARANTEED PRINCIPAL BENEFIT OPTION 1. Under GPB Option 1, you select a fixed
maturity option at the time you sign your application. 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
percentage of your contribution allocated to the fixed maturity option will be
calculated based upon the rate to maturity then in effect for the fixed
maturity option you choose. Your contract will contain information on the
amount of your contribution allocated to the fixed maturity option. If you make
any withdrawals or transfers from the fixed maturity option before the option's
maturity date, the amount in the fixed maturity option will be adjusted and may
no longer grow to equal your initial contribution under GPB Option 1. The
maturity date you select generally may not be later than 10 years, or earlier
than 7 years from your contract date. You may allocate the rest of your initial
contribution to the investment options however you choose, other than the
Investment simplifier. (If you elect the General or 12 month dollar cost
averaging program, the remainder of your initial contribution (that is, amounts
other than those allocated to the fixed maturity option under GPB Option 1)
must be allocated to that dollar cost averaging program). Upon the maturity
date of the fixed maturity option, you will be provided with the same notice
and the same choices with respect to the maturity value as described above
under "Your choices at the maturity date." There is no charge for GPB Option 1.
GUARANTEED PRINCIPAL BENEFIT OPTION 2. You may purchase GPB Option 2 at the
time you apply for your contract. IF YOU PURCHASE GPB OPTION 2, YOU MAY NOT
MAKE ADDITIONAL CONTRIBUTIONS TO YOUR CONTRACT AFTER SIX MONTHS FROM THE
CONTRACT ISSUE DATE OR AT ANY EARLIER TIME IF AT SUCH TIME THE THEN APPLICABLE
RATE TO MATURITY ON THE SPECIAL 10 YEAR FIXED MATURITY OPTION IS 3%. Therefore,
any discussion in this Prospectus that involves any additional contributions
after the first six months will be inapplicable.
We specify the portion of your initial contribution, and any additional
permitted contributions, to be allocated to a special 10 year fixed maturity
option. Your contract will contain information on the percentage of applicable
contributions allocated to the Special 10 year fixed maturity option. You may
allocate the rest of your contributions among the investment options (other
than the Special 10 year fixed maturity option) however you choose, as
permitted under your contract, and other than the Investment simplifier. (If
you elect the General or 12 month dollar cost averaging program, the remainder
of all contributions (that is, amounts other than those allocated to the
Special 10 year fixed maturity option) must be allocated to that dollar cost
aver-
22 Contract features and benefits
aging program). The Special 10 year fixed maturity option will earn interest at
the specified rate to maturity then in effect.
If on the 10th contract date anniversary, your annuity account value is less
than the amount that is guaranteed under GPB Option 2, we will increase your
annuity account value to be equal to the guaranteed amount under GPB Option 2.
Any such additional amounts added to your annuity account value will be
allocated to the EQ/Money Market investment option. After the maturity date of
the Special 10 year fixed maturity option, the guarantee under GPB Option 2
will terminate. Upon the maturity date of the Special 10 year fixed maturity
option, you will be provided with the same notice and the same choices with
respect to the maturity value as described above under "Your choices at the
maturity date." Your GPB Option 2 amount is equal to your initial contribution
adjusted for any additional permitted contributions, transfers out of the
Special 10 year fixed maturity option and withdrawals from the contract (see
"How withdrawals (and transfers out of the Special 10 year fixed maturity
option) affect your Guaranteed minimum income benefit, Guaranteed minimum death
benefit and Guaranteed principal benefit option 2" in "Accessing your money"
later in this Prospectus). Any transfers or withdrawals from the Special 10
year fixed maturity option will also be subject to a market value adjustment
(see "Market value adjustment" under "Fixed maturity options" above in this
section).
GPB Option 2 will terminate if the contract terminates before the maturity date
of the Special 10 year fixed maturity option. If the owner and the annuitant
are different people and the owner dies before the maturity date of the Special
10 year fixed maturity option, we will continue GPB Option 2 only if the
contract can continue through the maturity date of the Special 10 year fixed
maturity option. If the contract cannot so continue, we will terminate GPB
Option 2. GPB Option 2 will continue where there is a successor
owner/annuitant. GPB Option 2 will terminate upon the exercise of the
beneficiary continuation option. See "Payment of death benefit" later in this
Prospectus for more information about the continuation of the contract after
the death of the owner and/or the annuitant.
GPB Option 2 is not an account value or a cash value. There is a fee associated
with GPB Option 2 (see "Charges and expenses" later in this Prospectus). You
should note that the purchase of GPB Option 2 is not appropriate if you want to
make additional contributions to your contract beyond the first six months after
your contract is issued. If you later decide that you would like to make
additional contributions to the Accumulator(R) Select(SM) contract, we may
permit you to purchase another contract. If we do, however, you should note that
we do not reduce or waive any of the charges on the new contract, nor do we
guarantee that the features available under this contract will be available
under the new contract. This means that you might end up paying more with
respect to certain charges than if you had simply purchased a single contract
(for example, the administrative charge).
The purchase of GPB Option2 is also not appropriate if you plan on terminating
your contract before the maturity date of the Special 10 year fixed maturity
option. In addition, because we prohibit contributions to your contract after
the first six months, certain contract benefits that are dependent upon
contributions or account value will be limited (for example the guaranteed
death benefits and Protection Plus). You should also note that if you intend to
allocate a large percentage of your contributions to the guaranteed interest
option or other fixed maturity options, the purchase of GPB Option 2 may not be
appropriate because of the guarantees already provided by these options. An
example of the effect of GPB Option 1 and GPB Option 2 on your annuity contract
is included in Appendix V later in this Prospectus.
DOLLAR COST AVERAGING
We offer a variety of dollar cost averaging programs. You may only participate
in one program at a time. Each program allows you to gradually allocate amounts
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 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 or the guaranteed interest
option.
- --------------------------------------------------------------------------------
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/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 earlier in 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/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/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/Money Market option.
Contract features and benefits 23
You may not transfer amounts to the EQ/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/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/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/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/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/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/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.
INVESTMENT SIMPLIFIER
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. 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.
Interest sweep option. Under this option, you may elect to have monthly
transfers from amounts in the guaranteed interest option into the variable
investment options of your choice. The transfer date will be the last business
day of the month. The amount we will transfer will be the interest credited to
amounts you have in the guaranteed interest option from the last business day
of the prior month to the last business day of the current month. You must have
at least $7,500 in the guaranteed interest option on the date we receive your
election and on the last business day of each month thereafter to participate
in the interest sweep option. We will automatically cancel the interest sweep
program if the amount in the guaranteed interest option is less than $7,500 on
the last day of the month for two months in a row.
----------------------------------
You may not participate in any dollar cost averaging program if you are
participating in the rebalancing program. If you elect a GPB, you may also
elect the 12 month or General dollar cost averaging program. If you elect
either of these programs, everything other than amounts allocated to the fixed
maturity option under the GPB must be allocated to that dollar cost averaging
program. You may still elect the Investment simplifier for amounts transferred
from investment options (other than the fixed maturity option under the GPB you
have elected), and, for GPB Option 1, you may also elect Investment simplifier
for subsequent contributions. See "Transferring your money among investment
options" later in this Prospectus. For the fixed-dollar option and the interest
sweep option, the first monthly transfer will occur on the last business day of
the month following the month that we receive your election form at our
processing office.
YOUR BENEFIT BASE
A benefit base is used to calculate the Guaranteed minimum income benefit and
the death benefits as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Guaranteed minimum income 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
5% ROLL UP TO AGE 85 (USED FOR THE GREATER OF THE 5% ROLL UP TO AGE 85 OR THE
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM
INCOME BENEFIT). Your benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
24 Contract features and benefits
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
The effective annual interest rate credited to this benefit base is:
o 5% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/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/Money Market, the fixed maturity options, the Special 10 year fixed
maturity option, 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 (USED FOR THE ANNUAL RATCHET TO AGE 85 ENHANCED DEATH
BENEFIT, THE GREATER OF THE 5% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE
85 ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM INCOME 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
GREATER OF THE 5% 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 5% Roll up to age 85
or the benefit base computed for 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 Guaranteed
minimum income benefit option" below 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 GUARANTEED MINIMUM INCOME BENEFIT OPTION
The Guaranteed minimum income 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 Guaranteed minimum income benefit which is described under "Guaranteed
minimum income benefit charge" in "Charges and expenses" later in this
Prospectus. Please ask your financial professional if the Guaranteed minimum
income benefit is available in your state.
If you are purchasing this contract as an Inherited IRA or if you elect a GPB,
the Guaranteed minimum income benefit is not available. If you are purchasing
this contract to fund a Charitable Remainder Trust, the Guaranteed minimum
income benefit is not available except for certain split-funded Charitable
Remainder Trusts. If the annuitant was older than age 60 at the time an IRA or
Rollover TSA contract was issued, the Guaranteed minimum income 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.
The Guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or a 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 life with a
period certain payout option is 10 years. This period may be shorter, depending
on the annuitant's age as follows:
Level payments
- --------------------------------------
Period certain
years
-----------------
Annuitant's
age at exercise IRAs NQ
- --------------------------------------
75 and younger 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
84 6 6
85 5 5
- --------------------------------------
Contract features and benefits 25
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 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 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 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. The benefit base is applied only to the guaranteed annuity
purchase factors under the Guaranteed minimum income benefit in your contract
and not to any other guaranteed or current annuity purchase rates.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. For a
discussion of when your payments will begin and end, see "Exercise of
Guaranteed minimum income benefit" below.
Before you elect the Guaranteed minimum income benefit, you should consider the
fact that it provides a form of insurance and is based on conservative
actuarial factors. The guaranteed annuity purchase factors we use to determine
your payout annuity benefit under the Guaranteed minimum income benefit are
more conservative than the guaranteed annuity purchase factors we use for our
standard payout annuity options. 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 Guaranteed
minimum income benefit payout annuity will be smaller than each periodic
payment under our standard payout annuity options. 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.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 5% 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/Money
Market, the guaranteed interest option, the fixed maturity options (including
the Special 10 year fixed maturity option) 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 date anniversary. You must 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 annual payments one year after the annuity payout contract is
issued. You may choose to take a withdrawal prior to exercising the Guaranteed
minimum income benefit, which will reduce your payments. See "Accessing your
money" under "Withdrawing your account value" later in this Prospectus.
Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death or, if later, then end of the period certain
(where the payout option chosen includes a period certain).
EXERCISE RULES. You 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 within 30 days following 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) 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; and
(iv) a successor owner/annuitant may only continue the Guaranteed minimum
income benefit if the contract is not past the last date on which the
original annuitant could have exercised the benefit. In addition, the
successor owner/annuitant must be eligible to
26 Contract features and benefits
continue the benefit and to exercise the benefit under the applicable
exercise rule (described in the above bullets) using the following
additional rules. The successor owner/annuitant's age on the date of the
annuitant's death replaces the annuitant's age at issue for purposes of
determining the availability of the benefit and which of the exercise
rules applies. The original contract issue date will continue to apply for
purposes of the exercise rules.
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
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
(adjusted for any withdrawals and any taxes that apply).
If you elect one of the enhanced death benefits, 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 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 (adjusted for any subsequent
withdrawals and taxes that apply), whichever provides the highest amount. If
you elect the Spousal protection option, the Guaranteed minimum death benefit
is based on the age of the older spouse, who may or may not be the annuitant,
for the life of the contract. See "Spousal protection" in "Payment of death
benefit" later in this Prospectus for more information.
OPTIONAL ENHANCED DEATH BENEFITS APPLICABLE FOR ANNUITANT AGES 0 THROUGH 75 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 84 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 0 THROUGH 70 AT ISSUE OF INHERITED IRA
CONTRACTS.
Subject to state availability, you may elect one of the following enhanced
death benefits:
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 5% 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. In New York, only the standard
death benefit and the Annual Ratchet to age 85 enhanced death benefit are
available.
The standard death benefit is the only death benefit available for annuitants
ages 76 through 85 at issue of NQ, Rollover IRA, Roth Conversion IRA and
Rollover TSA contracts.
----------------------------------
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals and (transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
See Appendix III 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) adjusted for each withdrawal that exceeds your
Protection Plus earnings. "Net contributions" are reduced by the amount of that
excess. Protection Plus earnings are equal to (a) minus (b) where (a) is the
greater of the account value and the death benefit immediately prior to the
withdrawal and (b) is the net contributions as adjusted by any prior
withdrawals; and (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 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 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 death benefit
Contract features and benefits 27
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. Reduction on a pro rata basis
means that we calculate the percentage of the current account value that is
being withdrawn and we reduce the benefit 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 benefit is $40,000 before the withdrawal, it
would be reduced by $16,000 ($40,000 x .40) and the benefit after the
withdrawal would be $24,000 ($40,000 - $16,000).
If you elect Spousal protection, the Protection Plus benefit is based on the
age of the older spouse, who may or may not be the annuitant. Upon the death of
the non-annuitant spouse, the account value will be increased by the value of
the Protection Plus benefit as of the date we receive due proof of death. Upon
the death of the annuitant, the value of the Protection Plus benefit is either
added to the death benefit payment or to the account value if Successor
owner/annuitant is elected. If the surviving spouse elects to continue the
contract, the benefit will be based on the age of the surviving spouse as of
the date of the non-surviving spouse's death for the remainder of the contract.
If the surviving spouse is age 76 or older, the benefit will terminate and the
charge will no longer be in effect. See "Spousal protection" in "Payment of
death benefit" later in this Prospectus for more information.
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.
INHERITED IRA BENEFICIARY CONTINUATION CONTRACT
This contract is available to an individual beneficiary of a traditional IRA or
a Roth IRA where the deceased owner held the individual retirement account or
annuity (or Roth individual retirement account or annuity) with an insurance
company or financial institution other than Equitable. The purpose of the
inherited IRA beneficiary continuation contract is to permit the beneficiary to
change the funding vehicle that the deceased owner selected ("original IRA")
while taking the required minimum distribution payments that must be made to
the beneficiary after the deceased owner's death. This contract is intended
only for beneficiaries who want to take payments at least annually over their
life expectancy. These payments generally must begin (or must have begun) no
later than December 31 of the calendar year following the year the deceased
owner died. This contract is not suitable for beneficiaries electing the
"5-year rule." See "Beneficiary continuation option for IRA and Roth IRA
contracts" under "Beneficiary continuation option" in "Payment of death
benefit" later in this Prospectus. You should discuss with your tax advisor
your own personal situation. This contract may not be available in all states.
Please speak with your financial professional for further information.
The inherited IRA beneficiary continuation contract can only be purchased by a
direct transfer of the beneficiary's interest under the deceased owner's
original IRA. The owner of the inherited IRA beneficiary continuation contract
is the individual who is the beneficiary of the original IRA. (Certain trusts
with only individual beneficiaries will be treated as individuals for this
purpose). The contract must also contain the name of the deceased owner. In
this discussion, "you" refers to the owner of the inherited IRA beneficiary
continuation contract.
The inherited IRA beneficiary continuation contract can be purchased whether or
not the deceased owner had begun taking required minimum distribution payments
during his or her life from the original IRA or whether you had already begun
taking required minimum distribution payments of your interest as a beneficiary
from the deceased owner's original IRA. You should discuss with your own tax
advisor when payments must begin or must be made.
Under the inherited IRA beneficiary continuation contract:
o You must receive payments at least annually (but can elect to receive
payments monthly or quarterly). Payments are generally made over your life
expectancy determined in the calendar year after the deceased owner's
death and determined on a term certain basis.
o The beneficiary of the original IRA will be the annuitant under the
inherited IRA beneficiary continuation contract. In the case where the
beneficiary is a "See Through Trust," the oldest beneficiary of the trust
will be the annuitant.
o An inherited IRA beneficiary continuation contract is not available for
annuitants over age 70.
o The initial contribution must be a direct transfer from the deceased
owner's original IRA and is subject to minimum contribution amounts. See
"How you can purchase and contribute to your contract" earlier in this
section.
o Subsequent contributions of at least $1,000 are permitted but must be
direct transfers of your interest as a beneficiary from another IRA with a
financial institution other than Equitable, where the deceased owner is
the same as under the original IRA contract.
o You may make transfers among the investment options.
o You may choose at any time to withdraw all or a portion of the account
value. Any partial withdrawal must be at least $300.
o The Guaranteed minimum income benefit, successor owner/annuitant feature,
12-month dollar cost averaging program, automatic investment program, GPB
Option 2 and systematic withdrawals are not available under the Inherited
IRA beneficiary continuation contract.
o If you die, we will pay to a beneficiary that you choose the greater of the
annuity account value or the applicable death benefit.
o Upon your death, your beneficiary has the option to continue taking
required minimum distributions based on your remaining life expectancy or
to receive any remaining interest in the contract in a single sum. The
option elected will be processed when we receive satisfactory proof of
death, any required instructions for the method of payment and any
required information and forms necessary to effect payment. If your
beneficiary elects to continue to take distributions, we will increase the
account value to equal
28 Contract features and benefits
the applicable death benefit if such death benefit is greater than such
account value as of the date we receive satisfactory proof of death and
any required instructions, information and forms. If you had elected any
enhanced death benefits, they will no longer be in effect and charges for
such benefits will stop. The Guaranteed minimum death benefit will also no
longer be in effect.
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, with a signed letter of instruction electing this right, 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 be the same as any other surrender and you will
receive your account value under the contract on the day we receive
notification of your decision to cancel the contract, which 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,
however, 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.
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 values you have in: (i) the variable
investment options; (ii) the guaranteed interest option; (iii) market adjusted
amounts in the fixed maturity options; and (iv) the loan reserve account
(applicable to Rollover TSA contracts only).
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, Guaranteed minimum
income benefit, GPB Option 2 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, which reflects withdrawals out of
the option and charges we deduct. 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.
TERMINATION OF YOUR CONTRACT
Your contract will terminate without value if your account value is
insufficient to pay any applicable charges when due. Your account value could
become insufficient due to withdrawals and/or poor market performance. Upon
such termination, you will lose any applicable guaranteed benefits.
30 Determining your contract's value
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 has a rate to maturity
of 3% or less.
o You may not transfer any amount to the 12-month dollar cost averaging
program.
o If the annuitant is age 76-80, you must limit your transfers to fixed
maturity options with maturities of seven years or less. If the annuitant
is age 81 or older, you must limit your transfers to fixed maturity
options of five years or less. As of February 14, 2003 maturities of less
than six years were not available. 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 and affect
your GPB.
o During the first contract year, transfers into the guaranteed interest option
are not permitted.
o After the first contract year, a transfer into the guaranteed interest option
will not be permitted if such transfer would result in more than 25% of
the annuity account value being allocated to the guaranteed interest
option, based on the annuity account value as of the previous business
day.
o No transfers are permitted into the Special 10 year fixed maturity option.
In addition, we reserve the right to restrict transfers among variable
investment options as described in your contract, including limitations on the
number, frequency, or dollar amount of transfers.
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 and interest sweep option dollar cost averaging programs
described under "Allocating your contributions" in "Contract features and
benefits" 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.
From time to time, we may remove the restrictions regarding transferring
amounts out of the guaranteed interest option. If we do so, we will tell you.
We will also tell you at least 45 days in advance of the day that we intend to
reimpose the transfer restrictions. When we reimpose the transfer restrictions,
if any dollar cost averaging transfer out of the guaranteed interest option
causes a violation of the 25% outbound restriction, that dollar cost averaging
program will be terminated for the current contract year. A new dollar cost
averaging program can be started in the next or subsequent contract years.
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.
Transferring your money among investment options 31
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; your rebalancing allocations will not be changed, and
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 any
dollar cost or 12 month dollar cost averaging program. Rebalancing is not
available for amounts you have allocated to the guaranteed interest option or
the fixed maturity options.
32 Transferring your money among 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. 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. In addition, we have the right to pay the cash
value and terminate this contract if no contributions are made during the last
three completed contract years, and the account value is less than $500, or if
you make a withdrawal that would result in a cash value of less than $500. See
"Surrendering your contract to receive its cash value" below. For the tax
consequences of withdrawals, see "Tax information" later in this Prospectus and
in the SAI.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus and "How withdrawals (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum income
benefit, Guaranteed minimum death benefit and Guaranteed principal benefit
option 2" below for more information on how withdrawals affect your guaranteed
benefits and could potentially cause your contract to terminate.
- --------------------------------------------------------------------------------
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
Inherited IRA Yes No No **
- --------------------------------------------------------------------------------
* 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.
** This contract pays out post-death required minimum distributions. See
"Inherited beneficiary contract" in "Contracts, features and benefits"
earlier in this prospectus.
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.
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 Rollover IRA and Roth Conversion 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. This option is not available if you have elected a guaranteed principal
benefit.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All Rollover IRA and Roth Conversion IRA contracts)
We offer our "substantially equal withdrawals option" to allow you to receive
distributions from your account value without triggering the 10% additional
federal income tax penalty, which normally applies to distributions made before
age 59-1/2. See "Tax information" later in this Prospectus and in the SAI. This
is not the exclusive method of meeting this exception. After consultation with
your tax advisor, you may decide to use another method which would require you
to compute amounts yourself and request lump sum withdrawals. 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.
The IRS has recently issued guidance permitting an individual who had elected
to receive substantially equal withdrawals to change, without penalty, from one
of the IRS-approved methods of calculating fixed
Accessing your money 33
payments to another IRS-approved method (similar to the required minimum
distribution rules) of calculating payments which vary each year.
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 using the IRS-approved method 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 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. This option is not available if
you have elected a guaranteed principal benefit.
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 our "automatic required minimum distribution (RMD) service" to help
you meet lifetime required minimum distributions under federal income tax
rules. This is not the exclusive way for you to meet these rules. After
consultation with your tax adviser, you may decide to compute required minimum
distributions yourself and request lump sum withdrawals.
You may elect this service in the year in which you reach age 70-1/2. The
minimum amount we will pay out is $250. Currently, minimum distribution
withdrawal payments will be made annually. See "Required minimum distributions"
in "Tax information" later in this Prospectus and in the SAI for your specific
type of retirement arrangement.
Under Rollover TSA contracts, you may not elect our automatic RMD service if a
loan is outstanding.
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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).
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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 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 (other than the Special 10 year fixed
maturity option) in the order of the earliest maturity date(s) first. If such
amounts are still insufficient, we will deduct any remaining portion from the
Special 10 year fixed maturity option. If the contract is surrendered or
annuitized or a death benefit is paid, we will deduct a pro rata portion of the
charge for that year. A market value adjustment will apply to withdrawals from
the fixed maturity options (including the Special 10 year fixed maturity
option).
HOW WITHDRAWALS (AND TRANSFERS OUT OF THE SPECIAL 10 YEAR FIXED MATURITY
OPTION) AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT, GUARANTEED MINIMUM DEATH
BENEFIT AND GUARANTEED PRINCIPAL BENEFIT OPTION 2
In general, withdrawals will reduce your guaranteed benefits 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 the 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
benefit was $40,000 before the withdrawal, it would be reduced by $16,000
($40,000 X .40) and your new benefit after the withdrawal would be $24,000
($40,000 - $16,000).
Transfers out of the Special 10 year fixed maturity option will reduce the GPB
Option 2 amount on a pro rata basis. In addition, if you make a contract
withdrawal from the Special 10 year fixed maturity option, we will reduce your
GPB Option 2 in a similar manner; however, the reduction will reflect both a
transfer out of the Special 10 year fixed maturity option and a withdrawal from
the contract. Therefore, the reduction in the GPB Option 2 is greater when you
take a contract withdrawal from the Special 10 year fixed maturity option than
it would be if you took the withdrawal from another investment option.
Similar to the example above, if your account value is $30,000 and you withdraw
$12,000 from the Special 10 year fixed maturity option, you have withdrawn 40%
of your account value. If your GPB Option 2 benefit was $40,000 before the
withdrawal, the reduction to reflect the transfer out of the Special 10 year
fixed maturity option would equal $16,000 ($40,000 x .40). The amount used to
calculate the reduction to reflect the withdrawal from the contract is $24,000
($40,000 - $16,000). The reduction to reflect the withdrawal would equal $9,600
($24,000 x .40), and your new benefit after the withdrawal would be $14,400
($24,000 - $9,600).
With respect to the Guaranteed minimum income benefit, withdrawals will reduce
the 5% Roll up to age 85 benefit base on a dollar-for-dollar basis, as long as
the sum of withdrawals in a contract year is 5% or less of the 5% Roll up to
age 85 benefit base on the most recent contract date anniversary. Once a
withdrawal is taken that causes the sum of withdrawals in a contract year to
exceed 5% of the benefit base on the most recent anniversary, that entire
withdrawal and any subsequent withdrawals in that same contract year will
reduce the benefit base pro rata. Reduction on a dollar-for-dollar basis means
that your 5% Roll up to age 85 benefit base will be reduced by the dollar
amount of the withdrawal. The Annual Ratchet to age 85 benefit base will always
be reduced on a pro rata basis.
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
34 Accessing your money
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 enrolled in our "automatic required
minimum distribution (RMD) service."
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 (other than the Special 10 year fixed maturity option)
in the order of the earliest maturity date(s) first. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. A market value adjustment will apply to withdrawals from
the fixed maturity options (including the Special 10 year fixed maturity
option).
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 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, your choice of payout options are those that are available
under the Guaranteed minimum income benefit (see "Our Guaranteed minimum income
benefit option" in "Contract features and benefits" earlier in this
Prospectus).
Accessing your money 35
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Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
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Variable Immediate Annuity Life annuity
payout options (not available in New York)
Life annuity with period certain
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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.
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 Immediate Annuities may be funded through your choice of available
variable investment options investing in portfolios of EQ Advisors Trust. The
contract also offers a fixed income annuity payout option that can be elected
in combination with the variable annuity payout option. The amount of each
variable income 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 NQ and IRA Income Manager payout options provide guaranteed level
payments. 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 advisor. 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
36 Accessing your money
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 Pennsylvania and New York, the maturity date is related
to the contract issue date, as follows:
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New York Pennsylvania
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Maximum Maximum
annuitization annuitization
Issue age age Issue age age
- -------------------------------------------------------------------
0-80 90 0-75 85
81 91 76 86
82 92 77 87
83 93 78-80 88
84 94 81-85 90
85 95
- -------------------------------------------------------------------
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 37
5. Charges and expenses
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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 Guaranteed minimum
income benefit, if you elect this optional benefit.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
o On the first 10 contract date anniversaries -- a charge for GPB Option 2, 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.
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 (other than the Special 10 year
fixed maturity option) in the order of the earliest maturity date(s) first. If
such amounts are still insufficient, we will deduct any remaining portion from
the Special 10 year fixed maturity option. If the contract is surrendered or
annuitized or a death benefit is paid, we will deduct a pro rata portion of the
charge for that year. A market value adjustment will apply to deductions from
the fixed maturity options (including the Special 10 year fixed maturity
option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
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 for which it is in effect. The charge is equal to
0.25% of the Annual Ratchet to age 85 benefit base.
Greater of 5% 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
38 Charges and expenses
account value on each contract date anniversary for which it is in effect. The
charge is equal to 0.50% of the greater of the 5% Roll up to age 85 or the
Annual Ratchet to age 85 benefit base.
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 (other than the Special 10 year fixed maturity option) in the
order of the earliest maturity date(s) first. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. If the contract is surrendered or annuitized or a death
benefit is paid, we will deduct a pro rata portion of the charge for that year.
A market value adjustment will apply to deductions from the fixed maturity
options (including the Special 10 year fixed maturity option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
There is no additional charge for the standard death benefit.
GUARANTEED PRINCIPAL BENEFIT OPTION 2
If you purchase GPB Option 2, we deduct a charge annually from your account
value on the first 10 contract date anniversaries. The charge is equal to 0.50%
of the account value. We will deduct this charge from your value in the
variable investment options and the guaranteed interest option on a pro rata
basis. If these amounts are insufficient, we will deduct any remaining portion
of the charge from amounts in any fixed maturity options (other than the
Special 10 year fixed maturity option) in the order of the earliest maturity
date(s) first. If such amounts are still insufficient, we will deduct any
remaining portion from the Special 10 year fixed maturity option. If the
contract is surrendered or annuitized or a death benefit is paid, we will
deduct a pro rata portion of the charge for that year. A market value
adjustment will apply to deductions from the fixed maturity options (including
the Special 10 year fixed maturity option).
GUARANTEED MINIMUM INCOME BENEFIT CHARGE
If you elect the Guaranteed minimum income 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 0.55% 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
still 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. If
the contract is surrendered or annuitized or a death benefit is paid, we will
deduct a pro rata portion of the charge for that year. A market value
adjustment will apply to deductions from the fixed maturity options.
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
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 (other than the Special 10 year fixed maturity option) in the
order of the earliest maturity date(s) first. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. If the contract is surrendered or annuitized or a death
benefit is paid, we will deduct a pro rata portion of the charge for that year.
A market value adjustment will apply to deductions from the fixed maturity
options (including the Special 10 year fixed maturity option).
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 jurisdiction and ranges from 0% to 3.5%.
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 0.10% 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
Charges and expenses 39
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.
40 Charges and expenses
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
surviving spouse, who is the sole primary beneficiary, of the deceased
owner/annuitant can choose to be treated as the successor owner/annuitant and
continue the contract. The Successor owner/ annuitant feature is only
available under NQ and individually owned IRA (other than Inherited IRAs)
contracts. See "Inherited IRA beneficiary continuation contract" in "Contracts
features and benefits," earlier in this Prospectus.
For NQ and all types of 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. An eligible successor owner,
including a surviving joint owner after the first owner dies, may elect the
beneficiary continuation option for NQ contracts discussed in "Beneficiary
continuation option" below.
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. The successor owner/annuitant must be 85 or younger as of the
date of the non-surviving spouse's death.
Payment of death benefit 41
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 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.
We will determine whether your applicable Guaranteed minimum death benefit
option will continue as follows:
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was
age 84 or younger at death, the guaranteed minimum death benefit continues
based upon the option that was elected by the original owner/annuitant and
will continue to grow according to its terms until the contract date
anniversary following the date the successor owner/annuitant reaches age
85.
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was
age 85 or older at death, we will reinstate the Guaranteed minimum death
benefit that was elected by the original owner/annuitant. The benefit will
continue to grow according to its terms until the contract date anniversary
following the date the successor owner/annuitant reaches age 85.
o If the successor owner/annuitant is age 76 or over on the date of the
original owner/annuitant's death, the Guaranteed minimum death benefit
will no longer grow, and we will no longer charge for the benefit.
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.
For information on the operation of this feature with the Guaranteed minimum
income benefit, see "Exercise of Guaranteed minimum income benefit" under "Our
Guaranteed minimum income benefit option" in "Contract features and benefits,"
earlier in this Prospectus. For information on the operation of this feature
with Protection Plus, see "Protection Plus" in "Guaranteed minimum death
benefit "under "Contract features and benefits," earlier in this Prospectus.
SPOUSAL PROTECTION
SPOUSAL PROTECTION OPTION FOR NQ CONTRACTS ONLY. This feature permits spouses
who are joint contract owners to increase the account value to equal the
guaranteed minimum death benefit, if higher, and by the value of any Protection
Plus benefit, if elected, upon the death of either spouse. This account value
"step up" occurs even if the surviving spouse was the named annuitant. If you
and your spouse jointly own the contract and one of you is the named annuitant,
you may elect the Spousal protection option at the time you purchase your
contract at no additional charge. Both spouses must be between the ages of 20
and 70 at the time the contract is issued and must each be named the primary
beneficiary in the event of the other's death.
The annuitant's age is generally used for the purpose of determining contract
benefits. However, for the Annual Ratchet to age 85 and the Greater of 5% Roll
up to age 85 or Annual Ratchet to age 85 guaranteed minimum death benefits and
the Protection Plus benefit, the benefit is based on the older spouse's age.
The older spouse may or may not be the annuitant.
If the annuitant dies prior to annuitization, the surviving spouse may elect to
receive the death benefit, including the value of the Protection Plus benefit,
or, if eligible, continue the contract as the sole owner/ annuitant by
electing the successor owner/annuitant option. If the non-annuitant spouse dies
prior to annuitization, the surviving spouse continues the contract
automatically as the sole owner/annuitant. In either case, the contract would
continue, as follows:
o As of the date we receive due proof of the spouse's death, the account value
will be re-set to equal the Guaranteed minimum death benefit as of the
date of the non-surviving spouse's death, if higher, increased by the
value of the Protection Plus benefit.
o The Guaranteed minimum death benefit continues to be based on the older
spouse's age for the life of the contract, even if the younger spouse is
originally or becomes the sole owner/annuitant.
o The Protection Plus benefit will now be based on the surviving spouse's age
at the date of the non-surviving spouse's death for the remainder of the
life of the contract. If the benefit had been previously frozen because
the older spouse had attained age 80, it will be reinstated if the
surviving spouse is age 75 or younger. The benefit is then frozen on the
contract date anniversary after the surviving spouse reaches age 80. If
the surviving spouse is age 76 or older, the benefit will be discontinued
even if the surviving spouse is the older spouse (upon whose age the
benefit was originally based).
We will not allow Spousal protection to be added after contract issue. If there
is a change in owner or primary beneficiary, the Spousal protection benefit
will be terminated. If you divorce but do not change the owner or primary
beneficiary, Spousal protection continues.
BENEFICIARY CONTINUATION OPTION
This feature permits a designated individual, on the contract owner's death, to
maintain a contract in the deceased contract owner's name and receive
distributions under the contract, instead of receiving the death benefit in a
single sum. We make this option available to beneficiaries under traditional
IRA, Roth IRA and NQ contracts, subject to state availability. Please speak
with your financial professional for further information.
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA AND ROTH IRA CONTRACTS
ONLY. The beneficiary continuation option must be elected by September 30th of
the year following the calendar year of your death and before any other
inconsistent election is made. Beneficiaries who do not make a timely election
will not be eligible for this option. If the election is made, then, as of the
date we receive satisfactory proof of death, any required instructions,
information and forms necessary to effect the beneficiary continuation option
feature, we will increase the
42 Payment of death benefit
account value to equal the applicable death benefit if such death benefit is
greater than such account value. Where an IRA contract is owned in a custodial
individual retirement account, the custodian may reinvest the death benefit in
an individual retirement annuity contract, using the account beneficiary as the
annuitant. Please speak with your financial professional for further
information.
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. For sole
spousal beneficiaries, payments may begin by December 31st of the calendar year
in which you would have reached age 70-1/2, if such time is later. For
traditional IRA contracts only, if you die before your Required Beginning Date
for Required Minimum Distributions, as discussed in the Statement of Additional
Information, the beneficiary may choose the "5-year rule" option instead of
annual payments over life expectancy. The 5-year rule is always available to
beneficiaries under Roth IRA contracts. If the beneficiary chooses this option,
the beneficiary may take withdrawals as desired, but the entire account value
must be fully withdrawn by December 31st of the calendar year which contains
the fifth anniversary of your death.
Under the beneficiary continuation option for IRA and Roth IRA contracts:
o The contract continues in your name for the benefit of your beneficiary.
o This feature is only available if the beneficiary is an individual. Certain
trusts with only individual beneficiaries will be treated as individuals
for this purpose.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the beneficiary's
own life expectancy, if payments over life expectancy are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the contract, they will no
longer be in effect and charges for such benefits will stop. Also, any
minimum death benefit feature will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value.
o Any partial withdrawal must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking required minimum distributions based
on the remaining life expectancy of the deceased beneficiary or to receive
any remaining interest in the contract in a lump sum. The option elected
will be processed when we receive satisfactory proof of death, any
required instructions for the method of payment and any required
information and forms necessary to effect payment.
BENEFICIARY CONTINUATION OPTION FOR NQ CONTRACTS ONLY. This feature, also known
as the Inherited annuity, may only be elected when the NQ contract owner dies
before the annuity commencement date, whether or not the owner and the
annuitant are the same person. If the owner and annuitant are different and the
owner dies before the annuitant, for purposes of this discussion, "beneficiary"
refers to the successor owner. For a discussion of successor owner, see "When
an NQ contract owner dies before the annuitant" earlier in this section. This
feature must be elected within 9 months following the date of your death and
before any other inconsistent election is made. Beneficiaries who do not make a
timely election will not be eligible for this option.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy, determined on a term certain basis and in the
year payments start. These payments must begin no later than one year after the
date of your death and are referred to as "scheduled payments." The beneficiary
may choose the "5-year rule" instead of scheduled payments over life
expectancy. If the beneficiary chooses the 5-year rule, there will be no
scheduled payments. Under the 5-year rule, the beneficiary may take withdrawals
as desired, but the entire account value must be fully withdrawn by the fifth
anniversary of your death.
Under the beneficiary continuation option for NQ contracts (regardless of
whether the owner and annuitant are the same person):
o This feature is only available if the beneficiary is an individual. It is
not available for any entity such as a trust, even if all of the
beneficiaries of the trust are individuals.
o The contract continues in your name for the benefit of your beneficiary.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the respective
beneficiary's own life expectancy, if scheduled payments are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the contract, they will no
longer be in effect and charges for such benefits will stop. Also, any
minimum death benefit feature will no longer be in effect.
o If the beneficiary chooses the "5-year rule," withdrawals may be made at
any time. If the beneficiary chooses scheduled payments, the beneficiary
must also choose between two potential withdrawal options at the time of
election. "Withdrawal Option 1" permits total surrender only. "Withdrawal
Option 2" permits the beneficiary to take withdrawals, in addition to
scheduled pay-
Payment of death benefit 43
ments, at any time. See "Taxation of nonqualified annuities" in "Tax
information" later in this Prospectus.
o Any partial withdrawals must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract on the beneficiary's death.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking scheduled payments based on the
remaining life expectancy of the deceased beneficiary (if scheduled
payments were chosen) or to receive any remaining interest in the contract
in a lump sum. We will pay any remaining interest in the contract in a
lump sum if your beneficiary elects the 5-year rule. The option elected
will be processed when we receive satisfactory proof of death, any
required instructions for the method of payment and any required
information and forms necessary to effect payment.
If you are both the owner and annuitant:
o As of the date we receive satisfactory proof of death, any required
instructions, information and forms necessary to effect the beneficiary
continuation option feature, we will increase the annuity account value to
equal the applicable death benefit if such death benefit is greater than
such account value.
If the owner and annuitant are not the same person:
o If the beneficiary continuation option is elected, the beneficiary
automatically becomes the new annuitant of the contract, replacing the
existing annuitant.
o The annuity account value will not be reset to the death benefit amount.
If a contract is jointly owned:
o The surviving owner supersedes any other named beneficiary and may elect
the beneficiary continuation option.
o If the deceased joint owner was also the annuitant, see "If you are both
the owner and annuitant" earlier in this section.
o If the deceased joint owner was not the annuitant, see "If the owner and
annuitant are not the same person" earlier in this section.
44 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 individual taxpayers. The tax rules can differ, depending on the
type of contract, whether NQ, traditional IRA, Roth IRA or 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
without notice. 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 or values under the contract, or payments under the contract,
for example, the amounts due to beneficiaries, may be subject to federal or
state gift, estate, or inheritance taxes. You should not rely only on this
document, but should consult your tax advisor 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, the Guaranteed minimum income benefit,
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. Although certain provisions of the
Temporary Regulations on required minimum distributions concerning the actuarial
value of additional contract benefits, which could have increased the amount
required to be distributed from annuity contracts funding qualified plans, TSAs
and IRAs have been suspended for 2003, these or similar provisions may apply in
future years. You may want to discuss with your tax advisor the potential
implication of these Regulations before you purchase this annuity contract or
purchase additional features under this annuity contract.
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.
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.
Tax information 45
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) 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 could 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. The IRS has not specifically addressed the tax treatment
of the Spousal protection benefit. Please consult with your tax advisor before
electing this feature.
BENEFICIARY CONTINUATION OPTION
We have received a Private Letter Ruling from the IRS regarding certain tax
consequences of scheduled payments under the beneficiary continuation option
for NQ contracts. See the discussion "Beneficiary continuation option for NQ
Contracts only" in "Payment of death benefit" earlier in this Prospectus. Among
other things, the IRS rules that:
o scheduled payments under the beneficiary continuation option for NQ contracts
satisfy the death of owner rules of Section 72(s)(2) of the Code,
regardless of whether the beneficiary elects Withdrawal Option 1 or
Withdrawal Option 2;
o scheduled payments, any additional withdrawals under Withdrawal Option 2, or
contract surrenders under Withdrawal Option 1 will only be taxable to the
beneficiary when amounts are actually paid, regardless of the Withdrawal
Option selected by the beneficiary;
o a beneficiary who irrevocably elects scheduled payments with Withdrawal
Option 1 will receive "excludable amount" tax treatment on scheduled
payments. See "Annuity payments" earlier in this section. If the
beneficiary elects to surrender the contract before all scheduled payments
are paid, the amount received upon surrender is a non-annuity payment
taxable to the extent it exceeds any remaining investment in the contract.
The Ruling specifically does not address the taxation of any payments received
by a beneficiary electing Withdrawal Option 2 (whether scheduled payments or
any withdrawal that might be taken). There is no assurance that we will receive
any further rulings addressing the tax consequences of payments under
Withdrawal Option 2. Before electing the beneficiary continuation option
feature, the individuals
46 Tax information
you designate as beneficiary or successor owner should discuss with their tax
advisors the consequences of such elections.
The tax treatment of a withdrawal after the death of the owner taken as a
single sum or taken as withdrawals under the 5-year rule is generally the same
as the tax treatment of a withdrawal from or surrender of 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, in accordance with IRS formulas.
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.
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, 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"). We also offer the Inherited IRA for payment of post-death
required minimum distributions in traditional IRA and Roth IRA. The SAI
contains the information that the IRS requires you to have before you purchase
an IRA. 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.
We have not applied for an opinion letter from the IRS to approve the
respective forms of the Equitable Accumulator(R) Select(SM) traditional and Roth
IRA contracts for use as a traditional and Roth IRA, respectively. We have
received IRS opinion letters approving the respective forms of a similar
traditional IRA and Roth IRA endorsement for use as a traditional and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a
Tax information 47
determination of the merits of the annuity as an investment. The contracts
submitted for IRS approval do not include every feature possibly available
under the Equitable Accumulator(R) traditional and Roth IRA contracts.
The Inherited IRA beneficiary continuation contract has not been submitted to
the IRS for approval as to form for use as a traditional IRA or Roth IRA.
Equitable intends to submit both traditional and Roth IRA versions of the
contract for formal approval, respectively. However, it is not clear whether
and when such approval may be received.
PROTECTION PLUS(SM) FEATURE
The Protection Plus feature is offered for IRA contracts, subject to state and
contract availability. We have received IRS Opinion Letters that the contract
with a similar Protection Plus feature qualifies 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 contracts
submitted for IRS approval do not include every feature possibly available
under the Equitable Accumulator(R) traditional and Roth IRA contracts. You
should discuss with your tax advisor 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).
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 the taxable year for which the contribution is made is $3,000. The amounts
are the same for both 2003 and 2004. The maximum regular contribution for both
2003 and 2004 is increased to $3,500 if you are at least age 50 at any time
during the taxable year for which the contribution is made.
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 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.
Certain distributions from Roth IRAs may qualify for fully tax-free treatment.
These are 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.
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
48 Tax information
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 annuity 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 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, the IRS has not
specifically addressed this question. 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 advisor 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 must establish your TSA with
funds that are directly transferred from another 403(b) arrangement or rolled
over from another 403(b) arrangement. You may make subsequent rollover
contributions to your Rollover TSA contract from these sources: qualified
plans, governmental 457(b) plans and traditional IRAs, as well as other TSAs
and 403(b) arrangements. 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 which 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
Tax information 49
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 accept
after-tax funds, we do not track your investment in the contract, if any. We
will report all distributions from this Rollover TSA as fully taxable. 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 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 $15,840 in periodic annuity payments in
2003, 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
50 Tax information
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 51
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
The 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.
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 and other aspects of its operations, appears in
the prospectuses for each Trust which accompany 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 14, 2003
and the related price per $100 of maturity value were as shown below:
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Fixed maturity options
with February 14th Rate to maturity
maturity date of as of Price per $100 of
maturity year February 14, 2003 maturity value
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2004 3.00%* $97.09
2005 3.00%* $94.25
2006 3.00%* $91.51
2007 3.00%* $88.84
2008 3.00%* $86.25
2009 3.11% $83.20
2010 3.49% $78.64
2011 3.76% $74.42
2012 3.96% $70.49
2013 4.19% $66.31
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* Since these rates to maturity are 3%, no amounts could have been allocated to
these 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.
52 More information
(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 for your FMO based on the rate
for a new FMO issued on the same date and having the same maturity
date as your FMO; if the same maturity date is not available for
new FMOs, we determine a rate that is between the rates for new
FMO maturities that immediately precede and immediately follow
your FMOs maturity date.
(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 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 option, the "current rate to maturity" will
be determined by using a widely-published Index. 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.
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. We may also treat contributions wired by certain
broker-dealers as received by us on the day we receive all the required
information, subject to receipt of the wired funds on the following business
day.
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
More information 53
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 or Rollover TSA contracts, nor is it
available with GPB Option 2.
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.
o For the fixed-dollar option and the interest sweep option, the first monthly
transfer will occur on the last business day of the month following the
month that we receive your election form at our processing office.
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.
The Trusts sell their shares to Equitable Life separate accounts in connection
with Equitable Life's variable annuity and/or life insurance
54 More information
products, and to separate accounts of insurance companies, both affiliated and
unaffiliated with Equitable Life. EQ Advisors Trust and AXA Premier VIP Trust
also sell their shares to the trustee of a qualified plan for Equitable Life.
We currently do not foresee any disadvantages to our policyowners arising out
of these arrangements. However, the Board of Trustees or Directors of each
Trust intends to monitor events 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 Board's response insufficiently protects our
policyowners, we will see to it that appropriate action is taken to do so.
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, 2002
and 2001, and for the three years ended December 31, 2002 incorporated in this
prospectus by reference to the 2002 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.
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 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 highest optional enhanced death benefit charge, the optional charge for
Guaranteed principal benefit option 2, the optional 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 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 this table,
of $.05 per $1,000.
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 are being
offered for the first time as of the date of this Prospectus.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology) and the AXA Premier VIP High Yield, AXA Premier VIP
Aggressive Equity and AXA Moderate Allocation portfolios, 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/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.
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 FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2002:
Length of option period
---------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- --------------------------------------------------------------------------------------------------
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/Aggressive Stock *** (31.43)% (14.61)% (10.72)%
- --------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock *** (35.81)% ( 6.86)% ( 0.89)%
- --------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income *** -- -- --
- --------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities *** -- -- --
- --------------------------------------------------------------------------------------------------
EQ/Alliance International *** -- -- --
- --------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth (33.68)% -- (19.93)%
- --------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond *** -- -- --
- --------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (32.76)% ( 6.60)% ( 1.99)%
- --------------------------------------------------------------------------------------------------
EQ/Alliance Technology (43.15)% -- (39.53)%
- --------------------------------------------------------------------------------------------------
EQ/Balanced *** (15.61)% ( 0.07)% (13.86)%
- --------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value (16.49)% -- ( 1.54)%
- --------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible (29.04)% -- (21.76)%
- --------------------------------------------------------------------------------------------------
EQ/Capital Guardian International (17.89)% -- (10.06)%
- --------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research (27.36)% -- ( 7.81)%
- --------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity (26.32)% -- ( 8.87)%
- --------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity ( 9.07)% ( 8.63)% ( 8.63)%
- --------------------------------------------------------------------------------------------------
EQ/Equity 500 Index *** (25.09)% ( 4.24)% 1.83%
- --------------------------------------------------------------------------------------------------
EQ/Evergreen Omega (26.76)% -- (14.79)%
- --------------------------------------------------------------------------------------------------
EQ/FI Mid Cap (21.27)% -- (16.59)%
- --------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value (17.55)% ( 6.46)% ( 4.67)%
- --------------------------------------------------------------------------------------------------
EQ/High Yield *** ( 6.02)% ( 7.50)% ( 3.43)%
- --------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond 6.23% -- 3.85%
- --------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth (32.84)% -- (31.71)%
- --------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value (16.74)% -- ( 0.75)%
- --------------------------------------------------------------------------------------------------
EQ/Marsico Focus (14.47)% -- ( 2.81)%
- --------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity (19.48)% 2.30% 4.67%
- --------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (36.79)% ( 6.78)% ( 2.81)%
- --------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (23.77)% -- (11.16)%
- --------------------------------------------------------------------------------------------------
EQ/Money Market *** ( 1.94)% 0.79% 1.02%
- --------------------------------------------------------------------------------------------------
EQ/Putnam Growth and Income Value (21.84)% ( 5.37)% ( 2.40)%
- --------------------------------------------------------------------------------------------------
EQ/Putnam International Equity (19.47)% ( 1.16)% 0.29%
- --------------------------------------------------------------------------------------------------
EQ/Putnam Voyager (28.94)% ( 7.10)% ( 2.73)%
- --------------------------------------------------------------------------------------------------
EQ/Small Company Index (23.66)% -- ( 4.89)%
- --------------------------------------------------------------------------------------------------
Length of portfolio period
--------------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond -- -- -- 4.82%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care -- -- -- (22.69)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Equity -- -- -- (23.58)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Equity -- -- -- (25.28)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Growth -- -- -- (33.75)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value -- -- -- (22.59)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Growth -- -- -- (39.53)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Value -- -- -- (27.97)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology -- -- -- (44.91)%
- -------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock *** (25.86)% (14.61)% (2.33)% 6.33%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock *** (23.16)% ( 6.86)% 4.78% 8.78%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income *** ( 8.63)% 0.64% -- 5.88%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities *** 5.12% 3.15% 2.66% 3.26%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance International *** (22.35)% ( 7.46)% -- ( 3.92)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth (27.84)% -- -- (19.93)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond *** 5.65% 3.17% -- 2.63%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (14.73)% ( 6.60)% -- ( 1.99)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology -- -- -- (39.53)%
- -------------------------------------------------------------------------------------------------------------
EQ/Balanced *** ( 8.78)% ( 0.07)% 2.82% 6.14%
- -------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value ( 7.59)% -- -- ( 1.54)%
- -------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible (18.30)% -- -- (14.95)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International (21.61)% -- -- (10.06)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research (10.97)% -- -- ( 7.81)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity (11.21)% -- -- ( 8.87)%
- -------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity (22.25)% ( 8.63)% -- (12.56)%
- -------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index *** (18.10)% ( 4.24)% -- 5.70%
- -------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega (20.89)% -- -- (14.79)%
- -------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap -- -- -- (16.80)%
- -------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value ( 5.45)% ( 6.46)% -- ( 2.92)%
- -------------------------------------------------------------------------------------------------------------
EQ/High Yield *** ( 7.05)% ( 7.50)% 2.12% 3.32%
- -------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond 6.33% -- -- 3.85%
- -------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth -- -- -- (31.87)%
- -------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value 3.11% -- -- ( 0.75)%
- -------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus -- -- -- ( 2.55)%
- -------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity ( 3.70)% 2.30% -- 4.67%
- -------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (32.62)% ( 6.78)% -- ( 2.81)%
- -------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (16.08)% -- -- (11.16)%
- -------------------------------------------------------------------------------------------------------------
EQ/Money Market *** 0.31% 0.79% 0.81% 2.90%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth and Income Value (10.08)% ( 5.37)% -- ( 2.40)%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity (20.08)% ( 1.16)% -- 0.29%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager (26.10)% ( 7.10)% -- ( 2.73)%
- -------------------------------------------------------------------------------------------------------------
EQ/Small Company Index (11.09)% -- -- ( 4.89)%
- -------------------------------------------------------------------------------------------------------------
* The variable investment option inception dates are: AXA Premier VIP
Aggressive Equity, AXA Premier VIP High Yield, EQ/Alliance Common Stock,
EQ/Money Market and EQ/Equity 500 Index (October 16, 1996); EQ/Alliance
Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth
Companies, 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/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); AXA Moderate
Allocation (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,
Investment performance 57
EQ/Alliance Growth and Income, EQ/Alliance International and EQ/Alliance
Quality Bond (January 14, 2002); EQ/Alliance Intermediate Government
Securities (April 1, 2002); AXA Rosenberg VIT Value Long/Short Equity and
U.S. Real Estate -- Class I (July 21, 2003); AXA Aggressive Allocation, AXA
Conservative Allocation, AXA Conservative-Plus Allocation, AXA Moderate-Plus
Allocation (July 31, 2003). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2001.
** The portfolio inception dates are: EQ/Alliance Common Stock (January 13,
1976); EQ/Money Market (July 13, 1981); AXA Moderate Allocation and AXA
Premier VIP Aggressive Equity (January 27, 1986); AXA Premier VIP High
Yield (January 2, 1987); 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/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/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/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); U.S. Real Estate -- Class I (May 3, 1997); AXA
Rosenberg VIT Long/Short Value Equity (May 2, 2003); AXA Aggressive
Allocation, AXA Conservative Allocation, AXA Conservative-Plus Allocation,
AXA Moderate-Plus Allocation (July 31, 2003). No performance information
is provided for portfolios and/or variable investment options with
inception dates after December 31, 2001.
*** In each case, the performance shown is for the indicated EQ Advisors Trust
portfolio and any predecessor that it may have had. The inception dates
for these portfolios 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.
58 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/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 AXA Premier VIP 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/Money Market, EQ/Alliance Quality Bond and AXA
Premier VIP 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 Guaranteed minimum income benefit
charge, the optional Protection Plus benefit charge, the optional Guaranteed
principal benefit option 2 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/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/Money Market Option, EQ/Alliance Quality Bond Option and
AXA Premier VIP High Yield Option" in the SAI.
Investment performance 59
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2002, 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).
60 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 1.70%.
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, 2002
- ------------------------------------------------------------------------------------------------------------------------------------
For the year ending December 31,
----------------------------------------------
2002
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.63
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 628
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.87
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 57
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.78
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 135
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.61
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 104
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier Large Cap Growth
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.76
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 408
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier Large Cap Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.88
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 316
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Growth
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.18
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 292
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.34
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 206
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 5.64
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 14
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 33.82
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 4
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $130.09
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 9
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 19.19
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 133
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 17.65
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 259
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance International
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.32
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 142
- ------------------------------------------------------------------------------------------------------------------------------------
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, 2002 (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
For the year ending December 31,
----------------------------------------------
2002
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.77
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 341
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $14.71
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 198
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.63
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 121
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 2.85
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 77
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Balanced
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $33.05
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 86
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.96
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 530
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.22
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 42
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.19
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 282
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.86
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 200
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U. S. Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.55
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 345
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 5.56
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 69
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $18.11
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 399
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 5.70
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 32
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.81
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 285
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.24
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 237
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/High Yield
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $21.48
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 125
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/International Equity Index
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 7.08
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 145
- ------------------------------------------------------------------------------------------------------------------------------------
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, 2002 (CONTINUED) For the year ending Decemb 2002
- ------------------------------------------------------------------------------------------------------------------------------------
For the year ending December 31,
----------------------------------------------
2002
- ------------------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 12.99
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 441
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 4.35
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 192
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.43
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 270
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.85
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 386
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 13.86
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 184
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.12
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 38
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 6.69
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 229
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Money Market
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 26.47
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 630
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.45
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 128
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 10.92
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 161
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 9.19
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 40
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Small Company Index
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 8.44
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 122
- ------------------------------------------------------------------------------------------------------------------------------------
Appendix I: Condensed financial information A-3
(This page intentionally left blank)
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 14, 2004 to a fixed maturity option with a maturity date of
February 14, 2013 (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 14, 2008.
- --------------------------------------------------------------------------------
Hypothetical assumed
rate to maturity on
February 14, 2008
----------------------
5.00% 9.00%
- --------------------------------------------------------------------------------
As of February 14, 2008 (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 14, 2008 (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
(This page intentionally left blank)
Appendix III: 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/Money Market, the
guaranteed interest option, the fixed maturity options or the Special 10 year
fixed maturity option), 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 5% Roll up to age 85 Annual Ratchet to age 85
year Account value enhanced death benefit enhanced death benefit
1 $105,000 $105,000 $105,000
2 $115,500 $110,250 $115,500
3 $129,360 $115,763 $129,360
4 $103,488 $121,551 $129,360
5 $113,837 $127,628 $129,360
6 $127,497 $134,010 $129,360
7 $127,497 $140,710 $129,360
- --------------------------------------------------------------------------------
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 85
(1) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(2) 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 5% 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 5% Roll up to age 85 or the Annual
Ratchet to age 85.*
* At the end of contract years 4 through 7, the death benefit will be the
enhanced death benefit. At the end of contract years 1, 2 and 3, the death
benefit will be the current account value.
Appendix III: Enhanced death benefit example C-1
(This page intentionally left blank)
Appendix IV: Hypothetical illustrations
- --------------------------------------------------------------------------------
ILLUSTRATION OF ACCOUNT VALUES, CASH VALUES AND CERTAIN GUARANTEED MINIMUM
BENEFITS
The following tables illustrate the changes in account value, cash value and
the values of the "greater of 5% Roll up to Age 85 or the Annual Ratchet to age
85" guaranteed minimum death benefit, the Protection Plus benefit and the
Guaranteed minimum income benefit under certain hypothetical circumstances for
an Accumulator(R) Select(SM) contract. The table illustrates the operation of a
contract based on a male, issue age 60, who makes a single $100,000
contribution and takes no withdrawals. The amounts shown are for the beginning
of each contract year and assume that all of the account value is invested in
portfolios that achieve investment returns at constant gross annual rates of 0%
and 6% (i.e., before any investment management fees, 12b-1 fees or other
expenses are deducted from the underlying portfolio assets). After the
deduction of the arithmetic average of the investment management fees, 12b-1
fees and other expenses of all of the underlying Portfolios (as described
below), the corresponding net annual rates of return would be (3.08)%, 2.92%
for the Accumulator(R) Select(SM) contract, at the 0% and 6% gross annual rates,
respectively. These net annual rates of return reflect the trust and separate
account level charges but they do not reflect the charges we deduct from your
account value annually for the optional Guaranteed minimum death benefit,
Protection Plus benefit and the Guaranteed minimum income benefit features, as
well as the annual administrative charge. If the net annual rates of return did
reflect these charges, the net annual rates of return would be lower; however,
the values shown in the following tables reflect all contract charges. The
values shown under "Lifetime annual guaranteed minimum income benefit" reflect
the lifetime income that would be guaranteed if the Guaranteed minimum income
benefit is selected at that contract anniversary. An "N/A" in these columns
indicates that the benefit is not exercisable in that year. A "0" under any of
the death benefit and/or "Lifetime annual guaranteed minimum income benefit"
columns indicates that the contract has terminated due to insufficient account
value and, consequently, the guaranteed benefit has no value.
With respect to fees and expenses deducted from assets of the underlying
portfolios, the amounts shown in all tables reflect (1) investment management
fees equivalent to an effective annual rate of 0.74%, and (2) an assumed
average asset charge for all other expenses of the underlying portfolios
equivalent to an effective annual rate of 0.39% and (3) 12b-1 fees equivalent
to an effective annual rate of 0.25%. These rates are the arithmetic average
for all portfolios that are available as investment options. In other words,
they are based on the hypothetical assumption that account values are allocated
equally among the variable investment options. The actual rates associated with
any contract will vary depending upon the actual allocation of policy values
among the investment options. These rates do not reflect expense limitation
arrangements in effect with respect to certain of the underlying portfolios as
described in the footnotes to the fee table for the underlying portfolios in
"Fee Table" earlier in this prospectus. With these arrangements, the charges
shown above would be lower. This would result in higher values than those shown
in the following tables.
Because your circumstances will no doubt differ from those in the illustrations
that follow, values under your contract will differ, in most cases
substantially. Upon request, we will furnish you with a personalized
illustration.
Appendix IV: Hypothetical illustrations D-1
Variable deferred annuity
Accumulator(R) Select(SM)
$100,000 Single contribution and no withdrawals
Male, issue age 60
Benefits:
Greater of 5% Roll up to age 85 and the Annual Ratchet to age 85 Guaranteed
minimum death benefit
Protection Plus
Guaranteed minimum income benefit
Greater of 5%
Roll up to age
85 and the
Annual Ratchet
to age 85
Guaranteed
minimum Total Death benefit
Account value Cash value death benefit with Protection Plus
------------------- ------------------- ----------------- --------------------
Age Contract year 0% 6% 0% 6% 0% 6% 0% 6%
- ----- -------------- --------- --------- --------- --------- ------- ------- -------- --------
60 1 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
61 2 95,508 101,487 95,508 101,487 105,000 105,000 107,000 107,000
62 3 91,113 102,958 91,113 102,958 110,250 110,250 114,350 114,350
63 4 86,810 104,409 86,810 104,409 115,763 115,763 122,068 122,068
64 5 82,591 105,836 82,591 105,836 121,551 121,551 130,171 130,171
65 6 78,452 107,237 78,452 107,237 127,628 127,628 138,679 138,679
66 7 74,386 108,607 74,386 108,607 134,010 134,010 147,613 147,613
67 8 70,387 109,942 70,387 109,942 140,710 140,710 156,994 156,994
68 9 66,450 111,238 66,450 111,238 147,746 147,746 166,844 166,844
69 10 62,569 112,489 62,569 112,489 155,133 155,133 177,186 177,186
74 15 43,740 117,901 43,740 117,901 197,993 197,993 237,190 237,190
79 20 25,364 121,307 25,364 121,307 252,695 252,695 313,773 313,773
84 25 6,774 121,678 6,774 121,678 322,510 322,510 388,642 388,642
89 30 0 127,291 0 127,291 338,635 338,635 0 404,767
94 35 0 135,734 0 135,734 338,635 338,635 0 404,767
95 36 0 137,556 0 137,556 338,635 338,635 0 404,767
Lifetime annual
guaranteed minimum income benefit
----------------------------------
Guaranteed Hypothetical
income income
----------------- ----------------
Age Contract year 0% 6% 0% 6%
- ----- -------------- -------- -------- -------- -------
60 1 N/A N/A N/A N/A
61 2 N/A N/A N/A N/A
62 3 N/A N/A N/A N/A
63 4 N/A N/A N/A N/A
64 5 N/A N/A N/A N/A
65 6 N/A N/A N/A N/A
66 7 N/A N/A N/A N/A
67 8 N/A N/A N/A N/A
68 9 N/A N/A N/A N/A
69 10 N/A N/A N/A N/A
74 15 12,493 12,493 12,493 12,493
79 20 17,032 17,032 17,032 17,032
84 25 27,736 27,736 27,736 27,736
89 30 N/A N/A N/A N/A
94 35 N/A N/A N/A N/A
95 36 N/A N/A N/A N/A
The hypothetical investment results are illustrative only and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown and will depend on a number of
factors, including investment allocations made by the owner. The account value,
cash value and guaranteed benefits for a contract would be different from the
ones shown if the actual gross rate of investment return averaged 0% or 6% over
a period of years, but also fluctuated above or below the average for
individual contract years. We can make no representation that these
hypothetical investment results can be achieved for any one year or continued
over any period of time. In fact, for any given period of time, the investment
results could be negative.
D-2 Appendix IV: Hypothetical illustrations
Appendix V: Guaranteed principal benefit example
- --------------------------------------------------------------------------------
For purposes of these examples, we assume that there is an initial contribution
of $100,000, made to the contract on February 14, 2003. We also assume that no
additional contributions, no transfers among options and no withdrawals from
the contract are made. For GPB Option 1, the example also assumes that a 10
year fixed maturity option is chosen. The hypothetical gross rates of return
with respect to amounts allocated to the variable investment options are 0%, 6%
and 10%. The numbers below reflect the deduction of all applicable separate
account and contract charges and also reflect the charge for GPB Option 2.
Also, for any given performance of your variable investment options, GPB Option
1 produces higher account values than GPB Option 2 unless investment
performance has been significantly positive. The examples should not be
considered a representation of past or future expenses. Similarly, the annual
rates of return assumed in the example are not an estimate or guarantee of
future investment performance.
- -------------------------------------------------------------------------------------------------------------------
Assuming 100%
in the variable
Assuming Under GPB Under GPB investment
100% in the FMO Option 1 Option 2 options
- -------------------------------------------------------------------------------------------------------------------
Amount allocated to FMO on February 14, 100,000 66.310 35,000 0
2003 based upon a 4.19% rate to maturity
- -------------------------------------------------------------------------------------------------------------------
Initial account value allocated to the variable 0 33,690 65,000 100,000
investment options on February 14, 2003
- -------------------------------------------------------------------------------------------------------------------
Account value in the fixed maturity option on 150,802 100,000 52,781 0
February 14, 2013
- -------------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 124,716 100,000* 73,363
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a 0%
gross annual rate of return)
- -------------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 145,057 133,015** 133,741
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a 6%
gross annual rate of return)
- -------------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 165,964 170,921** 195,798
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a
10% gross annual rate of return)
- -------------------------------------------------------------------------------------------------------------------
* Since the annuity account value is less than the alternate benefit under GPB
Option 2, the annuity account value is adjusted upward to the guaranteed
amount or an increase of $3,776 in this example.
** Since the annuity account value is greater than the alternate benefit under
GPB Option 2, GPB Option 2 will not affect the annuity account value.
Appendix V: Guaranteed principal benefit example E-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 15
Custodian and Independent Accountants 15
Yield Information for the EQ/Money Market Option, EQ/Alliance Quality Bond
Option and AXA Premier VIP High Yield Option 15
Distribution of the Contracts 17
Financial Statements 17
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 September 15, 2003.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
(SAI 4ACS(5/03))
X00565/Select '04 Series
Equitable Accumulator(R) Plus(SM)
A variable deferred annuity contract
PROSPECTUS DATED SEPTEMBER 15, 2003
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, prospectuses that contain important
information about the portfolios accompany this Prospectus.
- --------------------------------------------------------------------------------
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 contracts or all states.
- --------------------------------------------------------------------------------
Variable investment options
- --------------------------------------------------------------------------------
o AXA Aggressive Allocation* o EQ/Alliance Quality Bond
o AXA Conservative Allocation* o EQ/Alliance Small Cap Growth
o AXA Conservative-Plus Allocation* o EQ/Alliance Technology
o AXA Moderate Allocation* o EQ/Bernstein Diversified Value
o AXA Moderate-Plus Allocation* o EQ/Calvert Socially Responsible
o AXA Premier VIP Aggressive Equity o EQ/Capital Guardian International
o AXA Premier VIP Core Bond o EQ/Capital Guardian Research
o AXA Premier VIP Health Care o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP High Yield o EQ/Emerging Markets Equity
o AXA Premier VIP International Equity o EQ/Equity 500 Index
o AXA Premier VIP Large Cap Core o EQ/Evergreen Omega
Equity o EQ/FI Mid Cap
o AXA Premier VIP Large Cap Growth o EQ/FI Small/Mid Cap Value
o AXA Premier VIP Large Cap Value o EQ/J.P. Morgan Core Bond
o AXA Premier VIP Small/Mid Cap o EQ/Janus Large Cap Growth
Growth o EQ/Lazard Small Cap Value
o AXA Premier VIP Small/Mid Cap Value o EQ/Marsico Focus
o AXA Premier VIP Technology o EQ/Mercury Basic Value Equity
o AXA Rosenberg VIT Value Long/Short o EQ/MFS Emerging Growth Companies
Equity o EQ/MFS Investors Trust
o EQ/Alliance Common Stock o EQ/Money Market
o EQ/Alliance Growth and Income o EQ/Putnam Growth & Income Value
o EQ/Alliance Intermediate Government o EQ/Putnam International Equity
Securities o EQ/Putnam Voyager
o EQ/Alliance International o EQ/Small Company Index
o EQ/Alliance Premier Growth o U.S. Real Estate -- Class I
- --------------------------------------------------------------------------------
* The "AXA Allocation" portfolios.
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, AXA Premier VIP Trust, The Universal
Institutional Funds, Inc. or Barr Rosenberg Variable Insurance 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 September 15, 2003, 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.
X00564/Plus '04 Series
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 11
- --------------------------------------------------------------------------------
Example 13
- --------------------------------------------------------------------------------
1. CONTRACT FEATURES AND BENEFITS 14
- --------------------------------------------------------------------------------
How you can purchase and contribute to your contract 14
Owner and annuitant requirements 16
How you can make your contributions 16
What are your investment options under the contract? 16
Allocating your contributions 22
Credits 24
Your benefit base 25
Annuity purchase factors 26
Our Guaranteed minimum income benefit option 26
Guaranteed minimum death benefit 27
Your right to cancel within a certain number of days 28
- --------------------------------------------------------------------------------
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 guaranteed interest option 30
Your contract's value in the fixed maturity options 30
Termination of your contract 30
- --------------------------------------------------------------------------------
3. TRANSFERRING YOUR MONEY AMONG THE INVESTMENT OPTIONS 31
- --------------------------------------------------------------------------------
Transferring your account value 31
Disruptive transfer activity 31
Rebalancing your account value 31
- --------------------------------------------------------------------------------
"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 33
- --------------------------------------------------------------------------------
Withdrawing your account value 33
How withdrawals are taken from your account value 34
How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income
benefit, Guaranteed minimum death benefit and
Guaranteed principal benefit option 2 34
Loans under Rollover TSA contracts 35
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
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 38
Charges that the Trusts deduct 40
Group or sponsored arrangements 40
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
- --------------------------------------------------------------------------------
7. TAX INFORMATION 46
- --------------------------------------------------------------------------------
Overview 46
Buying a contract to fund a retirement arrangement 46
Transfers among variable investment options 46
Taxation of nonqualified annuities 46
Individual retirement arrangements (IRAs) 48
Special rules for contracts funding qualified plans 50
Tax-Sheltered Annuity contracts (TSAs) 50
Federal and state income tax withholding and information
reporting 51
Impact of taxes to Equitable Life 52
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8. MORE INFORMATION 53
- --------------------------------------------------------------------------------
About Separate Account No. 49 53
About the Trusts 53
About our fixed maturity options 53
About the general account 54
About other methods of payment 54
Dates and prices at which contract events occur 55
About your voting rights 55
About legal proceedings 56
About our independent accountants 56
Financial statements 56
Transfers of ownership, collateral assignments, loans
and borrowing 56
Distribution of the contracts 56
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9. INVESTMENT PERFORMANCE 57
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Communicating performance data 60
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10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 61
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I -- Purchase considerations for QP contracts A-1
II -- Market value adjustment example B-1
III -- Enhanced death benefit example C-1
IV -- Hypothetical illustrations D-1
V -- Guaranteed principal benefit example E-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 30
administrative charge 38
annual administrative charge 38
annual ratchet death benefit 28
annuitant 14
annuity maturity date 36
annuity payout options 35
annuity purchase factors 26
automatic investment program 55
beneficiary 42
Beneficiary continuation option ("BCO") 43
benefit base 25
business day 55
cash value 31
charges for state premium and other applicable taxes 40
contract date 9
contract date anniversary 9
contract year 9
contributions to traditional IRAs 49
regular contributions 49
rollovers and transfers 49
credit 24
disability, terminal illness or confinement to nursing home 39
disruptive transfer activity 31
distribution charge 38
EQAccess 6
ERISA 35
Fixed-dollar option 23
fixed maturity options 21
free look 28
free withdrawal amount 39
general account 54
General dollar cost averaging 23
guaranteed interest option 21
Guaranteed minimum death benefit 28
Guaranteed minimum income benefit 26
Guaranteed minimum income benefit charge 40
Guaranteed principal benefit 22
IRA cover
IRS 46
Investment simplifier 23
lifetime required minimum distribution withdrawals 33
loan reserve account 35
loans under Rollover TSA 33
lump sum withdrawals 32
market adjusted amount 21
market value adjustment 21
market timing 30
maturity dates 21
maturity value 21
Mortality and expense risk charge 38
NQ cover
participant 16
portfolio cover
processing office 6
Protection Plus 28
Protection Plus charge 40
QP cover
rate to maturity 21
Rebalancing 30
roll-up death benefit 25
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 48
SAI cover
SEC cover
self-directed allocation 22
Separate Account 49 53
Standard death benefit 25
substantially equal withdrawals 32
Successor owner and annuitant 42
Spousal protection 43
systematic withdrawals 32
TOPS 6
TSA cover
traditional IRA 48
Trusts cover
unit 30
variable investment options 16
wire transmittals 54
withdrawal charge 38
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
Guaranteed minimum death benefit Guaranteed death benefit
Guarantee minimum income benefit Guaranteed 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
$415.31 billion in assets as of December 31, 2002. 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
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
TRANSFERS, WITHDRAWALS, OR REQUIRED NOTICES) SENT BY
REGULAR MAIL:
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Equitable Accumulator(R) Plus(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) Plus(SM)
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, including notification of eligibility to exercise the guaranteed
minimum income benefit, if applicable.
- --------------------------------------------------------------------------------
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
(available only for contracts distributed through AXA Distributors);
(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;
6 Who is Equitable Life?
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(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;
(5) death claims; and
(6) general dollar cost averaging (including the fixed dollar and interest
sweep options)
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 (including the fixed dollar amount and interest sweep
options);
(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
- --------------------------------------------------------------------------------
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Professional investment Equitable Accumulator(R) Plus(SM) 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.
o Special 10 year fixed maturity option (available under Guaranteed principal benefit option 2 only).
----------------------------------------------------------------------------------------------------------
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. If you withdraw or transfer only a portion of a
fixed maturity amount, 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 also applies.
- ------------------------------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------
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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Guaranteed minimum The Guaranteed minimum income benefit provides income protection for you during the annuitant's life
income benefit once the owner elects to annuitize the contract.
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution amounts o Initial minimum: $10,000
o Additional minimum: $500 (NQ, QP and Rollover TSA contracts)
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
$50 (IRA contracts)
----------------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply. In general, contributions are limited to $1.5 million.
- ------------------------------------------------------------------------------------------------------------------------------------
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 5% 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
- ------------------------------------------------------------------------------------------------------------------------------------
8 Equitable Accumulator(R) Plus(SM) at a glance -- key features
- ------------------------------------------------------------------------------------------------------------------------------------
Additional features o Guaranteed minimum death benefit options
o Guaranteed principal 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
o Spousal protection
o Successor owner/annuitant Fees and charges
- ------------------------------------------------------------------------------------------------------------------------------------
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 1.50%.
o The charges for the Guaranteed minimum death benefits range from 0.0% to 0.50%, 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 0.55% of the applicable benefit base charge for the optional Guaranteed minimum income benefit,
until you exercise the benefit, elect another annuity payout or the contract date anniversary after the
annuitant reaches age 85, whichever occurs first.
o An annual charge for the optional Guaranteed principal benefit option 2 deducted on the first 10
contract date anniversaries equal to 0.50% of account value.
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 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% 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.
----------------------------------------------------------------------------------------------------------
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." For example, if your contract date is May 1, your contract
date anniversary is April 30.
----------------------------------------------------------------------------------------------------------
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 0.10% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses. In addition, each AXA Allocation Portfolio will invest
in shares of other Portfolios of the EQ Advisors Trust and AXA Premier VIP Trust (the "Underlying
Portfolios"). Therefore, each AXA Allocation Portfolio will, in addition to its own expenses such as
management fees, bear its pro rata share of the fees and expenses incurred by the Underlying Portfolios
and the investment return of each AXA Allocation Portfolio will be reduced by the Underlying Portfolio's
expenses. The anticipated range of expenses expected to be incurred in connection with each AXA
Allocation Portfolio's investments in Underlying Portfolios is set forth in the AXA Premier VIP Trust
prospectus.
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Equitable Accumulator(R) Plus(SM) at a glance -- key features 9
- ------------------------------------------------------------------------------------------------------------------------------------
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.
10 Equitable Accumulator(R) Plus(SM) at a glance -- key features
Fee table
- --------------------------------------------------------------------------------
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the contract. Each of the charges and expenses
is more fully described in "Charges and expenses" later in this Prospectus.
The first table describes fees and expenses that you will pay at the time you
surrender the contract or if you make certain withdrawals or apply your cash
value to certain payout options or if you purchase a Variable Immediate
Annuity. Charges designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state, may also apply. Charges for certain
features shown in the fee table are mutually exclusive.
- ------------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge as a percentage of contributions with-
drawn(1) (deducted if you surrender your contract, make certain
withdrawals, or apply your cash value to certain payout options). 8.00%
Charge if you elect a Variable Immediate Annuity payout option $ 350
- ------------------------------------------------------------------------------------------------------------------------------------
The next table describes the fees and expenses that you will pay periodically during the time that you own the contract, not
including the underly- ing trust portfolio fees and expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your variable investment options expressed as an annual percentage of daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks 0.90%(2)
Administrative 0.35%
Distribution 0.25%
-----
Total annual expenses 1.50%
- ------------------------------------------------------------------------------------------------------------------------------------
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(3) $ 30
If your account value on a contract date anniversary is $50,000
or more $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
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 for which the benefit is in effect.)
Standard death benefit 0.00%
Annual Ratchet to age 85 0.25% of the Annual Ratchet to age 85 benefit base
Greater of 5% Roll up to age 85 or Annual Ratchet to age 85 0.50% of the greater of the 5% Roll up to age 85 benefit
base or the Annual Ratchet to age 85 benefit base, as
applicable
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed principal benefit charge for option 2 (calculated as
a percentage of the account value. Deducted annually on the first 10
contract date anniversaries.) 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed minimum income benefit charge (calculated as a
percentage of the applicable benefit base. Deducted annually on each
contract date anniversary for which the benefit is in effect.) 0.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Protection Plus benefit charge (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary
for which the benefit is in effect.) 0.35%
- ------------------------------------------------------------------------------------------------------------------------------------
Net loan interest charge -- Rollover TSA contracts only (calcu-
lated and deducted daily as a percentage of the outstanding loan
amount) 2.00%(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Fee table 11
You also bear your proportionate share of all fees and expenses paid by a
"Portfolio" that corresponds to any variable investment option you are using.
This table shows the lowest and highest total operating expenses charged by any
of the Portfolios that you will pay periodically during the time that you own
the contract. These fees and expenses are reflected in the Portfolio's net
asset value each day. Therefore, they reduce the investment return of the
Portfolio and the related variable investment option. Actual fees and expenses
are likely to fluctuate from year to year. More detail concerning each
Portfolio's fees and expenses is contained in the Trust prospectus for the
Portfolio.
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio operating expenses expressed as an annual percentage of daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002 (expenses that are deducted Lowest Highest
from Portfolio assets including management fees, 12b-1 fees, service fees, and/or
other expenses)(5) 0.57% 3.77%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal
amount, if applicable.
The withdrawal charge percentage we use is determined by the contract year Contract
in which you make the withdrawal or surrender your contract. For each Year
contribution, we consider the contract year in which we receive that
contribution to be "contract year 1") 1 8.00%
2 8.00%
3 7.00%
4 7.00%
5 6.00%
6 5.00%
7 4.00%
8 3.00%
9+ 0.00%
(2) 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.
(3) During the first two contract years this charge, if it applies, is equal to
the lesser of $30 or 2% of your account value. Thereafter, the charge is
$30 for each contract year.
(4) We charge interest on loans under Rollover TSA contracts but also credit
you interest on your loan reserve account. Our net loan interest charge is
determined by the excess between the interrest rate we charge over the
interest rate we credit. See "Loans under Rollover TSA contracts" later in
this Prospectus for more information on how the loan interest is calculated
and for restrictions that may apply.
(5) Equitable Life, the manager of AXA Premier VIP Trust and EQ Advisors Trust,
has entered into Expense Limitation Agreements with respect to certain
Portfolios, which are effective through April 30, 2004. Under these
agreements Equitable Life has agreed to waive or limit its fees and assume
other expenses of certain Portfolios, if necessary, in an amount that
limits each affected Portfolio's total Annual Expenses (exclusive of
interest, taxes, brokerage commissions, capitalized expenditures and
extraordinary expenses) to not more than specified amounts. Morgan Stanley
Investment Management Inc., which does business in certain instances as
"Van Kampen," is the manager of The Universal Institutional Funds, Inc. --
U.S. Real Estate Portfolio -- Class I and has voluntarily agreed to reduce
its management fee and/or reimburse the Portfolio so that total annual
operating expenses of the Portfolio (exclusive of investment related
expenses, such as foreign country tax expense and interest expense on
amounts borrowed) are not more than specified amounts. Van Kampen reserves
the right to terminate any waiver and/or reimbursement at any time without
notice. AXA Rosenberg Investment Management LLC, the manager of the Barr
Rosenberg Variable Insurance Trust -- AXA Rosenberg VIT Value Long/Short
Equity Fund, has voluntarily agreed to reimburse expenses in excess of
specified amounts. See the prospectus for each applicable underlying Trust
for more information about the arrangements. See the Prospectus for each
applicable underlying Trust for more information about the arrangements. In
addition, a portion of the brokerage commissions each EQ Advisors Trust
Portfolio and each AXA Premier VIP Trust Portfolio pays is used to reduce
the Portfolio's expenses. If the above table reflected these expense
limitation arrangements and the portion of the brokerage commissions used
to reduce portfolio expenses, the lowest and highest figures would be as
shown in the table below (based on estimated amounts for the current fiscal
year, since initial seed capital was invested for the portfolio
representing the "Lowest" figure on July 31, 2003 and for the portfolio
representing the "Highest" figure on May 2, 2003):
- --------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002
(expenses that are deducted from Portfolio assets includ- Lowest Highest
ing management fees, 12b-1 fees, service fees, and/or ------ -------
other expenses) after expense cap 0.35% 2.00%
- --------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002
(expenses that are deducted from Portfolio assets includ-
ing management fees, 12b-1 fees, service fees, and/or 0.35% 2.00%
other expenses) after expense cap and after a portion of
the brokerage commissions that the Portfolio pays is
used to reduce the Portfolio's expenses
- --------------------------------------------------------------------------------
12 Fee table
EXAMPLE
This example is intended to help you compare the cost of investing in the
contract with the cost of investing in other variable annuity contracts. These
costs include contract owner transaction expenses, contract fees, separate
account annual expenses, and underlying trust fees and expenses.
The example below shows the expenses that a hypothetical contract owner (who
has elected the Guaranteed minimum income benefit with the enhanced death
benefit that provides for the greater of the 5% Roll up to age 85 or the Annual
Ratchet to age 85 and Protection Plus) would pay in the situations illustrated.
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 $1.30 per $10,000.
The fixed maturity options and guaranteed interest option are not covered by
the examples. However, the annual administrative charge, the withdrawal charge,
the charge for any optional benefits and the charge if you elect a Variable
Immediate Annuity payout option do apply to the fixed maturity options and
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.
This 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 example is not an
estimate or guarantee of future investment performance.
The example assumes that you invest $10,000 in the contract for the time
periods indicated. The Example also assumes that your investment has a 5%
return each year and assumes the highest and lowest fees and expenses of any of
the underlying trust portfolios. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:
If you surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 1,177.52 $ 1,857.04 $ 2,575.15 $ 4,202.07
Highest $ 1,525.29 $ 2,856.06 $ 4,160.79 $ 6,961.82
If you annuitize at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 727.52 $ 1,507.04 $ 2,325.15 $ 4,552.07
Highest $ 1,075.29 $ 2,506.06 $ 3,910.79 $ 7,311.82
If you do not surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 377.52 $ 1,157.04 $ 1,975.15 $ 4.202.07
Highest $ 725.29 $ 2,156.06 $ 3,560.79 $ 6,961.82
Fee table 13
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 for NQ, QP and Rollover TSA contracts and $50 each for IRA contracts,
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.
We may refuse to accept any contribution if the sum of all contributions under
all Equitable Accumulator(R) series contracts with the same owner or 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 with the
same owner or annuitant would then total more than $2,500,000.
- --------------------------------------------------------------------------------
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, o Contributions after age 70-1/2 must be net of
qualified plans, and governmental EDC required minimum distributions.
plans. o Although we accept regular IRA contribu-
o Rollovers from another traditional indi- tions (limited to $3,000 for each of the
vidual retirement arrangement. calendar years 2003 and 2004) under
o Direct custodian-to-custodian transfers Rollover IRA contracts, we intend that this
from another traditional individual retire- contract be used primarily for rollover and
ment arrangement. direct transfer contributions.
o Regular IRA contributions. o Additional catch-up contributions of up to
o Additional "catch-up" contributions. $500 can be made for the calendar year
2003 or 2004 where the owner is at least
age 50 but under age 70-1/2 at any time dur-
ing the calendar year for which the
contribution is made.
- ------------------------------------------------------------------------------------------------------------------------------------
14 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Available
for annuitant Limitations on
Contract type issue ages Source of contributions contributions+
- -------------------------------------------------------------------------------------------------------------------------------
Roth Conversion IRA 20 through 80 o Rollovers from another Roth IRA. o No additional rollover or direct transfer con-
o Conversion rollovers from a traditional IRA. tributions after age 81.*
o Direct transfers from another Roth IRA. o Conversion rollovers after age 70-1/2 must be
o Regular Roth IRA contributions. net of required minimum distributions for the
o Additional catch-up contributions. 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 contri-
butions (limited to $3,000 for each of
calendar years 2003 and 2004) under the
Roth IRA contracts, we intend that this con-
tract be used primarily for rollover and direct
transfer contributions.
o Additional catch-up contributions of up to
$500 can be made for the calendar year
2003 or 2004 where the owner is at least
age 50 at any time during the calendar year
for which the contribution is made.
- -------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 80 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 81.*
Section 403(b) of the Internal Revenue o Rollover or direct transfer contributions after
Code, complying with IRS Revenue Ruling age 70-1/2 must be net of any required mini-
90-24. mum distributions.
o Eligible rollover distributions of pre-tax o Employer-remitted contributions are not
funds from other 403(b) plans. Subsequent permitted.
contributions may also be rollovers from
qualified plans, governmental EDC plans
and traditional IRAs.
This contract may not be available in your state.
- ------------------------------------------------------------------------------------------------------------------------------------
QP 20 through 70 o Only transfer contributions from an existing o Regular ongoing payroll contributions are
defined contribution qualified plan trust. not permitted.
o The plan must be qualified under Section o Only one additional transfer contribution
401(a) of the Internal Revenue Code. may be made during a contract year.
o For 401(k) plans, transferred contributions o No additional transfer contributions after
may only include employee pre-tax age 71.
contributions. o A separate QP contract must be established
for each plan participant.
o Employer-remitted contributions are not
permitted.
- ------------------------------------------------------------------------------------------------------------------------------------
See Appendix I at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
+ If you purchase Guaranteed principal benefit option 2, no contributions are
permitted after the six month period beginning on the contract date.
* For Pennsylvania, the following contribution limitations apply:
Maximum
Issue age contribution age
0-75 77
76 78
77 79
78-80 80
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. 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 15
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. In general we
will not permit a contract to be owned by a minor unless it is pursuant to the
Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act in your
state. If the Spousal protection feature is elected, the spouses must be joint
owners, one of the spouses must be the annuitant and both must be named as the
only primary beneficiaries.
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/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.
- --------------------------------------------------------------------------------
16 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)
Plus(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.
Equitable Life serves as the investment manager of the Portfolios of the EQ
Advisors Trust and the AXA Premier VIP Trust. 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. The
advisers for these Portfolios, listed in the chart below, are those who make the
investment decisions for each Portfolio. The chart also indicates the investment
manager for each of the other Portfolios.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA AGGRESSIVE ALLOCATION Seeks long-term capital appreciation. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE ALLOCATION Seeks a high level of current income. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE-PLUS Seeks current income and growth of capital, with a o Equitable Life
ALLOCATION greater emphasis on current income.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA MODERATE ALLOCATION Seeks long-term capital appreciation and current income. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA MODERATE-PLUS Seeks long-term capital appreciation and current income, o Equitable Life
ALLOCATION with a greater emphasis on capital appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP AGGRESSIVE Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
EQUITY o MFS Investment Management
o Marsico Capital Management, LLC
o Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP CORE BOND Seeks a balance of a high current income and capital o BlackRock Advisors, Inc.
appreciation, consistent with a prudent level of risk. o Pacific Investment Management Company
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HEALTH CARE Seeks long-term growth of capital. o A I M Capital Management, Inc.
o Dresdner RCM Global Investors LLC
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HIGH YIELD Seeks to achieve a high total return through a combina- o Alliance Capital Management L.P.
tion of current income and capital appreciation. o Pacific Investment Management Company
LLC (PIMCO)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP Seeks long-term growth of capital. o Alliance Capital Management L.P., through
INTERNATIONAL EQUITY its Bernstein Investment Research and
Management Unit
o Bank of Ireland Asset Management
(U.S.) Limited
o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 17
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust:
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P., through
CORE EQUITY its Bernstein Investment Research and
Management Unit
o Janus Capital Management LLC
o Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
GROWTH o Dresdner RCM Global Investors LLC
o TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
VALUE o Institutional Capital Corporation
o MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o Alliance Capital Management L.P.
CAP GROWTH o Franklin Advisers, Inc.
o Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o AXA Rosenberg Investment Management LLC
CAP VALUE o TCW Investment Management Company
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TECHNOLOGY Seeks long-term growth of capital. o Alliance Capital Management L.P.
o Dresdner RCM Global Investors LLC
o Firsthand Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE COMMON STOCK Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH AND Seeks to provide a high total return. o Alliance Capital Management L.P.
INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERMEDIATE Seeks to achieve high current income consistent with o Alliance Capital Management L.P.
GOVERNMENT SECURITIES relative stability of principal.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERNATIONAL Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH To achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE QUALITY BOND Seeks to achieve high current income consistent with o Alliance Capital Management L.P.
moderate risk to capital.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE SMALL CAP Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY Seeks to achieve long-term growth of capital. Current o Alliance Capital Management L.P.
income is incidental to the Portfolio's objective.
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BERNSTEIN DIVERSIFIED Seeks capital appreciation. o Alliance Capital Management L.P.,
VALUE through its Bernstein Investment Research
and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY Seeks long-term capital appreciation. o Calvert Asset Management Company, Inc.
RESPONSIBLE and Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN U.S. To achieve long-term growth of capital. o Capital Guardian Trust Company
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EMERGING MARKETS EQUITY Seeks long-term capital appreciation. o Morgan Stanley Investment Management,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX Seeks a total return before expenses that approximates o 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. o Evergreen Investment Management
Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI MID CAP Seeks long-term growth of capital. o Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI SMALL/MID CAP VALUE Seeks long-term capital appreciation. o Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. MORGAN CORE BOND Seeks to provide a high total return consistent with mod- o 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. o Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/LAZARD SMALL CAP VALUE Seeks capital appreciation. o Lazard Asset Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MARSICO FOCUS Seeks long-term growth of capital. o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MERCURY BASIC VALUE Seeks capital appreciation and secondarily, income. o Mercury Advisors
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS EMERGING GROWTH Seeks to provide long-term capital growth. o MFS Investment Management
COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS INVESTORS TRUST Seeks long-term growth of capital with secondary objec- o MFS Investment Management
tive to seek reasonable current income.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MONEY MARKET Seeks to obtain a high level of current income, preserve o Alliance Capital Management L.P.
its assets and maintain liquidity.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME Seeks capital growth. Current income is a secondary o Putnam Investment Management, LLC
VALUE objective.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL Seeks capital appreciation. o Putnam Investment Management, LLC
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM VOYAGER Seeks long-term growth of capital and any increased o Putnam Investment Management, LLC
income that results from this growth.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/SMALL COMPANY INDEX Seeks to replicate as closely as possible (before the o Alliance Capital Management L.P.
deduction of Portfolio expenses) the total return of the
Russell 2000 Index.
- ------------------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg
Variable Insurance Trust
- ------------------------------------------------------------------------------------------------------------------------------------
Investment
Portfolio Name Objective Manager
- ------------------------------------------------------------------------------------------------------------------------------------
AXA ROSENBERG VIT VALUE Seeks to increase the value of your investment in bull o AXA Rosenberg Investment Management LLC
LONG/SHORT EQUITY markets and bear markets through strategies that are
designed to have limited exposure to general equity mar-
ket risk.
- ------------------------------------------------------------------------------------------------------------------------------------
The Universal Institutional
Funds, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment
Portfolio Name Objective Manager
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Real Estate -- Seeks to provide above average current income and long- o Van Kampen(2)
Class I(1) term capital appreciation by investing primarily in equity
securities of companies in the U.S. real estate industry,
including real estate investment trusts.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) `Class I' shares are defined in the current underlying Trust prospectus.
(2) Van Kampen is the name under which Morgan Stanley Investment Management Inc.
does business in certain situations.
Other important information about the portfolios is included in the prospectuses
for each Trust that accompany 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 rate for 2003 is equal to the lifetime minimum rate of your
contract. Depending on the state where your contract is issued, your lifetime
minimum rate is either 1.5% or 3.00%. The data page for your contract shows the
lifetime minimum rate. The annual minimum rate will never be less than the
lifetime minimum rate. Check with your financial professional as to which rate
applies in your state. Current interest rates will never be less than the
yearly guaranteed interest rate.
Generally, contributions and transfers into and out of the guaranteed interest
option are limited. See "Transferring your money among the investment options"
later in the prospectus for restrictions on transfers from the guaranteed
interest option.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. We will not accept allocations to a fixed maturity option if on the date
the contribution or transfer is to be applied the rate to maturity is 3%. This
means that at points in time there may be no fixed maturity options available.
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.
- --------------------------------------------------------------------------------
Under the Special 10 year fixed maturity option (which is available only under
GPB Option 2), additional contributions will have the same maturity date as
your initial contribution (See "The guaranteed principal benefits," below). The
rate to maturity you will receive for each additional contribution is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution.
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.
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 subsequent contributions to the contract after 60 days, transfers from the
variable investment options or the guaranteed interest option into a fixed
maturity option or transfers from one fixed maturity option to another.
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. As of February 14,
2003, the next available maturity date was February 14, 2009. If no fixed
maturity options are available, we will transfer your maturity value to the
EQ/Money Market option.
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
Contract features and benefits 21
(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 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, the guaranteed principal benefits, 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. No more than 25% of any contribution may be allocated to the
guaranteed interest option. The total of your allocations must equal 100%. If
the annuitant is age 76-80, you may allocate contributions to fixed maturity
options with maturities of seven years or less. If the annuitant is age 81 or
older, you may allocate contributions to fixed maturity options with maturities
of 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.
THE GUARANTEED PRINCIPAL BENEFITS
Subject to state availability, we offer a Guaranteed principal benefit ("GPB")
with two options. You may only elect one of the GPBs. We will not offer either
GPB when the rate to maturity for the applicable fixed maturity option is 3%.
If you elect either GPB, you may not elect the Guaranteed minimum income
benefit, the systematic withdrawals option or the substantially equal
withdrawals option. Both GPB options allow you to allocate a portion of your
contribution or contributions to the variable investment options, while
ensuring that your account value will at least equal your contributions
adjusted for withdrawals and transfers on a specified date. GPB Option 2
generally provides you with the ability to allocate more of your contributions
to the variable investment options than could be allocated using GPB Option 1.
You may elect GPB Option 1 only if the annuitant is age 80 or younger when the
contract is issued (after age 75, only the 7-year fixed maturity option is
available; for QP the annuitant must be age 70 or younger when the contract is
issued). You may elect GPB Option 2 only if the annuitant is age 75 (70 for QP
contracts) or younger when the contract is issued. If you are purchasing an
IRA, QP or Rollover TSA contract, before you either purchase GPB Option 2 or
elect GPB Option 1 with 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, guaranteed interest option and permissible funds
outside this contract are sufficient to meet your required minimum
distributions. See "Tax information" later in this Prospectus and in the SAI.
GUARANTEED PRINCIPAL BENEFIT OPTION 1. Under GPB Option 1, you select a fixed
maturity option at the time you sign your application. We specify the portion
of your initial contribution (plus any applicable portion of the credit we pay)
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 (plus
any credit paid under your contract) on the fixed maturity option's maturity
date. The percentage of your contribution allocated to the fixed maturity
option will be calculated based upon the rate to maturity then in effect for
the fixed maturity option you choose. Your contract will contain information on
the amount of your contribution allocated to the fixed maturity option. If you
make any withdrawals or transfers from the fixed maturity option before the
option's maturity date, the amount in the fixed maturity option will be
adjusted and may no longer grow to equal your initial contribution under GPB
Option 1. The maturity date you select generally may not be later than 10
years, or earlier than 7 years from your contract date. You may allocate the
rest of your initial contribution to the variable investment options and
guaranteed interest option however you choose (unless you elect a dollar cost
averaging program, in which case the remainder of your initial contribution
must be allocated to the dollar cost averaging program). Upon the maturity date
of the fixed maturity option, you will be provided with the same notice and the
same choices with respect to the maturity value as described above under "Your
choices at the maturity date." There is no charge for GPB Option 1.
GUARANTEED PRINCIPAL BENEFIT OPTION 2. You may purchase GPB Option 2 at the
time you apply for your contract. IF YOU PURCHASE GPB OPTION 2, YOU MAY NOT
MAKE ADDITIONAL CONTRIBUTIONS TO YOUR CONTRACT AFTER SIX MONTHS FROM THE
CONTRACT ISSUE DATE OR AT ANY EARLIER TIME IF AT SUCH TIME THE THEN APPLICABLE
RATE TO MATURITY ON THE SPECIAL 10 YEAR FIXED MATURITY OPTION IS 3%. Therefore,
any discussion in this Prospectus that involves any additional contributions
after the first six months will be inapplicable.
We specify the portion of your initial contribution (including any applicable
portion of the credit we pay), and any additional permitted contributions, to
be allocated to a Special 10 year fixed maturity option. Your contract will
contain information on the percentage of applicable contributions allocated to
the Special 10 year fixed maturity option. You may allocate the rest of your
contributions among the investment options (other than the Special 10 year
fixed maturity option) however you choose, as permitted under your contract and
other than the Investment simplifier (unless you elect a dollar cost
22 Contract features and benefits
averaging program, in which case all contributions, other than amounts
allocated to the Special 10 year fixed maturity option, must be allocated to
the dollar cost averaging program). The Special 10 year fixed maturity option
will earn interest at the specified rate to maturity then in effect.
If on the 10th contract date anniversary, your annuity account value is less
than the amount that is guaranteed under GPB Option 2, we will increase your
annuity account value to be equal to the guaranteed amount under GPB Option 2.
Any such additional amounts added to your annuity account value will be
allocated to the EQ/Money Market investment option. After the maturity date of
the Special 10 year fixed maturity option, the guarantee under GPB Option 2
will terminate. Upon the maturity date of the Special 10 year fixed maturity
option, you will be provided with the same notice and the same choices with
respect to the maturity value as described above under "Your choices at the
maturity date." Your GPB Option 2 amount is equal to your initial contribution
adjusted for any additional permitted contributions (excluding any credit
applied to your contract), transfers out of the Special 10 year fixed maturity
option and withdrawals from the contract (see "How withdrawals (and transfers
out of the Special 10 year fixed maturity option) affect your Guaranteed
minimum income benefit, Guaranteed minimum death benefit and Guaranteed
principal benefit option 2" in "Accessing your money" later in this
Prospectus). Any transfers or withdrawals from the Special 10 year fixed
maturity option will also be subject to a market value adjustment (see "Market
value adjustment" under "Fixed maturity options" above in this section).
GPB Option 2 will terminate if the contract terminates before the maturity date
of the Special 10 year fixed maturity option. If the owner and the annuitant
are different people and the owner dies before the maturity date of the Special
10 year fixed maturity option, we will continue GPB Option 2 only if the
contract can continue through the maturity date of the Special 10 year fixed
maturity option. If the contract cannot so continue, we will terminate GPB
Option 2. GPB Option 2 will continue where there is a successor
owner/annuitant. GPB Option 2 will terminate upon the exercise of the
beneficiary continuation option. See "Payment of death benefit" later in this
Prospectus for more information about the continuation of the contract after
the death of the owner and/or the annuitant.
GPB Option 2 is not an account value or a cash value. There is a fee associated
with GPB Option 2 (see "Charges and expenses" later in this Prospectus). You
should note that the purchase of GPB Option 2 is not appropriate if you want to
make additional contributions to your contract beyond the first six months
after your contract is issued. If you later decide that you would like to make
additional contributions to the Accumulator(R) Plus(SM) contract, we may permit
you to purchase another contract. If we do, however, you should note that we do
not reduce or waive any of the charges on the new contract, nor do we guarantee
that the features available under this contract will be available under the new
contract. This means that you might end up paying more with respect to certain
charges than if you had simply purchased a single contract (for example, the
administrative charge).
The purchase of GPB Option 2 is also not appropriate if you plan on terminating
your contract before the maturity date of the Special 10 year fixed maturity
option. In addition, because we prohibit contributions to your contract after
the first six months, certain contract benefits that are dependent upon
contributions or account value will be limited (for example the amount of your
credit, the Guaranteed death benefits and Protection Plus). You should also
note that if you intend to allocate a large percentage of your contributions to
the guaranteed interest option or other fixed maturity options, the purchase of
GPB Option 2 may not be appropriate because of the guarantees already provided
by these options. In addition, GPB Option 2 protects only contributions (not
including the credit), and therefore your account value would have to decline
in an amount greater than the credit in order for the benefit to apply. An
example of the effect of GPB Option 1 and GPB Option 2 on your annuity contract
is included in Appendix V later in this Prospectus.
DOLLAR COST AVERAGING
We offer a variety of 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/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/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/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/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.
INVESTMENT SIMPLIFIER
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
Contract features and benefits 23
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. 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.
Interest sweep option. Under this option, you may elect to have monthly
transfers from amounts in the guaranteed interest option into the variable
investment options of your choice. The transfer date will be the last business
day of the month. The amount we will transfer will be the interest credited to
amounts you have in the guaranteed interest option from the last business day
of the prior month to the last business day of the current month. You must have
at least $7,500 in the guaranteed interest option on the date we receive your
election and on the last business day of each month thereafter to participate
in the interest sweep option. We will automatically cancel the interest sweep
program if the amount in the guaranteed interest option is less than $7,500 on
the last day of the month for two months in a row.
----------------------------------
You may not participate in any dollar cost averaging program if you are
participating in the rebalancing program. If you elect a GPB, you may also
elect the 12 month or General dollar cost averaging program. If you elect
either of these programs, everything other than amounts allocated to the fixed
maturity option under the GPB must be allocated to that dollar cost averaging
program. You may still elect the Investment simplifier for amounts transferred
from investment options (other than the fixed maturity option under the GPB you
have elected), and, for GPB Option 1, you may also elect Investment simplifier
for subsequent contributions. See "Transferring your money among investment
options" later in this Prospectus. For the fixed-dollar option and the interest
sweep option, the first monthly transfer will occur on the last business day of
the month following the month that we receive your election form at our
processing office.
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%, 4.5% or 5% of each contribution based on
the following breakpoints and rules:
- --------------------------------------------------------------------------------
Credit percentage
First year total contributions* applied to
Breakpoints contributions
- --------------------------------------------------------------------------------
Less than $500,000 4%
- --------------------------------------------------------------------------------
$500,000-$999,999.99 4.5%
- --------------------------------------------------------------------------------
$1 million or more 5%
- --------------------------------------------------------------------------------
- ----------------------
* 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.
If you purchase GPB Option 2, you may not make additional contributions after
the first six months. 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 additional 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 If at the end of the first contract year your 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.
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 contribu-
24 Contract features and benefits
tion, as well as any prior or subsequent contributions made in the first
contract year, accordingly.
In addition to the recovery of any Excess Credit, we will 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 In those jurisdictions where annuity payments may begin after one year from
the contract date, if you elect to receive annuity payments within five years
of the contract date, we will recover the credit that applies to any
contribution made in that five years. If you start receiving annuity payments
after five years from the contract date and within three years of making any
contribution, we will recover the credit that applies to any contribution
made within the prior three years.
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.
YOUR BENEFIT BASE
A benefit base is used to calculate the Guaranteed minimum income benefit and
the death benefits, as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Guaranteed minimum income 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. (See "How withdrawals
(and transfers out of the Special 10 year fixed maturity option) affect your
Guaranteed minimum income benefit, Guaranteed minimum death benefit and
Guaranteed principal benefit option 2" in "Accessing your money" later in
this Prospectus.)
5% ROLL UP TO AGE 85 (USED FOR THE GREATER OF THE 5% ROLL UP TO AGE 85 OR THE
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM
INCOME 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum income
benefit, Guaranteed minimum death benefit and Guaranteed principal benefit
option 2" in "Accessing your money" later in this Prospectus.)
The effective annual interest rate credited to this benefit base is:
o 5% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/Money Market); and
o 3% with respect to the EQ/Alliance Intermediate Government Securities and
EQ/Money Market, the fixed maturity options, the Special 10 year fixed
maturity option, 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 (USED FOR THE ANNUAL RATCHET TO AGE 85 ENHANCED DEATH
BENEFIT AND THE GREATER OF THE 5% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO
AGE 85 ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM INCOME
BENEFIT). Your benefit base is equal to the greater of:
o your initial contribution to the contract and 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum income
benefit, Guaranteed minimum death benefit and Guaranteed principal benefit
option 2" in "Accessing your money" later in this Prospectus).
GREATER OF THE 5% 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 5% Roll up to age 85
or the benefit base computed for 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.
- ---------
(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 25
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
Guaranteed minimum income benefit option" below 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 GUARANTEED MINIMUM INCOME BENEFIT OPTION
The Guaranteed minimum income 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 Guaranteed minimum income benefit which is described under "Guaranteed
minimum income benefit charge" in "Charges and expenses" later in this
Prospectus. Please ask your financial professional if the Guaranteed minimum
income benefit is available in your state.
This feature is not available if you elect a GPB. If you are purchasing this
contract to fund a Charitable Remainder Trust, the Guaranteed minimum income
benefit is not available, except for certain split-funded Charitable Remainder
Trusts. If the annuitant was older than age 60 at the time an IRA, QP or
Rollover TSA contract was issued, the Guaranteed minimum income 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.
The Guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or a 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 life with a
period certain payout option is 10 years. This period may be shorter, depending
on the annuitant's age as follows:
- --------------------------------------------------------------------------------
Level payments
- --------------------------------------------------------------------------------
Period certain years
-----------------------------
Annuitant's age at
exercise IRAs NQ
- --------------------------------------------------------------------------------
75 and younger 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
84 6 6
85 5 5
- --------------------------------------------------------------------------------
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, 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 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 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. The benefit base is applied only to the guaranteed annuity
purchase factors under the Guaranteed minimum income benefit in your contract
and not to any other guaranteed or current annuity purchase rates.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. For a
discussion of when your payments will begin and end, see "Exercise of
Guaranteed minimum income benefit" below.
Before you elect the Guaranteed minimum income benefit, you should consider the
fact that it provides a form of insurance and is based on conservative
actuarial factors. The guaranteed annuity purchase factors we use to determine
your payout annuity benefit under the Guaranteed minimum income benefit are
more conservative than the guaranteed annuity purchase factors we use for our
standard payout annuity options. 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 Guaranteed
minimum income benefit payout annuity will be smaller than each periodic
payment under our standard payout annuity options. 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.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 5% 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
26 Contract features and benefits
Securities, EQ/Money Market, the guaranteed interest option, the fixed maturity
options (including the Special 10 year fixed maturity option) or the loan
reserve account under Rollover TSA contracts.
- --------------------------------------------------------------------------------
Guaranteed minimum
Contract date income benefit -- annual
anniversary at exercise income payable 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 date anniversary. You must 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 annual payments one year after the annuity payout contract is
issued. You may choose to take a withdrawal prior to exercising the Guaranteed
minimum income benefit, which will reduce your payments. See "Accessing your
money" under "Withdrawing your account value" later in this Prospectus.
Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death, or if later, the end of the period certain
(where the payout option chosen includes a period certain).
EXERCISE RULES. You 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
within 30 days following 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) 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; and
(iv) a successor owner/annuitant may only continue the Guaranteed minimum
income benefit if the contract is not past the last date on which the
original annuitant could have exercised the benefit. In addition, the
successor owner/annuitant must be eligible to continue the benefit and to
exercise the benefit under the applicable exercise rule (described in the
above bullets) using the following additional rules. The successor
owner/annuitant's age on the date of the annuitant's death replaces the
annuitant's age at issue for purposes of determining the availability of
the benefit and which of the exercise rules applies. The original contract
issue date will continue to apply for purposes of the exercise rules.
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
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 (adjusted for 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 (without adjustment for any otherwise applicable negative
market value adjustment) 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 (adjusted for any subsequent
withdrawals, withdrawal charges and taxes that apply) whichever provides the
highest amount. If you elect the Spousal protection option, the guaranteed
minimum death benefit is based on the age of the older spouse, who may or may
not be the annuitant, for the life of the contract. See "Spousal protection" in
"Payment of death benefit" later in this Prospectus for more information.
OPTIONAL ENHANCED DEATH BENEFITS APPLICABLE FOR ANNUITANT AGES 0 THROUGH 75 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 75 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:
Contract features and benefits 27
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 5% 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 76 to 80 at issue of NQ, Rollover IRA, Roth Conversion IRA and Rollover
TSA contracts.
----------------------------------
In New York only the standard death benefit and the Annual Ratchet to age 85
enhanced death benefit are available.
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
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) adjusted for each withdrawal that exceeds your
Protection Plus earnings. "Net contributions" are reduced by the amount of that
excess. Protection Plus earnings are equal to (a) minus (b) where (a) is the
greater of the account value and the death benefit immediately prior to the
withdrawal and (b) is the net contributions as adjusted by any prior
withdrawals (credit amounts are not included in "net contributions"); and (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 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 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 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. Reduction on a pro rata basis
means that we calculate the percentage of the current account value that is
being withdrawn and we reduce the benefit 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 benefit is $40,000 before the withdrawal, it
would be reduced by $16,000 ($40,000 X .40) and the benefit after the
withdrawal would be $24,000 ($40,000-$16,000).
If you elect Spousal protection, the Protection Plus benefit is based on the
age of the older spouse, who may or may not be the annuitant. Upon the death of
the non-annuitant spouse, the account value will be increased by the value of
the Protection Plus benefit as of the date we receive due proof of death. Upon
the death of the annuitant, the value of the Protection Plus benefit is either
added to the death benefit payment or to the account value if Successor
owner/annuitant is elected. If the surviving spouse elects to continue the
contract, the benefit will be based on the age of the surviving spouse as of
the date of the non-surviving spouse's death for the remainder of the contract.
If the surviving spouse is age 76 or older, the benefit will terminate and the
charge will no longer be in effect. See "Spousal protection" in "Payment of
death benefit" later in this Prospectus for more information.
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, with a signed letter of instruction electing this right, 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
28 Contract features and benefits
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 to a Rollover IRA contract.
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
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total value of the values you have in: (i) the
variable investment options; (ii) the guaranteed interest account; (iii) market
adjusted amounts in the fixed maturity options; and (iv) the loan reserve
account (applies for Rollover TSA contracts only).
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, guaranteed minimum
income benefit, GPB Option 2, 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 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, which reflects withdrawals out of
the option and charges we deduct. 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.
TERMINATION OF YOUR CONTRACT
Your contract will terminate without value if your account value is
insufficient to pay any applicable charges when due. Your account value could
become insufficient due to withdrawals and/or poor market performance. Upon
such termination, you will lose any applicable guaranteed benefits.
30 Determining your contract's value
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 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 age 76-80, you must limit your transfers to fixed
maturity options with maturities of seven years or less. If the annuitant is
age 81 or older, you must limit your transfers to fixed maturity options of
five years or less. As of February 14, 2003, maturities of less than six
years were not available. 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 and affect
your GPB.
o During the first contract year, transfers into the guaranteed interest option
are not permitted.
o After the first contract year, a transfer into the guaranteed interest option
will not be permitted if such transfer would result in more than 25% of the
annuity account value being allocated to the guaranteed interest option,
based on the annuity account value as of the previous business day.
o No transfers are permitted into the Special 10 year fixed maturity option.
In addition, we reserve the right to restrict transfers among variable
investment options as described in your contract, including limitations on the
number, frequency or dollar amount of transfers.
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 and interest sweep option dollar cost averaging programs
described under "Allocating your contributions" in "Contract features and
benefits" 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.
From time to time, we may remove the restrictions regarding transferring
amounts out of the guaranteed interest option. If we do so, we will tell you.
We will also tell you at least 45 days in advance of the day we intend to
reimpose the transfer restrictions. When we reimpose the transfer restrictions,
if any dollar cost averaging transfer out of the guaranteed interest option
causes a violation of the 25% outbound restriction, that dollar cost averaging
program will be terminated for the current contract year. A new dollar cost
averaging program can be started in the next or subsequent contract years.
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:
Transferring your money among investment options 31
(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; your rebalancing allocations will not be changed, and
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 any
dollar cost averaging program. Rebalancing is not available for amounts you
have allocated to the guaranteed interest option or the 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. If you 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. In addition, we have the right to pay the cash
value and terminate this contract if no contributions are made during the last
three completed contract years, and the account value is less than $500, or if
you make a withdrawal that would result in a cash value of less than $500. See
"Surrendering your contract to receive its cash value" below. For the tax
consequences of withdrawals, see "Tax information" later in this Prospectus and
in the SAI.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus and "How withdrawals (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum income
benefit, Guaranteed minimum death benefit and Guaranteed principal benefit
option 2," below for more information on how withdrawals affect your guaranteed
benefits and could potentially cause your contract to terminate.
- --------------------------------------------------------------------------------
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.
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, 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: 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. This option is not available if you have elected a guaranteed principal
benefit.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts only)
We offer our "substantially equal withdrawals option" to allow you to receive
distributions from your account value without triggering the 10% additional
federal income tax penalty, which normally applies to distributions made before
age 59-1/2. See "Tax information" later in this Prospectus and in the SAI. This
is not the exclusive method of meeting this exception. After consultation with
your tax advisor, you may decide to use another method which would require you
to compute amounts yourself and request lump sum withdrawals. In such a case, a
withdrawal charge may apply. 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
Accessing your money 33
penalty. The IRS has recently issued guidance permitting an individual who had
elected to receive substantially equal withdrawals to change, without penalty,
from one of the IRS-approved methods of calculating fixed payments to another
IRS-approved method (similar to the required minimum distribution rules) of
calculating payments which vary each year.
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 using the IRS-approved method 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 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.
Substantially equal withdrawals that we calculate for you are not subject to a
withdrawal charge. This option is not available if you have elected a
guaranteed principal benefit.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA and Rollover TSA and QP contracts only -- See "Tax information"
later in this Prospectus and in the SAI)
We offer our "automatic required minimum distribution (RMD) service" to help
you meet lifetime required minimum distributions under federal income tax
rules. This is not the exclusive way for you to meet these rules. After
consultation with your tax adviser, you may decide to compute required minimum
distributions yourself and request lump sum withdrawals. In such a case, a
withdrawal charge may apply.
You may elect this service in the year in which you reach age 70-1/2. The
minimum amount we will pay out is $250. Currently, minimum distribution
withdrawal payments will be made annually. See "Required minimum distributions"
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 if you
are enrolled in our automatic RMD service 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.
Under Rollover TSA contracts, you may not elect our automatic RMD service 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 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 (other than the Special 10 year fixed
maturity option) in the order of the earliest maturity date(s) first. If such
amounts are still insufficient, we will deduct any remaining portion from the
Special 10 year fixed maturity option. A market value adjustment will apply to
withdrawals from the fixed maturity options (including the Special 10 year
fixed maturity option).
HOW WITHDRAWALS (AND TRANSFERS OUT OF THE SPECIAL 10 YEAR FIXED MATURITY
OPTION) AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT, GUARANTEED MINIMUM DEATH
BENEFIT AND GUARANTEED PRINCIPAL BENEFIT OPTION 2
In general, withdrawals will reduce your guaranteed benefits 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 the 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
benefit was $40,000 before the withdrawal, it would be reduced by $16,000
($40,000 X .40) and your new benefit after the withdrawal would be $24,000
($40,000-$16,000).
Transfers out of the Special 10 year fixed maturity option will reduce GPB
Option 2 on a pro rata basis. In addition, if you make a contract withdrawal
from the Special 10 year fixed maturity option, we will reduce your GPB Option
2 in a similar manner; however, the reduction will reflect both a transfer out
of the Special 10 year fixed maturity option and a withdrawal from the
contract. Therefore, the reduction in GPB Option 2 is greater when you take a
contract withdrawal from the Special 10 year fixed maturity option than it
would be if you took the withdrawal from another investment option.
Similar to the example above, if your account value is $30,000 and you withdraw
$12,000 from the Special 10 year fixed maturity option, you have withdrawn 40%
of your account value. If your GPB Option 2 benefit was $40,000 before the
withdrawal, the reduction to reflect the transfer out of the Special 10 year
fixed maturity option would equal $16,000 ($40,000 x .40). The amount used to
calculate the reduction to reflect the withdrawal from the contract is $24,000
($40,000 - $16,000). The reduction to reflect the withdrawal would equal $9,600
($24,000 x .40), and your new benefit after the withdrawal would be $14,400
($24,000 - $9,600).
With respect to the Guaranteed minimum income benefit, withdrawals will reduce
the 5% Roll up to age 85 benefit base on a dollar-for-dollar basis, as long as
the sum of withdrawals in a contract year is 5% or less of the 5% Roll up
benefit base on the most recent contract date anniversary. Once a withdrawal is
taken that causes the sum of withdrawals in a contract year to exceed 5% of the
benefit base on the most recent anniversary, that entire withdrawal and any
subsequent withdrawals in that same contract year will reduce the benefit base
pro rata. Reduction on a dollar-for-dollar basis means that your 5%
34 Accessing your money
Roll up to age 85 benefit base will be reduced by the dollar amount of the
withdrawal. The Annual Ratchet to age 85 benefit base will always be reduced on
a pro rata basis.
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 enrolled in our "automatic required minimum distribution (RMD)
service."
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 amounts are insufficient, any
additional amount of the loan will be subtracted from the fixed maturity
options (other than the Special 10 year fixed maturity option) in the order of
the earliest maturity date(s) first. If such amounts are still insufficient, we
will deduct any remaining portion from the Special 10 year fixed maturity
option. A market value adjustment will apply to withdrawals from the fixed
maturity options (including the Special 10 year fixed maturity option).
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
Accessing your money 35
the annuitant's age at contract issue. In addition, if you are exercising your
Guaranteed minimum income benefit, your choice of payout options are those that
are available under the Guaranteed minimum income benefit (see "Our Guaranteed
minimum income benefit option" in "Contract features and benefits" 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.
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 Immediate Annuities may be funded through your choice of available
variable investment options investing in portfolios of the EQ Advisors Trust.
The contract also offers a fixed income annuity payout option that can be
elected in combination with the variable annuity payout option. The amount of
each variable income 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 NQ and IRA Income Manager payout options provide guaranteed level
payments. The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only). You may not elect an Income
Manager payout option without life contingencies 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.
36 Accessing your money
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 life contingent 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 from the Accumulator(R) Plus(SM)
contract. The date annuity payments begin may not be earlier than five years
(or one year, in a limited number of jurisdictions) 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.
In those jurisdictions where annuity payments may begin after one year from the
contract date, if you elect to receive annuity payments within five years of
the contract date, we will recover the credit that applies to any contribution
made in that five years. If you start receiving annuity payments after five
years from the contract date and within three years of making any contribution,
we will recover the credit that applies to any contribution made within the
prior three years.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier. Your financial professional can provide you with additional
information about your annuity payment options.
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
- --------------------------------------------------------------------------------
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 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 Guaranteed minimum
income benefit, if you elect this optional benefit.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
o On the first 10 contract date anniversaries -- a charge for GPB Option 2, 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.
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 0.35% 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 0.25% 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 (other than the Special 10 year
fixed maturity option) in the order of the earliest maturity date(s) first. If
such amounts are still insufficient, we will deduct any remaining portion from
the Special 10 year fixed maturity option. If the contract is surrendered or
annuitized or a death benefit is paid, we will deduct a pro rata portion of the
charge for that year. A market value adjustment will apply to deductions from
the fixed maturity options (including the Special 10 year fixed maturity
option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
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
38 Charges and expenses
10% free withdrawal amount, described below, or (2) if you surrender your
contract to receive its cash value or apply your cash value to a non life
contingent annuity payout option. 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% 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.
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, or in the case of the first contract year, your initial
contribution, minus any other withdrawals made during the contract year. The
10% free withdrawal amount does not apply if you surrender your contract except
where required by law.
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 for which it is in effect. The charge is equal to
0.25% of the Annual Ratchet to age 85 benefit base.
Greater of 5% 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 for which it is in effect. The charge is equal
to 0.50% of the greater of the 5% Roll up to age 85 or the Annual Ratchet to
age 85 benefit base.
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 amount are
insufficient, we will deduct all or a portion of the charge from the fixed
maturity options (other than the Special 10 year fixed maturity option) in the
order of the earliest maturity date(s) first. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. If the contract is surrendered or annuitized or a death
benefit is paid, we will deduct a pro rata portion of the charge for that year.
A market value adjustment will apply to deductions from the fixed maturity
options (including the Special 10 year fixed maturity option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaran-
Charges and expenses 39
teed benefits. Please see "Termination of your contract" in "Determining your
contract value" earlier in this Prospectus.
There is no additional charge for the standard death benefit.
GUARANTEED PRINCIPAL BENEFIT OPTION 2
If you purchase GPB Option 2, we deduct a charge annually from your account
value on the first 10 contract date anniversaries. The charge is equal 0.50% of
the account value. We will deduct this charge from your value in the variable
investment options and the guaranteed interest option on a pro rata basis. If
these amounts are insufficient, we will deduct any remaining portion of the
charge from amounts in any fixed maturity options (other than the Special 10
year fixed maturity option) in the order of the earliest maturity date(s)
first. If such amounts are still insufficient, we will deduct any remaining
portion from the Special 10 year fixed maturity option. If the contract is
surrendered or annuitized or a death benefit is paid, we will deduct a pro rata
portion of the charge for that year. A market value adjustment will apply to
deductions from the fixed maturity options (including the Special 10 year fixed
maturity option).
GUARANTEED MINIMUM INCOME BENEFIT CHARGE
If you elect the Guaranteed minimum income 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 0.55% 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
still 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. If
the contract is surrendered or annuitized or a death benefit is paid, we will
deduct a pro rata portion of the charge for that year. A market value
adjustment will apply to deductions from the fixed maturity options .
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract value"
earlier in this Prospectus.
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 (other than the Special 10 year fixed maturity option) in the
order of the earliest maturity date(s) first. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. If the contract is surrendered or annuitized or a death
benefit is paid, we will deduct a pro rata portion of the charge for that year.
A market value adjustment will apply to deductions from the fixed maturity
options (including the Special 10 year fixed maturity option).
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 jurisdiction and ranges from 0% to 3.5%.
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 0.10% 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. 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
40 Charges and expenses
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.
Charges and expenses 41
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
surviving spouse who is the sole primary beneficiary of the deceased
owner/annuitant can choose to be treated as the successor owner/annuitant and
continue the contract. The Successor owner/annuitant feature is only
available under NQ and individually-owned IRA contracts.
For NQ and all types of 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. An eligible successor owner,
including a surviving joint owner after the first owner dies, may elect the
beneficiary continuation option for NQ contracts discussed later under
"Beneficiary continuation option" below.
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. The successor owner/annuitant must be 85 or younger as of the
date of the non-surviving spouse's death.
42 Payment of death benefit
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 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.
We will determine whether your applicable Guaranteed minimum death benefit
option will continue as follows:
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was age
84 or younger at death, the Guaranteed minimum death benefit continues based
upon the option that was elected by the original owner/annuitant and will
continue to grow according to its terms until the contract date anniversary
following the date the successor owner/annuitant reaches age 85.
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was age
85 or older at death, we will reinstate the Guaranteed minimum death benefit
that was elected by the original owner/annuitant. The benefit will continue
to grow according to its terms until the contract date anniversary following
the date the successor owner/annuitant reaches age 85.
o If the successor owner/annuitant is age 76 or over on the date of the
original owner/annuitant's death, the Guaranteed minimum death benefit will
no longer grow, and we will no longer charge for the benefit.
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.
For information on the operation of this feature with the Guaranteed minimum
income benefit, see "Exercise of Guaranteed minimum death benefit" under "Our
Guaranteed minimum income benefit option" in "Contract features and benefits,"
earlier in this Prospectus. For information on the operation of this feature
with Protection Plus, see "Protection Plus" in "Guaranteed minimum death
benefit" under "Contract features and benefits," earlier in this Prospectus.
SPOUSAL PROTECTION
SPOUSAL PROTECTION OPTION FOR NQ CONTRACTS ONLY. This feature permits spouses
who are joint contract owners to increase the account value to equal the
guaranteed minimum death benefit, if higher, and by the value of any Protection
Plus benefit, if elected, upon the death of either spouse. This account value
"step up" occurs even if the surviving spouse was the named annuitant. If you
and your spouse jointly own the contract and one of you is the named annuitant,
you may elect the Spousal protection option at the time you purchase your
contract at no additional charge. Both spouses must be between the ages of 20
and 70 at the time the contract is issued and must each be named the primary
beneficiary in the event of the other's death.
The annuitant's age is generally used for the purpose of determining contract
benefits. However, for the Annual Ratchet to age 85 and the Greater of 5% Roll
up to age 85 or Annual Ratchet to age 85 guaranteed minimum death benefits and
the Protection Plus benefit, the benefit is based on the older spouse's age.
The older spouse may or may not be the annuitant.
If the annuitant dies prior to annuitization, the surviving spouse may elect to
receive the death benefit, including the value of the Protection Plus benefit,
or, if eligible, continue the contract as the sole owner/ annuitant by
electing the successor owner/annuitant option. If the non-annuitant spouse dies
prior to annuitization, the surviving spouse continues the contract
automatically as the sole owner/annuitant. In either case, the contract would
continue, as follows:
o As of the date we receive due proof of the spouse's death, the account value
will be re-set to equal the Guaranteed minimum death benefit as of the date
of the non-surviving spouse's death, if higher, increased by the value of the
Protection Plus benefit.
o The Guaranteed minimum death benefit continues to be based on the older
spouse's age for the life of the contract, even if the younger spouse is
originally or becomes the sole owner/annuitant.
o The Protection Plus benefit will now be based on the surviving spouse's age
at the date of the non-surviving spouse's death for the remainder of the life
of the contract. If the benefit had been previously frozen because the older
spouse had attained age 80, it will be reinstated if the surviving spouse is
age 75 or younger. The benefit is then frozen on the contract date
anniversary after the surviving spouse reaches age 80. If the surviving
spouse is age 76 or older, the benefit will be discontinued even if the
surviving spouse is the older spouse (upon whose age the benefit was
originally based).
o If the annuitant dies first, withdrawal charges will no longer apply to any
contributions made prior to the annuitant's death. If the non-annuitant
spouse dies first, the withdrawal charge schedule remains in effect with
regard to all contributions.
We will not allow Spousal protection to be added after contract issue. If there
is a change in owner or primary beneficiary, the Spousal protection benefit
will be terminated. If you divorce, but do not change the owner or primary
beneficiary, Spousal protection continues.
BENEFICIARY CONTINUATION OPTION
This feature permits a designated individual, on the contract owner's death, to
maintain a contract in the deceased contract owner's name
Payment of death benefit 43
and receive distributions under the contract, instead of receiving the death
benefit in a single sum. We make this option available to beneficiaries under
traditional IRA, Roth IRA and NQ contracts, subject to state availability.
Please speak with your financial professional for further information.
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA AND ROTH IRA CONTRACTS
ONLY. The beneficiary continuation option must be elected by September 30th of
the year following the calendar year of your death and before any other
inconsistent election is made. Beneficiaries who do not make a timely election
will not be eligible for this option. If the election is made, then, as of the
date we receive satisfactory proof of death, any required instructions,
information and forms necessary to effect the beneficiary continuation option
feature, we will increase the account value to equal the applicable death
benefit if such death benefit is greater than such account value. Where an IRA
contract is owned in a custodial individual retirement account, the custodian
may reinvest the death benefit in an individual retirement annuity contract,
using the account beneficiary as the annuitant. Please speak with your
financial professional for further information.
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. For sole
spousal beneficiaries, payments may begin by December 31st of the calendar year
in which you would have reached age 70-1/2, if such time is later. For
traditional IRA contracts only, if you die before your Required Beginning Date
for Required Minimum Distributions, as discussed in the Statement of Additional
Information, the beneficiary may choose the "5-year rule" option instead of
annual payments over life expectancy. The 5-year rule is always available to
beneficiaries under Roth IRA contracts. If the beneficiary chooses this option,
the beneficiary may take withdrawals as desired, but the entire account value
must be fully withdrawn by December 31st of the calendar year which contains
the fifth anniversary of your death.
Under the beneficiary continuation option for IRA and Roth IRA contracts:
o The contract continues in your name for the benefit of your beneficiary.
o This feature is only available if the beneficiary is an individual. Certain
trusts with only individual beneficiaries will be treated as individuals for
this purpose.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the beneficiary's own
life expectancy, if payments over life expectancy are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the contract, they will no
longer be in effect and charges for such benefits will stop. Also, any
minimum death benefit feature 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, if any, will apply.
o Any partial withdrawal must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking required minimum distributions based on
the remaining life expectancy of the deceased beneficiary or to receive any
remaining interest in the contract in a lump sum. The option elected will be
processed when we receive satisfactory proof of death, any required
instructions for the method of payment and any required information and forms
necessary to effect payment.
BENEFICIARY CONTINUATION OPTION FOR NQ CONTRACT ONLY. This feature, also known
as the Inherited annuity, may only be elected when the NQ contract owner dies
before the annuity commencement date, whether or not the owner and the
annuitant are the same person. If the owner and annuitant are different and the
owner dies before the annuitant, for purposes of this discussion, "beneficiary"
refers to the successor owner. For a discussion of successor owner, see "When
an NQ contract owner dies before the annuitant" earlier in this section. This
feature must be elected within 9 months following the date of your death and
before any inconsistent election is made. Beneficiaries who do not make a
timely election will not be eligible for this option.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy, determined on a term certain basis and in the
year payments start. These payments must begin no later than one year after the
date of your death and are referred to as "scheduled payments." The beneficiary
may choose the "5-year rule" instead of scheduled payments over life
expectancy. If the beneficiary chooses the 5-year rule, there will be no
scheduled payments. Under the 5-year rule, the beneficiary may take withdrawals
as desired, but the entire account value must be fully withdrawn by the fifth
anniversary of your death.
Under the beneficiary continuation option for NQ contracts (regardless of
whether the owner and the annuitant are the same person):
o This feature is only available if the beneficiary is an individual. It is not
available for any entity such as a trust, even if all of the beneficiaries of
the trust are individuals.
o The contract continues in your name for the benefit of your beneficiary.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the respective
beneficiary's own life expectancy, if scheduled payments are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
44 Payment of death benefit
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the contract, they will no
longer be in effect and charges for such benefits will stop. Also, any
minimum death benefit feature will no longer be in effect.
o If the beneficiary chooses the "5-year rule," withdrawals may be made at any
time. If the beneficiary chooses scheduled payments, the beneficiary must
also choose between two potential withdrawal options at the time of election.
"Withdrawal Option 1" permits total surrender only. "Withdrawal Option 2"
permits the beneficiary to take withdrawals, in addition to scheduled
payments, at any time. See "Taxation of nonqualified annuities" in "Tax
information" later in this Prospectus.
o Any partial withdrawals must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract on the beneficiary's death.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking scheduled payments based on the
remaining life expectancy of the deceased beneficiary (if scheduled payments
were chosen) or to receive any remaining interest in the contract in a lump
sum. We will pay any remaining interest in the contract in a lump sum if your
beneficiary elects the 5-year rule. The option elected will be processed when
we receive satisfactory proof of death, any required instructions for the
method of payment and any required information and forms necessary to effect
payment.
If you are both the owner and annuitant:
o As of the date we receive satisfactory proof of death, any required
instructions, information and forms necessary to effect the beneficiary
continuation option feature, we will increase the annuity account value to
equal the applicable death benefit if such death benefit is greater than such
account value.
o No withdrawal charges, if any, will apply to any withdrawals by the
beneficiary.
If the owner and annuitant are not the same person:
o If the beneficiary continuation option is elected, the beneficiary
automatically becomes the new annuitant of the contract, replacing the
existing annuitant.
o The annuity account value will not be reset to the death benefit amount.
o The contract's withdrawal charge schedule will continue to be applied to any
withdrawal or surrender other than scheduled payments; the contract's free
corridor amount will continue to apply to withdrawals but does not apply to
surrenders.
o We do not impose a withdrawal charge on scheduled payments except if, when
added to any withdrawals previously taken in the same contract year,
including for this purpose a contract surrender, the total amount of
withdrawals and scheduled payments exceed the free corridor amount. See the
"Withdrawal charges" in "Charges and expenses" earlier in this Prospectus.
If a contract is jointly owned:
o The surviving owner supersedes any other named beneficiary and may elect the
beneficiary continuation option.
o If the deceased joint owner was also the annuitant, see "If you are both the
owner and annuitant" earlier in this section.
o If the deceased joint owner was not the annuitant, see "If the owner and
annuitant are not the same person" earlier in this section.
Payment of death benefit 45
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) Plus(SM) contracts owned by
United States individual taxpayers. The tax rules can differ, depending on the
type of contract, whether NQ, traditional IRA, Roth IRA, QP or 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
without notice. 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 or values under the contract, or payments under the contract,
for example, amounts due to beneficiaries, may be subject to federal or state
gift, estate, or inheritance 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, the Guaranteed minimum income benefit, guaranteed
interest option, fixed maturity options, selection of investment funds 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. Although certain provisions of the Temporary
Regulations on required minimum distributions concerning the actuarial value of
additional contract benefits, which could have increased the amount required to
be distributed from annuity contracts funding qualified plans, TSAs and IRAs
have been suspended for 2003, these or similar provisions may apply in future
years. You may want to discuss with your tax advisor the potential implication
of these Regulations before you purchase this annuity contract or purchase
additional features under this annuity contract. 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).
46 Tax information
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) 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 could 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. The IRS has not specifically addressed the tax treatment
of the Spousal protection benefit. Please consult with your tax advisor before
electing this feature.
Beneficiary continuation option
We have received a Private Letter Ruling from the IRS regarding certain tax
consequences of scheduled payments under the beneficiary continuation option
for NQ contracts. See the discussion "Beneficiary continuation option for NQ
contracts only" in "Payment of death benefit" earlier in this Prospectus. Among
other things, the IRS rules that:
o scheduled payments under the beneficiary continuation option for NQ contracts
satisfy the death of owner rules of Section 72(s)(2) of the Code, regardless
of whether the beneficiary elects Withdrawal Option 1 or Withdrawal Option 2;
o scheduled payments, any additional withdrawals under Withdrawal Option 2, or
contract surrenders under Withdrawal Option 1 will only be taxable to the
beneficiary when amounts are actually paid, regardless of the Withdrawal
Option selected by the beneficiary;
o a beneficiary who irrevocably elects scheduled payments with Withdrawal
Option 1 will receive "excludable amount" tax treatment on scheduled
payments. See "Annuity payments" earlier in this section. If the beneficiary
elects to surrender the contract before all scheduled payments are paid, the
amount received upon surrender is a non-annuity payment taxable to the extend
it exceeds any remaining investment in the contract.
The Ruling specifically does not address the taxation of any payments received
by a beneficiary electing Withdrawal Option 2 (whether
Tax information 47
scheduled payments or any withdrawal that might be taken). There is no
assurance that we will receive any further rulings addressing the tax
consequences of payments under Withdrawal Option 2. Before electing the
beneficiary continuation option feature, the individuals you designate as
beneficiary or successor owner should discuss with their tax advisors the
consequences of such elections.
The tax treatment of a withdrawal after the death of the owner taken as a
single sum or taken as withdrawals under the 5-year rule is generally the same
as the tax treatment of a withdrawal from or surrender of 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, in accordance with IRS formulas.
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.
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, 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. 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.
We have not applied for an opinion letter from the IRS to approve the
respective forms of the Equitable Accumulator(R) Plus(SM) traditional and
48 Tax information
Roth IRA contracts for use as a traditional and Roth IRA, respectively. We have
received IRS opinion letters approving the respective forms of a similar
traditional IRA and Roth IRA endorsement for use as a traditional 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 contracts submitted for IRS approval do not include every
feature possibly available under the Equitable Accumulator(R) traditional and
Roth IRA contracts.
PROTECTION Plus(SM) FEATURE
The Protection Plus feature is offered for IRA contracts, subject to state and
contract availability. We have received IRS opinion letters that the contract
with a similar Protection Plus feature qualifies 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 contracts
submitted for IRS approval do not include every feature possibly available
under the Equitable Accumulator(R) traditional and Roth IRA contracts. You
should discuss with your tax advisor 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
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 the taxable year for which the contribution is made is $3,000. The amounts
are the same for both 2003 and 2004. The maximum regular contribution for both
2003 and 2004 is increased to $3,500 if you are at least age 50 at any time
during the taxable year for which the contribution is made.
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 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.
Certain distributions from Roth IRAs may qualify for fully tax-free treatment.
These are 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.
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
Tax information 49
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 annuity
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 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, the IRS has not
specifically addressed this issue. 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 must establish your TSA with
funds that are directly transferred from another 403(b) arrangement or rolled
over from another 403(b) arrangement. You may make subsequent rollover
contributions to your Rollover TSA contract from these sources: qualified
plans, governmental 457(b) plans and traditional IRAs, as well as other TSAs
and 403(b) arrangements. 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 which 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.
50 Tax information
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 accept
after-tax funds, we do not track your investment in the contract, if any. We
will report all distributions from this Rollover TSA as fully taxable. 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-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 $15,840 in periodic annuity payments in
2003, 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
Tax information 51
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.
52 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 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
The 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.
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, and other aspects
of its operations, appears in the prospectuses for each Trust, which accompany
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 14, 2003
and the related price per $100 of maturity value were as shown below:
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Fixed maturity
options with
February 14th Rate to maturity Price
maturity date of as of per $100 of
maturity year February 14, 2003 maturity value
- --------------------------------------------------------------------------------
2004 3.00%* $ 97.09
2005 3.00%* $ 94.25
2006 3.00%* $ 91.51
2007 3.00%* $ 88.84
2008 3.00%* $ 86.25
2009 3.11% $ 83.20
2010 3.49% $ 78.64
2011 3.76% $ 74.42
2012 3.96% $ 70.49
2013 4.19% $ 66.31
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* Since these rates to maturity are 3%, no amounts could have been allocated to
these 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 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.
More information 53
(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 for your FMO based on the rate
for a new FMO issued on the same date and having the same maturity date
as your FMO; if the same maturity date is not available for new FMOs, we
determine a rate that is between the rates for new FMO maturities that
immediately precede and immediately follow your FMOs maturity date.
(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 by using a widely-published Index. 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 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" under "Contract features and benefits" earlier in
this Prospectus. We may also treat contributions wired by certain
broker-dealers as received by us on the day we receive all the required
information, subject to receipt of the wired funds on the following business
day.
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.
54 More information
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, nor
is it available with GPB Option 2.
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.
o For the fixed-dollar option and the interest sweep option, the first monthly
transfer will occur on the last business day of the month following the month
that we receive your election form at our processing office.
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.
The Trusts sell their shares to Equitable Life separate accounts in connection
with Equitable Life's variable annuity and/or life insurance products, and to
separate accounts of insurance companies, both affiliated and unaffiliated with
Equitable Life. EQ Advisors Trust and AXA Premier VIP Trust also sell their
shares to the trustee of a qualified plan for Equitable Life. We currently do
not foresee any disadvantages to
More information 55
our policyowners arising out of these arrangements. However, the Board of
Trustees or Directors of each Trust intends to monitor events 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 Board's response
insufficiently protects our policyowners, we will see to it that appropriate
action is taken to do so.
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, 2002
and 2001, and for the three years ended December 31, 2002 incorporated in this
prospectus by reference to the 2002 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 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 professionals as commissions related to sales of the
contracts.
56 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 fees and charges under the contract, including
the withdrawal charge, the highest optional enhanced death benefit charge, the
optional charge for Guaranteed principal benefit option 2, the optional 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
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 this table, of $0.13 per $1,000.
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 are being
offered for the first time as of the date of this Prospectus.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology) and the AXA Premier VIP High Yield, AXA Premier VIP
Aggressive Equity and AXA Moderate Allocation portfolios, 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/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.
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 57
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2002:
- -------------------------------------------------------------------------------------------------
Length of option period
--------------------------------------------
Since option
Variable investment options 1 year 5 years inception*
- -------------------------------------------------------------------------------------------------
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/Aggressive Stock *** (36.89)% (16.14)% (11.16)%
EQ/Alliance Common Stock *** (41.43)% (7.59)% (0.33)%
EQ/Alliance Growth and Income *** -- -- --
EQ/Alliance Intermediate Government Securities *** -- -- --
EQ/Alliance International *** -- -- --
EQ/Alliance Premier Growth (39.17)% -- (22.57)%
EQ/Alliance Quality Bond *** -- -- --
EQ/Alliance Small Cap Growth (38.24)% (7.30)% (2.10)%
EQ/Alliance Technology (49.03)% -- (45.21)%
EQ/Balanced *** (20.40)% (0.32)% (17.23)%
EQ/Bernstein Diversified Value (21.35)% -- (1.88)%
EQ/Calvert Socially Responsible (34.39)% -- (26.07)%
EQ/Capital Guardian International (22.72)% -- (11.53)%
EQ/Capital Guardian Research (32.55)% -- (9.10)%
EQ/Capital Guardian U.S. Equity (31.57)% -- (10.28)%
EQ/Emerging Markets Equity (13.53)% (9.53)% (9.53)%
EQ/Equity 500 Index *** (30.28)% (4.77)% 1.83%
EQ/Evergreen Omega (31.99)% -- (16.76)%
EQ/FI Mid Cap (26.28)% -- (19.02)%
EQ/FI Small/Mid Cap Value (22.43)% (7.15)% (6.41)%
EQ/High Yield *** (10.40)% (8.28)% (3.24)%
EQ/J.P. Morgan Core Bond 2.43% -- 3.82%
EQ/Janus Large Cap Growth (38.27)% -- (35.75)%
EQ/Lazard Small Cap Value (21.53)% -- (1.03)%
EQ/Marsico Focus (19.28)% -- (6.08)%
EQ/Mercury Basic Value Equity (24.41)% 2.20% 4.89%
EQ/MFS Emerging Growth Companies (42.45)% (7.50)% (2.95)%
EQ/MFS Investors Trust (28.91)% -- (12.74)%
EQ/Money Market *** (6.14)% 0.61% 1.77%
EQ/Putnam Growth and Income Value (26.85)% (5.96)% (2.53)%
EQ/Putnam International Equity (24.40)% (1.47)% 0.31%
EQ/Putnam Voyager (34.24)% (7.82)% (2.87)%
EQ/Small Company Index (28.75)% -- (5.45)%
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Length of portfolio period
--------------------------------------------------------
Since
portfolio
Variable investment options 3 years 5 years 10 years inception**
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond -- -- -- 0.99%
AXA Premier VIP Health Care -- -- -- (27.71)%
AXA Premier VIP International Equity -- -- -- (28.75)%
AXA Premier VIP Large Cap Core Equity -- -- -- (30.41)%
AXA Premier VIP Large Cap Growth -- -- -- (39.22)%
AXA Premier VIP Large Cap Value -- -- -- (27.61)%
AXA Premier VIP Small/Mid Cap Growth -- -- -- (45.33)%
AXA Premier VIP Small/Mid Cap Value -- -- -- (33.21)%
AXA Premier VIP Technology -- -- -- (50.93)%
EQ/Aggressive Stock *** (29.29)% (16.14)% (1.74)% 6.80%
EQ/Alliance Common Stock *** (26.22)% (7.59)% 5.42% 9.17%
EQ/Alliance Growth and Income *** (10.17)% 0.44% -- 6.55%
EQ/Alliance Intermediate Government Securities *** 4.56% 3.10% 3.27% 3.82%
EQ/Alliance International *** (25.29)% (8.25)% -- (3.74)%
EQ/Alliance Premier Growth (31.56)% -- -- (22.57)%
EQ/Alliance Quality Bond *** 5.11% 3.12% -- 3.28%
EQ/Alliance Small Cap Growth (16.81)% (7.30)% -- (2.10)%
EQ/Alliance Technology -- -- -- (45.21)%
EQ/Balanced *** (10.31)% (0.32)% 3.44% 6.60%
EQ/Bernstein Diversified Value (9.07)% -- -- (1.88)%
EQ/Calvert Socially Responsible (20.77)% -- -- (17.01)%
EQ/Capital Guardian International (24.41)% -- -- (11.53)%
EQ/Capital Guardian Research (12.67)% -- -- (9.10)%
EQ/Capital Guardian U.S. Equity (13.00)% -- -- (10.28)%
EQ/Emerging Markets Equity (25.17)% (9.53)% -- (13.49)%
EQ/Equity 500 Index *** (20.52)% (4.77)% -- 6.39%
EQ/Evergreen Omega (23.61)% -- -- (16.76)%
EQ/FI Mid Cap -- -- -- (19.25)%
EQ/FI Small/Mid Cap Value (6.73)% (7.15)% -- (3.09)%
EQ/High Yield *** (8.44)% (8.28)% 2.73% 3.79%
EQ/J.P. Morgan Core Bond 5.82% -- -- 3.82%
EQ/Janus Large Cap Growth -- -- -- (35.93)%
EQ/Lazard Small Cap Value 2.46% -- -- (1.03)%
EQ/Marsico Focus -- -- -- (5.79)%
EQ/Mercury Basic Value Equity (4.84)% 2.20% -- 4.89%
EQ/MFS Emerging Growth Companies (37.22)% (7.50)% -- (2.95)%
EQ/MFS Investors Trust (18.31)% -- -- (12.74)%
EQ/Money Market *** (0.53)% 0.61% 1.43% 3.33%
EQ/Putnam Growth and Income Value (11.73)% (5.96)% -- (2.53)%
EQ/Putnam International Equity (22.74)% (1.47)% -- 0.31%
EQ/Putnam Voyager (29.56)% (7.82)% -- (2.87)%
EQ/Small Company Index (12.82)% -- -- (5.45)%
- -------------------------------------------------------------------------------------------------------------
* The variable investment option inception dates are: AXA Premier VIP
Aggressive Equity, AXA Premier VIP High Yield, EQ/Alliance Common Stock,
EQ/Money Market and EQ/Equity 500 Index (October 16, 1996); EQ/Alliance
Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth
Companies, 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/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); AXA Moderate Allocation (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 and
EQ/Alliance Quality Bond (January 14, 2002); EQ/Alliance Intermediate
Government Securities (April 1, 2002); AXA Rosenberg VIT Value
58 Investment performance
Long/Short Equity and U.S. Real Estate -- Class I (July 21, 2003); AXA
Aggressive Allocation Portfolio, AXA Conservative Allocation Portfolio, AXA
Conservative-Plus Allocation Portfolio and AXA Moderate-Plus Allocation
Portfolio (July 31, 2003). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2001.
** The portfolio inception dates are: EQ/Alliance Common Stock (January 13,
1976); EQ/Money Market (July 13, 1981); AXA Moderate Allocation and AXA
Premier VIP Aggressive Equity (January 27, 1986); AXA Premier VIP High Yield
(January 2, 1987); 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/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/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/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); U.S. Real Estate -- Class I (May 3, 1997);
AXA Rosenberg VIT Value Long/Short Equity (May 2, 2003); AXA Aggressive
Allocation Portfolio, AXA Conservative Allocation Portfolio, AXA
Conservative-Plus Allocation Portfolio, AXA Moderate-Plus Allocation
Portfolio (July 31, 2003). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2001.
*** In each case, the performance shown is for the indicated EQ Advisors Trust
portfolio and any predecessor that it may have had. The inception dates for
these portfolios 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.
Investment performance 59
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/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 AXA Premier VIP 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/Money Market, EQ/Alliance Quality Bond and AXA
Premier VIP 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
Guaranteed minimum income benefit, the optional Protection Plus benefit charge,
the optional Guaranteed principal benefit option 2 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/Money Market Option, EQ/Alliance
Quality Bond Option and AXA Premier VIP High Yield Option" in the SAI.
60 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
2002 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 61
Appendix I: 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.
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;
o although certain provisions of the Temporary Regulations on required minimum
distributions which would have required that the actuarial value of
additional annuity contract benefits be added to the dollar amount credited
for purposes of calculating required minimum distributions have been
suspended for 2003, these or similar provisions may apply in future years,
and could increase the amounts required to be distributed from the contract;
and
o the Guaranteed minimum income benefit may not be an appropriate feature for
annuitants who are older than 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 I: Purchase considerations for QP contracts A-1
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Appendix II: 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 14, 2004 to a fixed maturity option with a maturity date of
February 14, 2013 (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 14, 2008.
- -----------------------------------------------------------------------------------
Hypothetical assumed
rate to maturity on
February 14, 2008
- -----------------------------------------------------------------------------------
5.00% 9.00%
- -----------------------------------------------------------------------------------
As of February 14, 2008 (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 14, 2008 (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: 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.
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/Money Market, the
guaranteed interest option, the fixed maturity options or the Special 10 year
fixed maturity option), 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:
- --------------------------------------------------------------------------------------------------
5% Roll up to age 85 Annual Ratchet to age 85
End of Contract Year Account Value enhanced benefit base enhanced benefit base
- --------------------------------------------------------------------------------------------------
1 109,200 $105,000 109,200
- --------------------------------------------------------------------------------------------------
2 120,120 $110,250 120,120
- --------------------------------------------------------------------------------------------------
3 134,534 $115,763 134,534
- --------------------------------------------------------------------------------------------------
4 107,628 $121,551 134,534
- --------------------------------------------------------------------------------------------------
5 118,390 $127,628 134,534
- --------------------------------------------------------------------------------------------------
6 132,597 $134,010 134,534
- --------------------------------------------------------------------------------------------------
7 132,597 $140,710 134,534
- --------------------------------------------------------------------------------------------------
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 85
(1) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(2) 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 5% 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 5% Roll up to age 85 or the Annual
Ratchet to age 85.*
* At the end of contract years 4 through 7, the death benefit will be the
enhanced death benefit. At the end of contract years 1, 2 and 3, the death
benefit will be the current account value.
Appendix III: Enhanced death benefit example C-1
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Appendix IV: Hypothetical Illustrations
- --------------------------------------------------------------------------------
ILLUSTRATION OF ACCOUNT VALUES, CASH VALUES AND CERTAIN GUARANTEED MINIMUM
BENEFITS
The following tables illustrate the changes in account value, cash value and
the values of the "greater of 5% Roll up to age 85 or the Annual Ratchet to age
85" guaranteed minimum death benefit, the Protection Plus benefit and the
Guaranteed minimum income benefit under certain hypothetical circumstances for
an Accumulator(R) Plus(SM) contract. The table illustrates the operation of a
contract based on a male, issue age 60, who makes a single$100,000 contribution
and takes no withdrawals. The amounts shown are for the beginning of each
contract year and assume that all of the account value is invested in
portfolios that achieve investment returns at constant gross annual rates of 0%
and 6% (i.e., before any investment management fees, 12b-1 fees or other
expenses are deducted from the underlying portfolio assets). After the
deduction of the arithmetic average of the investment management fees, 12b-1
fees and other expenses of all of the underlying Portfolios (as described
below), the corresponding net annual rates of return would be (2.88)%, 3.12%
for the Accumulator(R) Plus(SM) contract, at the 0% and 6% gross annual rates,
respectively. These net annual rates of return reflect the trust and separate
account level charges but they do not reflect the charges we deduct from your
account value annually for the optional Guaranteed minimum death benefit,
Protection Plus benefit and the Guaranteed minimum income benefit features, as
well as the annual administrative charge. If the net annual rates of return did
reflect these charges, the net annual rates of return would be lower; however,
the values shown in the following tables reflect all contract charges. The
values shown under "Lifetime annual guaranteed minimum income benefit" reflect
the lifetime income that would be guaranteed if the Guaranteed minimum income
benefit is selected at that contract anniversary. An "N/A" in these columns
indicates that the benefit is not exercisable in that year. A "0" under any of
the death benefit and/or "Lifetime annual guaranteed minimum income benefit"
columns indicates that the contract has terminated due to insufficient account
value and, consequently, the guaranteed benefit has no value.
With respect to fees and expenses deducted from assets of the underlying
portfolios, the amounts shown in all tables reflect (1) investment management
fees equivalent to an effective annual rate of 0.74%, and (2) an assumed
average asset charge for all other expenses of the underlying portfolios
equivalent to an effective annual rate of 0.39% and (3) 12b-1 fees equivalent
to an effective annual rate of 0.25%. These rates are the arithmetic average
for all portfolios that are available as investment options. In other words,
they are based on the hypothetical assumption that account values are allocated
equally among the variable investment options. The actual rates associated with
any contract will vary depending upon the actual allocation of policy values
among the investment options. These rates do not reflect expense limitation
arrangements in effect with respect to certain of the underlying portfolios as
described in the footnotes to the fee table for the underlying portfolios in
"Fee Table" earlier in this prospectus. With these arrangements, the charges
shown above would be lower. This would result in higher values than those shown
in the following tables.
Because your circumstances will no doubt differ from those in the illustrations
that follow, values under your contract will differ, in most cases
substantially. Upon request, we will furnish you with a personalized
illustration.
Appendix IV: Hypothetical Illustrations D-1
Variable deferred annuity
Accumulator(R) Plus(SM)
$100,000 Single contribution and no withdrawals
Male, issue age 60
Benefits:
Greater of 5% Roll up to age 85 and the Annual Ratchet to age 85 Guaranteed
minimum death benefit
Protection Plus
Guaranteed minimum income benefit
Greater of 5%
Roll up to age 85
and the Annual
Ratchet to age 85
Guaranteed minimum
Account value Cash value death benefit
------------------- --------------------- ----------------------
Age Contract year 0% 6% 0% 6% 0% 6%
- ------ -------------- --------- --------- ----------- --------- --------- ------------
60 1 104,000 104,000 96,000 96,000 100,000 100,000
61 2 99,580 105,790 91,580 97,790 105,000 105,790
62 3 95,246 107,583 88,246 100,583 110,250 110.250
63 4 90,992 109,368 83,992 102,368 115,763 115,763
64 5 86,813 111,141 80,813 105,141 121,551 121,551
65 6 82,703 112,901 77.703 107,901 127,628 127,628
66 7 78,658 114,643 74,658 110,643 134,010 134,010
67 8 74,671 116,363 71,671 113,363 140,710 140,710
68 9 70,738 118,057 70,738 118,057 147,746 147,746
69 10 66,853 119,720 66,853 119,720 155,133 155,133
74 15 47,954 127,407 47,954 127,407 197,993 197,993
79 20 29,285 133,473 29,285 133,473 252,695 252,695
84 25 10,273 136,920 10,273 136,920 322,510 322,510
89 30 0 146,078 0 146,078 338,635 338,635
94 35 0 158,665 0 158,665 338,635 338,635
95 36 0 161,397 0 161,397 338,635 338,635
Lifetime annual guaranteed
minimum income benefit
--------------------------------------
Total death benefit
with Protection Guaranteed Hypothetical
Plus income income
------------------- ----------------- --------------------
Age 0% 6% 0% 6% 0% 6%
- ------ --------- --------- -------- -------- -------- -----------
60 100,000 100,000 N/A N/A N/A N/A
61 107,000 108,106 N/A N/A N/A N/A
62 114,350 114,350 N/A N/A N/A N/A
63 122,068 122,068 N/A N/A N/A N/A
64 130,171 130,171 N/A N/A N/A N/A
65 138,679 138,679 N/A N/A N/A N/A
66 147,613 147,613 N/A N/A N/A N/A
67 156,994 156,994 N/A N/A N/A N/A
68 166,844 166,844 N/A N/A N/A N/A
69 177,186 177,186 N/A N/A N/A N/A
74 237,190 237,190 12,493 12,493 12,493 12.493
79 313,773 313,773 17,032 17,032 17,032 17,032
84 388,642 388,642 27,736 27,736 27,736 27,736
89 0 404,767 N/A N/A N/A N/A
94 0 404,767 N/A N/A N/A N/A
95 0 404,767 N/A N/A N/A N/A
The hypothetical investment results are illustrative only and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown and will depend on a number of
factors, including investment allocations made by the owner. The account value,
cash value and guaranteed benefits for a contract would be different from the
ones shown if the actual gross rate of investment return averaged 0% or 6% over
a period of years, but also fluctuated above or below the average for
individual contract years. We can make no representation that these
hypothetical investment results can be achieved for any one year or continued
over any period of time. In fact, for any given period of time, the investment
results could be negative.
D-2 Appendix IV: Hypothetical Illustrations
Appendix V: Guaranteed principal benefit example
- --------------------------------------------------------------------------------
For purposes of these examples, we assume that there is an initial contribution
of $100,000, made to the contract on February 14, 2003. We also assume that no
additional contributions, no transfers among options and no withdrawals from
the contract are made. For GPB Option 1, the example also assumes that a 10
year fixed maturity option is chosen. The hypothetical gross rates of return
with respect to amounts allocated to the variable investment options are 0%, 6%
and 10%. The numbers below reflect the deduction of all applicable separate
account and contract charges, and also reflect the charge for GPB Option 2.
Also, for any given performance of your variable investment options, GPB Option
1 produces higher account values than GPB Option 2 unless investment
performance has been significantly positive. The examples should not be
considered a representation of past or future expenses. Similarly, the annual
rates of return assumed in the example are not an estimate or guarantee of
future investment performance.
----------------------------------------------------------------------------------------------------
Assuming
100% in the
Assuming variable
100% in the Under GPB Under GPB investment
FMO Option 1 Option 2 options
----------------------------------------------------------------------------------------------------
Amount allocated to FMO on February 14, 2003 104,000 68,962 36,400 0
based upon a 4.19% rate to maturity
----------------------------------------------------------------------------------------------------
Initial account value allocated to the variable 0 35,038 67,600 104,000
investment options on February 14, 2003
----------------------------------------------------------------------------------------------------
Account value in the fixed maturity option on 156,834 104,000 54,892 0
February 14, 2013
----------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 156,834 130,240 101,039* 77,886
together the value at the maturity date of the
applicable fixed maturity option plus the value
of amounts in the variable investment options
on February 14, 2013, assuming a 0% gross
annual rate of return)
----------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 156,834 151,778 139,999* 141,816
together the value at the maturity date of the
applicable fixed maturity option plus the value
of amounts in the variable investment options
on February 14, 2013, assuming a 6% gross
annual rate of return)
----------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 156,834 173,897 180,105* 207,470
together the value at the maturity date of the
applicable fixed maturity option plus the value
of amounts in the variable investment options
on February 14, 2013, assuming a 10% gross
annual rate of return)
----------------------------------------------------------------------------------------------------
* Since the annuity account value is greater than the alternate benefit under
GPB Option 2, GPB Option 2, will not affect the annuity account value.
Appendix V: Guaranteed principal benefit example E-1
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 15
Custodian and Independent Accountants 15
Yield Information for the EQ/Money Market Option, EQ/Alliance Quality Bond
Option and AXA Premier VIP High
Yield Option 15
Distribution of the Contracts 16
Financial Statements 17
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 September 15, 2003.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
(SAI 10AMLF(05/03))
X00564/Plus '04 Series
Equitable Accumulator(R) Plus(SM)
A variable deferred annuity contract
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 15, 2003
The Equitable Life Assurance Society
of the United States
1290 Avenue of the Americas
New York, New York 10104
- --------------------------------------------------------------------------------
This Statement of Additional Information ("SAI") is not a Prospectus. It should
be read in conjunction with the related Equitable Accumulator(R) Plus(SM)
Prospectus, dated September 15, 2003. That Prospectus provides detailed
information concerning the contracts and the variable investment options, the
fixed maturity options and the guaranteed interest option that fund the
contracts. Each variable investment option is a subaccount of Equitable Life's
Separate Account No. 49. Definitions of special terms used in the SAI are found
in the Prospectus.
A copy of the Prospectus is available free of charge by writing the processing
office (Post Office Box 1547, Secaucus, NJ 07096-1547), by calling
1-800-789-7771 toll free, or by contacting your financial professional.
TABLE OF CONTENTS
Tax Information 2
Unit Values 15
Custodian and Independent Accountants 15
Yield Information for the EQ/Money Market
Option, EQ/Alliance Quality Bond Option and
AXA Premier VIP High Yield Option 15
Distribution of the Contracts 16
Financial Statements 17
Copyright 2003 The Equitable Life Assurance Society of the United States
All rights reserved. Accumulator(R) is a registered service mark and Plus(SM) is
a service mark of The Equitable Life Assurance Society of the United States.
SAI 10ACS Accumulator(R) '04/Plus(SM)
x00570
TAX INFORMATION
Individual retirement arrangements (IRAs)
This section of the SAI contains the information that the IRS requires you to
have before you purchase an IRA. This section of the SAI covers some of the
special tax rules that apply to IRAs. The next section covers Roth IRAs. 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.
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.
The address of the processing office is as follows:
By regular mail:
Equitable Accumulator(R) Plus(SM)
P.O. Box 1547
Secaucus, NJ 07096-1547
By express delivery:
Equitable Accumulator(R) Plus(SM)
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
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.
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,
whichever applies. Our processing office, or your financial professional, can
provide you with the cancellation instructions.
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, 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.
We have not applied for an opinion letter from the IRS to approve the
respective forms of the Equitable Accumulator(R) Plus(SM) traditional and Roth
IRA contracts for use as a traditional and Roth IRA, respectively. We have
received IRS opinion letters approving the respective forms of a similar
traditional IRA and Roth IRA endorsement for use as a traditional 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 contracts submitted for IRS approval do not include every
feature possibly available under the Equitable Accumulator(R) Plus(SM)
traditional and Roth IRA contracts.
Protection Plus feature
The Protection Plus feature is offered for IRA contracts, subject to state and
contract availability. We have received IRS opinion letters that the contract
with a similar Protection Plus feature qualifies 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 contracts
submitted for IRS approval do not include every feature possibly available
under the Equitable Accumulator(R) Plus(SM) traditional and Roth IRA contracts.
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.
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;
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
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 the taxable year 2003. This
amount stays the same for 2004. When
2
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. If you reach age 50
before the close of the taxable year for which you are making a regular
contribution to your IRA, you may be eligible to make an additional "catch up
contribution" of up to $500 to your traditional IRA. This amount is the same
for both taxable years 2003 and 2004.
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 discussed below). Even if one spouse has no compensation or
compensation under $3,000, married individuals filing jointly can contribute up
to $6,000 for 2003 to any combination of traditional IRAs and Roth IRAs. This
amount stays the same for 2004. (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
nonworking spouse until the year in which the nonworking 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 the taxable year
for which the contribution is made.
Deductibility of contributions. The amount of traditional IRA contributions
that you can deduct for a taxable 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 the
taxable year up to the maximum amount discussed earlier in this section under
"Limits on contributions". That is, for each of the taxable years 2003 and
2004, your fully deductible contribution can be 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.
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.
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 contributions to your traditional IRAs.
If you are 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 $40,000 and $50,000 in 2003 and AGI between $45,000 and $55,000 in
2004. In 2005 the deduction will phase out for AGI between $50,000 and $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 $60,000 and $70,000 in 2003 and AGI
between $65,000 and $75,000 in 2004. This range will increase every year until
2007 when the deduction will phase out for AGI between $80,000 and $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 an AGI
between $150,000 and $160,000.
To determine the deductible amount of the contribution for 2003, for example,
you determine AGI and subtract $40,000 if you are single, or $60,000 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, contribution
if applicable) limit
Additional "Saver's Credit" for contributions to a traditional IRA or Roth IRA
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 18 or over
before the end of the taxable year for which the contribution is made. 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.
3
Nondeductible regular 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 nonworking spouse's traditional IRA) may not, however, exceed the maximum
$3,000 per person limit for the applicable taxable year (2003 or 2004). The
dollar limit is $3,500 for people eligible to make ages 50-70-1/2 catch-up
contributions. See "Excess contributions" later in this section. 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" later in
this section.
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 regular contributions. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make
your regular traditional IRA contributions for a taxable 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;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Direct transfer contributions may only be made 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
Your plan administrator will tell you whether or not your distribution is
eligible to be rolled over. Spousal beneficiaries and spousal alternate payees
under qualified domestic relations orders may roll over funds on the same basis
as the plan participant.
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 eligible retirement plan 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 trustee or custodian of the eligible retirement plan 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 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 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 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.
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 different type of eligible
retirement plan such as a traditional IRA, and subsequently take a premature
distribution.
Rollovers of after-tax contributions from eligible retirement plans other than
traditional IRAs
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 section under "Withdrawals, payments and
transfers of funds out of traditional IRAs." After-tax contributions in a
traditional IRA cannot be rolled over from your traditional IRA into, or back
into, a qualified plan, TSA or governmental 457(b) plan.
4
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 the applicable taxable year,
2003 or 2004 (or $3,500 if you are ages 50-70-1/2); or
o regular contributions of more than earned income for the year, if that
amount is under $3,000 for the applicable taxable year, 2003 or 2004 (or
$3,500 if you are ages 50-70-1/2); or
o regular contributions to a traditional IRA made after you reach age 70-1/2;
or
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 later in this section under "Early distribution
penalty tax." 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.
Recharacterizations
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
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. We
report all payments from traditional IRA contracts on IRS Form 1099R as fully
taxable.
If you have ever made nondeductible IRA contributions to any traditional IRA
(it does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. It is your responsibility to keep permanent tax records of all
of your nondeductible contributions to traditional IRAs so that you can
correctly report the taxable amount of any distribution on your own tax return.
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.
A distribution from a traditional IRA is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" earlier in this section; 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 "Rollovers and transfer contributions to traditional IRAs" earlier
in this section.)
The following are eligible to receive rollovers of distributions from a
traditional IRA: a qualified plan, a TSA or a governmental 457(b) 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
457(b) 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.
5
Distributions from a traditional IRA are not eligible for favorable ten-year
averaging or long-term capital gain treatment available under limited
circumstances for 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
Background on Regulations -- Required Minimum Distri-butions. Distributions
must be made from traditional IRAs according to rules contained in the Code and
Treasury Regulations. Treasury Regulations on required minimum distributions
were proposed in 1987, revised in 2001 and finalized in 2002. The 2002 final
Regulations apply beginning in January 2003. The 2002 final Regulations include
Temporary Regulations applicable to annuity contracts. Certain provisions of
the Temporary Regulations concerning the actuarial value of additional contract
benefits which could have increased the amount required to be distributed from
contracts have been suspended for 2003. However, these or similar provisions
may apply in future years. Under transitional rules, the 1987 and 2001 proposed
regulations may continue to apply to annuity payments. Please consult your tax
advisor concerning applicability of these complex rules to your situation.
Lifetime required minimum distributions. You must start taking annual
distributions from your traditional IRAs for the year in which you turn 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,
determined in accordance with IRS tables.
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, determined in
accordance with IRS tables.
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 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? We will only pay you automatically if you affirmatively
select an annuity payout option or an account-based withdrawal option such as
our "automatic required minimum distribution (RMD) service." Even if you do not
enroll in our service, we will calculate the amount of the required minimum
distribution withdrawal for you, if you so request in writing. However, in that
case you will be responsible for asking us to pay the required minimum
distribution withdrawals to you.
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 particular 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 you are within the age group which must
take lifetime required minimum distributions. 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 depending on whether you die before or after your Required Beginning Date
for lifetime required minimum distribution payments, and the status of your
beneficiary. The following
6
assumes that you have not yet elected an annuity-based payout at the time of
your death. If you elect an annuity-based payout, payments (if any) after your
death must be made at least as rapidly as when you were alive.
Individual beneficiary. Regardless of whether your death occurs before or after
your Required Beginning Date, 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 IRS-provided 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 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 calendar year which contains the
fifth anniversary 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 may 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 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 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 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 rules continue to apply the 5-year rule discussed earlier under
"Individual beneficiary." Please note that we need an individual annuitant to
keep an annuity contract in force. If the beneficiary is not an individual, we
must distribute amounts remaining in the annuity contract after the death of
the annuitant.
Successor owner and annuitant
If your spouse is the sole primary beneficiary and elects to become the
successor owner and annuitant, 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 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; or
o because you are disabled (special federal income tax definition); or
o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition); or
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 expectancies) using an
IRS-approved distribution method.
To meet this last exception, you could elect to apply your contract value to an
Income Manager(R) (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
using your choice of IRS-approved methods we offer. Although substantially
equal withdrawals and Income Manager payments are not subject to the 10%
penalty tax, they are taxable as discussed in "Withdrawals, payments and
transfers of funds out of traditional IRAs" earlier in this section. Once
substantially equal withdrawals or Income Manager annuity payments begin, the
distributions should not be stopped or changed until after the later of your
reaching age 59-1/2 or five years after the date of the first dis-
7
tribution or the penalty tax, including an interest charge for the prior
penalty avoidance, may apply to all prior distributions under either option.
Also, it is possible that the IRS could view any additional withdrawal or
payment you take from your contract as changing your pattern of substantially
equal withdrawals or Income Manager payments for purposes of determining
whether the penalty applies.
Roth individual retirement annuities (Roth IRAs)
This section of the SAI covers some of the special tax rules that apply to Roth
IRAs. If the rules are the same as those that apply to the traditional IRA, we
will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator(R) Plussm Roth Conversion IRA contract is designed to
qualify as a Roth individual retirement annuity under Sections 408A(b) and
408(b) of the Internal Revenue Code.
Contributions to Roth IRAs
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Regular after-tax, direct transfer and rollover contributions may be made to a
Roth Conversion IRA contract. See "Rollovers and direct transfers" later in
this section. If you use the forms we require, we will also accept traditional
IRA funds which are subsequently recharacterized as Roth IRA funds following
special federal income tax rules.
Regular contributions to Roth IRAs
Limits on regular contributions. Generally, $3,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) for taxable year 2003.
This amount stays the same for 2004. This limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a Roth IRA. Any
contributions to Roth IRAs reduce your ability to contribute to traditional
IRAs and vice versa. When your earnings are below $3,000, your earned income or
compensation for the year is the most you can contribute. 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 Roth IRAs and traditional IRAs. See the discussion earlier in this
section under traditional IRAs. If you or your spouse are at least age 50 at
any time during the taxable year for which you are making a regular
contribution, additional catch-up contributions totaling up to $500 can be made
for the taxable year. This amount is the same for both taxable years 2003 and
2004.
With a Roth IRA, you can make regular contributions when you reach age 70-1/2,
as long as you have sufficient earnings. But, you cannot make contributions,
regardless of your age, for any year that:
o your federal income tax filing status is "married filing jointly" and your
modified adjusted gross income is over $160,000; or
o your federal income tax filing status is "single" and your modified
adjusted gross income is over $110,000.
However, you can make regular Roth IRA contributions in reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
modified adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your modified
adjusted gross income is between $95,000 and $110,000.
If you are married and filing separately and your modified adjusted gross
income is between $0 and $10,000 the amount of regular contributions you are
permitted to make is phased out. If your modified adjusted gross income is more
than $10,000 you cannot make regular Roth IRA contributions.
When you can make contributions. Same as traditional IRAs.
Deductibility of contributions. Roth IRA contributions are not tax deductible.
Rollovers and direct transfers
What is the difference between rollover and direct transfer transactions? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE IRA (after a
two-year rollover limitation period for SIMPLE IRA funds), in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, a TSA under Section 403(b) of the
Internal Revenue Code or any other eligible retirement plan. You may make
direct transfer contributions to a Roth IRA only from another Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following: in a rollover transaction you actually take possession of the
funds rolled over or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee or issuer to transfer the first Roth IRA funds directly
to the recipient Roth IRA custodian, trustee or issuer. You can make direct
transfer transactions only between identical plan types (for example, Roth IRA
to Roth IRA). You can also make rollover transactions between identical plan
types. However, you can only use rollover transactions between different plan
types (for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth
8
IRA, you must do so within 60 days after you receive the proceeds from the
original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth 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.
Conversion contributions to Roth IRAs
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover transaction
is not tax free. Instead, the distribution from the traditional IRA is
generally fully taxable. For this reason, we are required to withhold 10%
federal income tax from the amount converted unless you elect out of such
withholding. If you have ever made nondeductible regular contributions to any
traditional IRA -- whether or not it is the traditional IRA you are converting
- -- a pro rata portion of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59-1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your modified adjusted gross income exceeds $100,000. For this purpose,
your modified adjusted gross income is calculated without the gross income
stemming from the traditional IRA conversion. You also cannot make conversion
contributions to a Roth IRA for any taxable year in which your federal income
tax filing status is "married filing separately."
You cannot make conversion contributions to a Roth IRA to the extent that the
funds in your traditional IRA are subject to the annual required minimum
distribution rule applicable to traditional IRAs beginning at age 70-1/2.
You cannot convert and reconvert an amount during the same taxable year, or if
later, during the 30-day period following a recharacterization. If you
reconvert during either of these periods, it will be a failed Roth IRA
conversion.
Recharacterizations
You may be able to treat a contribution made to one type of IRA as having been
made to a different type of IRA. This is called recharacterizing the
contribution.
How to recharacterize. To recharacterize a contribution, you generally must
have the contribution transferred from the first IRA (the one to which it was
made) to the second IRA in a deemed trustee-to-trustee transfer. If the
transfer is made by the due date (including extensions) for your tax return for
the year during which the contribution was made, you can elect to treat the
contribution as having been originally made to the second IRA instead of to the
first IRA. It will be treated as having been made to the second IRA on the date
that it was actually made to the first IRA. You must report the
recharacterization and must treat the contribution as having been made to the
second IRA, instead of the first IRA, on your tax return for the year during
which the contribution was made.
The condition will not be treated as having been made to the second IRA unless
the transfer includes any net income allocable to the contribution. You can
take into account any loss on the contribution while it was in the IRA when
calculating the amount that must be transferred. If there was a loss, the net
income you must transfer may be a negative amount.
No deduction is allowed for the contribution to the first IRA and any net
income transferred with the recharacterized contribution is treated as earned
in the second IRA. The contribution will not be treated as having been made to
the second IRA to the extent any deduction was allowed with respect to the
contribution to the first IRA.
For recharacterization purposes, a distribution from a traditional IRA that is
received in one tax year and rolled over into a Roth IRA in the next year, but
still within 60 days of the distribution from the traditional IRA, is treated
as a contribution to the Roth IRA in the year of the distribution from the
traditional IRA.
Roth IRA conversion contributions from a SEP-IRA or SIMPLE IRA can be
recharacterized to a SEP-IRA or SIMPLE IRA (including the original SEP-IRA or
SIMPLE-IRA).
To recharacterize a contribution, you must use our forms.
The recharacterization of a contribution is not treated as a rollover for
purposes of the 12-month period described above. This rule applies even if the
contribution would have been treated as a rollover contribution by the second
IRA if it had been made directly to the second IRA rather than as a result of a
recharacterization of a contribution to the first IRA.
Withdrawals, payments and transfers of funds out of Roth IRAs
No federal income tax law restrictions on withdrawals. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
Distributions from Roth IRAs
Distributions include withdrawals from your contract, surrender of your
contract and annuity payments from your contract. Death benefits are also
distributions.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled
to the special favorable ten-year averaging and long-term capital gain
treatment available in certain limited cases to distributions from qualified
plans.
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The following distributions from Roth IRAs are free of income tax:
o rollovers from a Roth IRA to another Roth IRA;
o direct transfers from a Roth IRA to another Roth IRA;
o qualified distributions from a Roth IRA; and
o return of excess contributions or amounts recharacterized to a traditional
IRA.
Qualified distributions from Roth IRAs. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you are age 59-1/2 or older; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time home buyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable-year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or
not the one from which the distribution is being made).
Nonqualified distributions from Roth IRAs. Nonqualified distributions from Roth
IRAs are distributions that do not meet both the qualifying event and five-year
aging period tests described above. If you receive such a distribution, part of
it may be taxable. For purposes of determining the correct tax treatment of
distributions (other than the withdrawal of excess contributions and the
earnings on them) there is a set order in which contributions (including
conversion contributions) and earnings are considered to be distributed from
your Roth IRA. The order of distributions is as follows:
(1) Regular contributions.
(2) Conversion contributions, on a first-in-first-out basis (generally,
total conversions from the earliest year first). These conversion
contributions are taken into account as follows:
(a) Taxable portion (the amount required to be included in gross
income because of conversion) first, and then the
(b) Nontaxable portion.
(3) Earnings on contributions.
Rollover contributions from other Roth IRAs are disregarded for this purpose.
To determine the taxable amount distributed, distributions and contributions
are aggregated or grouped together as follows:
(1) All distributions made during the year from all Roth IRAs you maintain
-- with any custodian or issuer -- are added together.
(2) All regular contributions made during and for the year (contributions
made after the close of the year, but before the due date of your return)
are added together. This total is added to the total undistributed regular
contributions made in prior years.
(3) All conversion contributions made during the year are added together.
For purposes of the ordering rules, in the case of any conversion in which
the conversion distribution is made in 2003 and the conversion
contribution is made in 2004, the conversion contribution is treated as
contributed prior to other conversion contributions made in 2004.
Any recharacterized contributions that end up in a Roth IRA are added to the
appropriate contribution group for the year that the original contribution
would have been taken into account if it had been made directly to the Roth
IRA.
Any recharacterized contribution that ends up in an IRA other than a Roth IRA
is disregarded for the purpose of grouping both contributions and
distributions. Any amount withdrawn to correct an excess contribution
(including the earnings withdrawn) is also disregarded for this purpose.
Required minimum distributions during life
Lifetime required minimum distributions do not apply.
Required minimum distributions at death
Same as traditional IRA under "What are the required minimum distribution
payments after you die?"
Payments to a beneficiary after your death
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
Borrowing and loans are prohibited transactions
Same as traditional IRA.
Excess contributions
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your modified adjusted gross income is in excess of $100,000 in the conversion
year).
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
Early distribution penalty tax
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
Tax-Sheltered Annuity contracts (TSAs)
General
This section of the SAI covers some of the special tax rules that apply to TSA
contracts under Section 403(b) of the Internal Revenue Code
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(TSAs). If the rules are the same as those that apply to another kind of
contract, for example, traditional IRAs, we will refer you to the same topic
under "traditional IRAs."
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(SM) feature
The Protection Plus feature is offered for Rollover TSA contracts, subject to
state and contract availability. 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, the IRS has not
specifically addressed this question. 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 establish your Rollover TSA
contract:
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;
and
o a rollover from another 403(b) arrangement.
If you make a direct transfer, you must fill out our transfer form.
We do not accept after-tax contribution rollovers to the Accumulator(R) Plus(SM)
Rollover TSA.
Employer-remitted contributions. The Rollover TSA contract does not accept
employer-remitted contributions. However, we provide the following discussion
as part of our description of restrictions on the distribution of funds
directly transferred, which include employer-remitted contributions to other
TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll are
subject to annual limits. (Tax-free direct transfer contributions from another
403(b) arrangement and rollover contributions from another eligible retirement
plan are not subject to these annual contribution limits.) Commonly, some or
all of the contributions made to a TSA are made under a salary reduction
agreement between the employee and the employer. These contributions are called
"salary reduction" or "elective deferral" contributions. However, a TSA can
also be wholly or partially funded through non-elective employer contributions
or after-tax employee contributions. Amounts attributable to salary reduction
contributions to TSAs are generally subject to withdrawal restrictions. Also,
all amounts attributable to investments in a 403(b)(7) custodial account are
subject to withdrawal restrictions discussed below.
Rollover or direct transfer contributions. Once you establish your Rollover TSA
contract with 403(b)-source funds, you may make subsequent rollover
contributions to your Rollover TSA contract from these sources: qualified
plans, governmental 457(b) plans and traditional IRAs, as well as other TSAs
and 403(b) arrangements. All rollover contributions must be pre-tax funds only
with appropriate documentation satisfactory to us.
Generally, you may make a rollover contribution to your TSA when you have a
distributable event from an existing TSA or other eligible retirement plan as a
result of your:
o termination of employment with the employer who provided the funds for the
plan; or
o reaching age 59-1/2 even if you are still employed; or
o disability (special federal income tax definition).
You can roll over pre-tax funds from traditional IRA to a TSA at any time.
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 different type of eligible
retirement plan and subsequently take a premature distribution.
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. For example, the transferring TSA may be subject to Title I of
ERISA if the employer makes matching contributions to salary reduction
contributions made by employees. In that case, the employer must continue to
approve distributions from the plan or contract.
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Your contribution to the Rollover TSA must be net of the required minimum
distribution for the tax year in which we issue the contract if:
o you are or will be at least age 70-1/2 in the current calendar year, and
o you have retired from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA or eligible retirement
plan; or
o direct rollover from another TSA or eligible retirement plan; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
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.
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).
If any portion of the funds directly transferred to your TSA contract is
attributable to the amounts that you invested in a 403(b)(7) custodial account,
such amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to
your TSA contract that represents your December 31, 1988, account balance
attributable to salary reduction contributions to a TSA annuity contract and
earnings. To take advantage of this grandfathering, you must properly notify us
in writing at our processing office of your December 31, 1988, account balance
if you have qualifying amounts transferred to your TSA contract.
This paragraph applies only to participants in a Texas Optional Retirement
Program. Texas Law permits withdrawals only after one of the following
distributable events occurs:
(1) the requirements for minimum distribution (discussed under "Required
minimum distributions" later in this section) are met; or
(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgment from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an
employer's first-year matching contributions. We reserve the right to change
these provisions without your consent, but only to the extent necessary to
maintain compliance with applicable law. Loans are not permitted under Texas
Optional Retirement Programs.
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 section. 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 accept
after-tax funds, we do not track your investment in the contract, if any. We
will report all distributions from this Rollover TSA as fully taxable. It is
your responsibility to determine how much of the distribution is taxable.
Distributions before annuity payments begin. On a total surrender, the amount
received in excess of the investment in the contract is taxable. The amount of
any partial distribution from a TSA prior to the annuity starting date is
generally taxable, except to the extent that the distribution is treated as a
withdrawal of after-tax contributions. Distributions are normally treated as
pro rata withdrawals of any after-tax contributions and earnings on those
contributions.
Annuity payments. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded
from income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed
on your (or your beneficiary's) final tax return.
Payments to a beneficiary after your death. Death benefit distributions from a
TSA generally receive the same tax treatment as distribution during your
lifetime. In some instances, distributions from a TSA made to your surviving
spouse may be rolled over to a traditional IRA or other eligible retirement
plan.
Loans from TSAs. You may take loans from a TSA unless restricted by the
employer (for example, under an employer plan subject to
12
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 are generally not treated as a taxable distribution. If the amount of the
loan when made exceeds permissible limits under federal income tax rules, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. The entire unpaid balance of the
loan is includable in income in the year of the default.
TSA loans are subject to federal income tax limits and may also be subject to
limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example, loans
offered by TSAs are subject to the following conditions:
o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeit
able accrued benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding
loan balance over the previous twelve months over the
outstanding loan balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. Rollover TSA
contracts have a term limit of 10 years for loans used to acquire the
participant's primary residence.
o All principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly. In very limited circumstances, the repayment obligation may be
temporarily suspended during a leave of absence.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as
a distribution.
Tax-deferred rollovers and direct transfers. You may roll over an "eligible
rollover distribution" from a TSA into another eligible retirement plan which
agrees to accept the rollover. The rollover may be a direct rollover or one you
do yourself within 60 days after you receive the distribution. To the extent
rolled over, a distribution remains tax-deferred.
You may roll over a distribution from a TSA to any of the following: a
qualified plan, a governmental 457(b) plan (separate accounting required) or a
traditional IRA. A spousal beneficiary may also roll over death benefits as
above.
The taxable portion of most distributions will be eligible for rollover except
as specifically excluded under federal income tax rules. Distributions that you
cannot roll over generally include periodic payments for life or for a period
of 10 years or more, hardship withdrawals and required minimum distributions
under federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
Required minimum distributions
Generally the same as traditional IRA with these differences:
When you have to take the first required minimum distribution. The minimum
distribution rules force TSA participants to start calculating and taking
annual distribution from their TSAs by a required date. Generally you must take
the first required minimum distribution for the calendar year in which you turn
age 70-1/2. You may be able to delay the start of required minimum
distributions for all or part of your account balance until after age 70-1/2,
as follows:
o For TSA participants who have not retired from service with the employer
who provided the funds for the TSA by the calendar year the participant
turns age 70-1/2, the required beginning date for minimum distribution is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distribution to age 75 of the portion of their account value attributable
to their December 31, 1986, TSA account balance, even if retired at age
70-1/2. We will know whether or not you qualify for this exception because
it will only apply to people who establish their Rollover TSA by direct
Revenue Ruling 90-24 transfers. If you do not give us the amount of your
December 31, 1986, account balance that is being transferred to the
Rollover TSA on the form used to establish the TSA, you do not qualify.
Spousal consent rules
This will only apply to you if you establish your Rollover TSA by direct
Revenue Ruling 90-24 transfer. Your employer will tell us on the form used to
establish the TSA whether or not you need to get spousal consent for loans,
withdrawals or other distributions. If you do, you will need such consent if
you are married when you request a withdrawal under the TSA contract. In
addition, unless you elect otherwise with the written consent of your spouse,
the retirement benefits payable under the plan must be paid in the form of a
qualified joint and survivor annuity. A qualified joint and survivor annuity is
payable for the life of the annuitant with a survivor annuity for the life of
the spouse in an amount not less than one-half of the amount payable to the
annuitant
13
during his or her lifetime. In addition, if you are married, the beneficiary
must be your spouse, unless your spouse consents in writing to the designation
of another beneficiary.
If you are married and you die before annuity payments have begun, payments
will be made to your surviving spouse in the form of a life annuity unless at
the time of your death a contrary election was in effect. However, your
surviving spouse may elect, before payments begin, to receive payments in any
form permitted under the terms of the TSA contract and the plan of the employer
who provided the funds for the TSA.
Early distribution penalty tax
A penalty tax of 10% of the taxable portion of a distribution applies to
distribution from a TSA before you reach age 59-1/2. This is in addition to any
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 to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout 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 expectancies) using an IRS-approved
distribution method.
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 $15,840 in periodic annuity payments in
2003, 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.
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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 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 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.
UNIT VALUES
Unit values are determined at the end of each valuation period for each of the
variable investment options. We may offer other annuity contracts and
certificates which will have their own unit values for the variable investment
options. They may be different from the unit values for the Equitable
Accumulator(R) Plus(SM).
The unit value for a variable investment option for any valuation period is
equal to:
(i) the unit value for the preceding valuation period multiplied by (ii) the
net investment factor for that option for that valuation period. A valuation
period is each business day together with any preceding non-business days. The
net investment factor is:
( a/b ) - c
where:
(a) is the value of the variable investment option's shares of the
corresponding portfolio at the end of the valuation period. Any amounts
allocated to or withdrawn from the option for the valuation period are not
taken into account. For this purpose, we use the share value reported to
us by EQ Advisors Trust or AXA Premier VIP Trust (the "Trusts"), as
applicable.
(b) is the value of the variable investment option's shares of the
corresponding portfolio at the end of the preceding valuation period. (Any
amounts allocated or withdrawn for that valuation period are taken into
account.)
(c) is the daily mortality and expense risks charge, administrative charge,
and distribution charge relating to the contracts, times the number of
calendar days in the valuation period. These daily charges are at an
effective annual rate not to exceed a total of 1.50%.
CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable Life is the custodian for the shares of the Trusts owned by Separate
Account No. 49.
The financial statements of Separate Account No. 49 as of December 31, 2002 and
for the periods ended December 31, 2002 and 2001, and the consolidated
financial statements of Equitable Life as of December 31, 2002 and 2001 and for
each of the three years ended December 31, 2002 incorporated in this SAI have
been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
YIELD INFORMATION FOR THE EQ/MONEY MARKET OPTION, EQ/ALLIANCE QUALITY BOND
OPTION AND AXA PREMIER VIP HIGH YIELD OPTION
EQ/Money Market option
The EQ/Money Market option calculates yield information for seven-day periods.
The seven-day current yield calculation is based on a hypothetical contract
with one unit at the beginning of the period. To determine the seven-day rate
of return, the net change in the unit value is computed by subtracting the unit
value at the beginning of the period from a unit value, exclusive of capital
changes, at the end of the period.
The net change is then reduced by the average administrative charge factor
(explained below). This reduction is made to recognize the deduction of the
annual administrative charge under the contracts, which is not reflected in the
unit value.
Unit values reflect all other accrued expenses of the EQ/Money Market option
but do not reflect any withdrawal charges or charges for applicable taxes such
as state or local premium taxes.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain what is called the adjusted base period rate of return. This
seven-day adjusted base period return is then multiplied by 365/7 to produce an
annualized seven-day current yield figure carried to the nearest one-hundredth
of one percent.
The actual dollar amount of the annual administrative charge that is deducted
from the EQ/Money Market option will vary for each contract depending upon the
percentage of the account value allocated to the EQ/Money Market option. To
determine the effect of the annual administrative charge on the yield, we start
with the total dollar amounts of the charges deducted from the option during
the
15
12-month period ending on the last day of the prior year. The amount is
multiplied by 7/365 to produce an average administrative charge factor which is
used in all weekly yield computations for the ensuing year. The average
administrative charge factor is then divided by the number of EQ/Money Market
units as of the end of the prior calendar year, and the resulting quotient is
deducted from the net change in unit value for the seven-day period.
The effective yield is obtained by modifying the current yield to take into
account the compounding nature of the EQ/Money Market option's investments, as
follows: the unannualized adjusted base period return is compounded by adding
one to the adjusted base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result, i.e., effective yield =
(base period return + 1 )365/7 - 1. The EQ/Money Market option yields will
fluctuate daily. Accordingly, yields for any given period do not necessarily
represent future results. In addition, the value of units of the EQ/Money
Market option will fluctuate and not remain constant.
EQ/Alliance Quality Bond and AXA Premier VIP High Yield options
The EQ/Alliance Quality Bond and AXA Premier VIP High Yield options calculate
yield information for 30-day periods. The 30-day current yield calculation is
based on a hypothetical contract with one unit at the beginning of the period.
To determine the 30-day rate of return, the net change in the unit value is
computed by subtracting the unit value at the beginning of the period from a
unit value, exclusive of capital changes, at the end of the period.
The net change is then reduced by the average administrative charge factor
(explained below). This reduction is made to recognize the deduction of the
annual administrative charge under the contracts, which is not reflected in the
unit value.
Unit values reflect all other accrued expenses of each option but do not
reflect any withdrawal charges or charges for applicable taxes such as state or
local premium taxes.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain the adjusted base period rate of return. This 30-day adjusted
base period return is then multiplied by 365/30 to produce an annualized 30-day
current yield figure carried to the nearest one-hundredth of one percent.
The actual dollar amount of the annual administrative charge that is deducted
from each option will vary for each contract depending upon the percentage of
the account value allocated to each option. To determine the effect of the
annual administrative charge on the yield, we start with the total dollar
amounts of the charges deducted from the option during the 12-month period
ending on the last day of the prior year. The amount is multiplied by 30/365 to
produce an average administrative charge factor which is used in all 30-day
yield computations for the ensuing year. The average administrative charge
factor is then divided by the number of option units as of the end of the prior
calendar year, and the resulting quotient is deducted from the net change in
unit value for the 30-day period.
The yield for each option will fluctuate daily. Accordingly, the yield for any
given period does not necessarily represent future results. In addition, the
value of option units of will fluctuate and not remain constant.
Other yield information
The yields for the EQ/Money Market option, EQ/Alliance Quality Bond option and
AXA Premier VIP High Yield option reflect charges that are not normally
reflected in the yields of other investments. Therefore, they may be lower when
compared with yields of other investments. The yields for the EQ/Money Market
option, EQ/Alliance Quality Bond option and AXA Premier VIP High Yield option
should not be compared to the return on fixed rate investments which guarantee
rates of interest for specified periods. Nor should the yields be compared to
the yields of money market options made available to the general public.
The seven-day current yield for the EQ/Money Market option was (0.743)% for the
period ended December 31, 2002. The effective yield for that period was
(0.740)%.
The effective yield for the EQ/Alliance Quality Bond option was 0.860% for the
30-day period ended December 31, 2002.
The effective yield for the AXA Premier VIP High Yield option was 8.965% for
the 30-day period ended December 31, 2002.
Because the above yields reflect the deduction of variable investment option
expenses, they are lower than the corresponding yield figures for the EQ/Money
Market, EQ/Alliance Quality Bond and AXA Premier VIP High Yield portfolios
which reflect only the deduction of EQ Advisors and AXA Premier VIP Trust-level
expenses.
DISTRIBUTION OF THE CONTRACTS
Under a distribution agreement between AXA Distributors, LLC, Equitable Life
and certain of Equitable Life's separate accounts, including Separate Account
No. 49, Equitable Life paid AXA Distributors, LLC distribution fees of
$149,380,289 for 2002, $219,355,297 for 2001 and $199,478,753 for 2000, as the
distributor of certain contracts, including these contracts, and as the
principal underwriter of several Equitable Life separate accounts, including
Separate Account No. 49. Of these amounts, for each of these three years, AXA
Distributors, LLC retained $59,543,803, $91,443,554 and $52,501,772,
respectively.
Pursuant to a Distribution and Servicing Agreement between AXA Advisors,
Equitable Life and certain of Equitable Life's separate accounts, including
Separate Account No. 49, Equitable Life paid AXA Advisors a fee of $325,380 for
each of the years 2002, 2001 and 2000. Equitable Life paid AXA Advisors, as the
distributors of certain contracts, including these contracts, and as the
principal underwriter of several Equitable Life separate accounts, including
Separate Account No. 49, $536,113,253 in 2002, $543,488,990 in 2001 and
16
$666,577,890 in 2000. Of these amounts, AXA Advisors retained $283,213,274,
$277,057,837 and $385,314,054, respectively.
FINANCIAL STATEMENTS
The consolidated financial statements of Equitable Life included herein should
be considered only as bearing upon the ability of Equitable Life to meet its
obligations under the contracts. Please note that the names of the
EQ/Aggressive Stock, EQ/High Yield and EQ/Balanced portfolios have been changed
to the AXA Premier VIP Aggressive Equity, AXA Premier VIP High Yield and AXA
Moderate Allocation portfolios, respectively.
The financial statements of Separate Account No. 49 list variable investment
options not currently offered under the contract.
17
Equitable Accumulator(R) Elite(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS SEPTEMBER 15, 2003
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, prospectuses that contain important
information about the Portfolios accompany this prospectus.
- --------------------------------------------------------------------------------
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 contracts or all states.
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Variable investment options
- --------------------------------------------------------------------------------
o AXA Aggressive Allocation* o EQ/Alliance Quality Bond
o AXA Conservative Allocation* o EQ/Alliance Small Cap Growth
o AXA Conservative-Plus Allocation* o EQ/Alliance Technology
o AXA Moderate Allocation* o EQ/Bernstein Diversified Value
o AXA Moderate-Plus Allocation* o EQ/Calvert Socially Responsible
o AXA Premier VIP Aggressive Equity o EQ/Capital Guardian International
o AXA Premier VIP Core Bond o EQ/Capital Guardian Research
o AXA Premier VIP Health Care o EQ/Capital Guardian U.S. Equity
o AXA Premier VIP High Yield o EQ/Emerging Markets Equity
o AXA Premier VIP International Equity o EQ/Equity 500 Index
o AXA Premier VIP Large Cap Core o EQ/Evergreen Omega
Equity o EQ/FI Mid Cap
o AXA Premier VIP Large Cap Growth o EQ/FI Small/Mid Cap Value
o AXA Premier VIP Large Cap Value o EQ/J.P. Morgan Core Bond
o AXA Premier VIP Small/Mid Cap Growth o EQ/Janus Large Cap Growth
o AXA Premier VIP Small/Mid Cap Value o EQ/Lazard Small Cap Value
o AXA Premier VIP Technology o EQ/Marsico Focus
o AXA Rosenberg VIT Value Long/Short o EQ/Mercury Basic Value Equity
Equity o EQ/MFS Emerging Growth Companies
o EQ/Alliance Common Stock o EQ/MFS Investors Trust
o EQ/Alliance Growth and Income o EQ/Money Market
o EQ/Alliance Intermediate Government o EQ/Putnam Growth & Income Value
Securities o EQ/Putnam International Equity
o EQ/Alliance International o EQ/Putnam Voyager
o EQ/Alliance Premier Growth o EQ/Small Company Index
o U.S. Real Estate--Class I
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* The "AXA Allocation" portfolios.
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, AXA Premier VIP Trust, The Universal
Institutional Funds, Inc., or Barr Rosenberg Variable Insurance 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 Traditional and Roth Inherited IRA beneficiary continuation contract
("Inherited IRA").
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 September 15, 2003, 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.
X00566/Elite '04 Series
(R-4/15)
Contents of this prospectus
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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
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FEE TABLE 11
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Example 13
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1. CONTRACT FEATURES AND BENEFITS 14
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How you can purchase and contribute to your contract 14
Owner and annuitant requirements 17
How you can make your contributions 17
What are your investment options under the contract? 17
Allocating your contributions 23
Your benefit base 26
Annuity purchase factors 26
Our Guaranteed minimum income benefit option 26
Guaranteed minimum death benefit 28
Inherited IRA beneficiary continuation contract 29
Your right to cancel within a certain number of days 30
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2. DETERMINING YOUR CONTRACT'S VALUE 31
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Your account value and cash value 31
Your contract's value in the variable investment options 31
Your contract's value in the guaranteed interest option 31
Your contract's value in the fixed maturity options 31
Your contract's value in the account for special dollar cost
averaging 31
Termination of your contract 31
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3. TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 32
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Transferring your account value 32
Disruptive transfer activity 32
Rebalancing your account value 32
- ----------------------
"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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4. ACCESSING YOUR MONEY 34
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Withdrawing your account value 34
How withdrawals are taken from your account value 35
How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death
benefit and Guaranteed principal benefit option 2 34
Loans under Rollover TSA contracts 36
Surrendering your contract to receive its cash value 36
When to expect payments 36
Your annuity payout options 37
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5. CHARGES AND EXPENSES 39
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Charges that Equitable Life deducts 39
Charges that the Trusts deduct 42
Group or sponsored arrangements 42
Other distribution arrangements 42
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6. PAYMENT OF DEATH BENEFIT 43
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Your beneficiary and payment of benefit 43
How death benefit payment is made 43
Beneficiary continuation option 44
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7. TAX INFORMATION 47
- --------------------------------------------------------------------------------
Overview 47
Buying a contract to fund a retirement arrangement 47
Transfers among investment options 47
Taxation of nonqualified annuities 47
Individual retirement arrangements (IRAs) 49
Special rules for contracts funding qualified plans 51
Tax-Sheltered Annuity contracts (TSAs) 51
Federal and state income tax withholding and
information reporting 52
Impact of taxes to Equitable Life 53
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8. MORE INFORMATION 54
- --------------------------------------------------------------------------------
About Separate Account No. 49 54
About the Trusts 54
About our fixed maturity options 54
About the general account 55
About other methods of payment 55
Dates and prices at which contract events occur 56
About your voting rights 56
About legal proceedings 57
About our independent accountants 57
Financial statements 57
Transfers of ownership, collateral assignments, loans
and borrowing 57
Distribution of the contracts 57
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9. INVESTMENT PERFORMANCE 59
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Communicating performance data 62
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10. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 63
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APPENDICES
- --------------------------------------------------------------------------------
I -- Purchase considerations for QP contracts A-1
II -- Market value adjustment example B-1
III -- Enhanced death benefit example C-1
IV -- Hypothetical illustrations D-1
V -- Guaranteed principal benefit
example E-1
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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 31
administrative charge 39
annual administrative charge 39
annual ratchet death benefit 28
annuitant 14
annuity maturity date 38
annuity payout options 37
annuity purchase factors 26
automatic investment program 56
beneficiary 43
Beneficiary continuation option ("BCO") 44
benefit base 26
business day 56
cash value 31
charges for state premium and other applicable taxes 42
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 50
regular contributions 50
rollovers and direct transfers 50
conversion contributions 50
contributions to traditional IRAs 50
regular contributions 50
rollovers and transfers 50
disability, terminal illness or confinement to nursing home 40
disruptive transfer activity 32
distribution charge 39
EQAccess 6
ERISA 36
fixed-dollar option 25
fixed maturity options 22
free look 30
free withdrawal amount 40
general account 55
general dollar cost averaging 25
guaranteed interest option 22
Guaranteed minimum death benefit 28
Guaranteed minimum income benefit 26
Guaranteed minimum income benefit charge 41
Guaranteed principal benefit 23
Inherited IRA cover
investment options cover
Investment simplifier 25
Page in
Term Prospectus
IRA cover
IRS 47
lifetime required minimum distribution withdrawals 35
loan reserve account 36
loans under rollover tsa 36
lump sum withdrawals 34
market adjusted amount 22
market timing 32
market value adjustment 22
maturity dates 22
maturity value 22
Mortality and expense risk charge 39
NQ cover
participant 17
portfolio cover
processing office 6
Protection Plus 28
Protection Plus charge 41
QP cover
rate to maturity 22
Rebalancing 32
roll-up death benefit 26
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 49
SAI cover
SEC cover
self-directed allocation 23
Separate Account 49 54
special dollar cost averaging 24
Spousal protection 44
standard death benefit 26
substantially equal withdrawals 34
Successor owner and annuitant 43
systematic withdrawals 34
TOPS 6
TSA cover
traditional IRA 49
Trusts cover
unit 31
variable investment options 17
wire transmittals 55
withdrawal charge 39
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
Guaranteed minimum death benefit Guaranteed death benefit
Guaranteed minimum income benefit Guaranteed Income Benefit
guaranteed interest option Guaranteed Interest Account
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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
$415.31 billion in assets as of December 31, 2002. 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) Elite(SM)
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)
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)
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
- --------------------------------------------------------------------------------
Equitable Accumulator(R) Elite(SM)
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, including notification of eligibility to exercise the guaranteed
minimum income benefit, if applicable.
- --------------------------------------------------------------------------------
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).
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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 only for contracts distributed through AXA Distributors);
(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 Who is Equitable Life?
(6) spousal consent for loans under Rollover TSA contracts;
(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;
(5) death claims;
(6) general dollar cost averaging (including the fixed dollar and interest
sweep options); and
(7) special dollar cost averaging.
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 (including the fixed dollar and interest
sweep options);
(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
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Professional investment Equitable Accumulator(R)Elite(SM)'s variable investment options invest in different portfolios managed
management by professional investment advisers.
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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.
o Special 10 year fixed maturity option (available under Guaranteed principal benefit option 2 only).
-------------------------------------------------------------------------------------------------------
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. If you withdraw or transfer only a
portion of a fixed maturity amount, 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 also applies.
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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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Guaranteed minimum The Guaranteed minimum income benefit provides income protection for you during the annuitant's life
income benefit once the owner elects to annuitize the contract.
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution amounts o Initial minimum: $10,000
o Additional minimum: $500 (NQ, QP and Rollover TSA contracts)
$100 monthly and $300 quarterly under our automatic investment program
(NQ contracts)
$1,000 (Inherited IRA contracts)
$50 (IRA contracts)
Maximum contribution limitations may apply. In general, contributions are limited to $1.5 million
($500,000 for owners or annuitants who are age 81 and older at contract issue).
- ------------------------------------------------------------------------------------------------------------------------------------
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) Elite(SM) at a glance -- key features
- ------------------------------------------------------------------------------------------------------------------------------------
Additional features o Guaranteed minimum death benefit options
o Guaranteed principal 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
o Spousal protection
o Successor owner/annuitant
- ------------------------------------------------------------------------------------------------------------------------------------
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 1.65%.
o The charges for the Guaranteed minimum death benefits range from 0.0% to 0.50%, 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 0.55% of the applicable benefit base charge for the optional Guaranteed minimum income benefit
until you exercise the benefit, elect another annuity payout option, or the contract date anniversary after
the annuitant reaches age 85, whichever occurs first.
o An annual charge for the optional Guaranteed principal benefit option 2 deducted on the first 10 contract
date anniversaries equal to 0.50% of the account value.
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." For example, if your contract date is May 1, your contract date
anniversary is April 30.
-------------------------------------------------------------------------------------------------------------
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 0.10% to 1.20% annually,
12b-1 fees of 0.25% annually and other expenses. In addition, each AXA Allocation Portfolio will invest in
shares of other Portfolios of the EQ/Advisors Trust and AXA Premier VIP Trust (the "Underlying
Portfolios"). Therefore, each AXA Allocation Portfolio will, in addition to its own expenses such as
management fees, bear its pro rata share of the fees and expenses incurred by the Underlying Portfolios and
the investment return of each AXA Allocation Portfolio will be reduced by the Underlying Portfolio's
expenses. The anticipated range of expenses expected to be incurred in connection with each AXA Allocation
Portfolio's investments in Underlying Portfolios is set forth in the AXA Premier VIP Trust prospectus.
- ------------------------------------------------------------------------------------------------------------------------------------
Annuitant issue ages NQ: 0-85
Rollover IRA, Roth Conversion
IRA and Rollover TSA: 20-85
Inherited IRA: 0-70
QP: 20-75
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Equitable Accumulator(R) Elite(SM) at a -- key features 9
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) Elite(SM) at a glance -- key features
Fee table
- --------------------------------------------------------------------------------
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the contract. Each of the charges and expenses
is more fully described in "Charges and expenses" later in this Prospectus.
The first table describes fees and expenses that you will pay at the time that
you surrender the contract or if you make certain withdrawals or apply your
cash value to certain payout options or if you purchase a Variable Immediate
Annuity. Charges designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state, may also apply. Charges for certain
features shown in the fee table are mutually exclusive.
- ------------------------------------------------------------------------------------------------------------------------------------
Charges we deduct from your account value at the time you request certain transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge as a percentage of contributions with-
drawn (deducted if you surrender your contract or make certain
withdrawals or apply your cash value to certain payout options).(1) 8.00%
Charge if you elect a Variable Immediate Annuity payout option $ 350
- ------------------------------------------------------------------------------------------------------------------------------------
The next table describes the fees and expenses that you will pay periodically during the time that you own the contract, not
including the underlying trust portfolio fees and expenses.
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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 1.10%
Administrative 0.30%
Distribution 0.25%
-------
Total annual expenses 1.65%
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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(2) $ 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 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 for which the benefit is in effect.)
Standard death benefit 0.00%
Annual Ratchet to age 85 0.25% of the Annual Ratchet to age 85 benefit base
Greater of 5% Roll up to age 85 or Annual Ratchet to age 85 0.50% of the greater of the 5% Roll up to age 85
benefit base or the Annual Ratchet to age 85 benefit base,
as applicable
- ------------------------------------------------------------------------------------------------------------------------------------
Guaranteed principal benefit charge for option 2 (calculated as
a percentage of the account value. Deducted annually on the first 10
contract date anniversaries.) 0.50%
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Guaranteed minimum income benefit charge (calculated as a
percentage of the applicable benefit base. Deducted annually on each
contract date anniversary for which the benefit is in effect.) 0.55%
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Protection Plus benefit charge (calculated as a percentage of the
account value. Deducted annually on each contract date anniversary
for which the benefit is in effect.) 0.35%
- ------------------------------------------------------------------------------------------------------------------------------------
Net loan interest charge - Rollover TSA contracts only (calcu-
lated and deducted daily as a percentage of the outstanding loan
amount) 2.00%(3)
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Fee table 11
You also bear your proportionate share of all fees and expenses paid by a
"Portfolio" that corresponds to any variable investment option you are using.
This table shows the lowest and highest total operating expenses charged by any
of the Portfolios that you will pay periodically during the time that you own
the contract. These fees and expenses are reflected in the Portfolio's net
asset value each day. Therefore, they reduce the investment return of the
Portfolio and the related variable investment option. Actual fees and expenses
are likely to fluctuate from year to year. More detail concerning each
Portfolio's fees and expenses is contained in the Trust prospectus for the
Portfolio.
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio operating expenses expressed as an annual percentage of daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002 (expenses that are deducted Lowest Highest
from Portfolio assets including management fees, 12b-1 fees, service fees, and/or ---- ----
other expenses)(4) 0.57% 3.77%
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(1) Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal, if applicable
The withdrawal charge percentage we use is determined by the contract year in Contract
which you make the withdrawal or surrender your contract. For each contribution, Year
we consider the contract year in which we receive that contribution to be 1 8.00%
"contract year 1") 2 7.00%
3 6.00%
4 5.00%
5+ 0.00%
(2) During the first two contract years this charge, if it applies, is equal to the lesser of $30 or 2% of your account value.
Thereafter, the charge is $30 each contract year.
(3) We charge interest on loans under Rollover TSA contracts but also credit you interest on your loan reserve account. Our net loan
interest charge is determined by the excess between the interest rate we charge over the interest rate we credit. See "Loans
under Rollover TSA contracts" later in this Prospectus for more information on how the loan interest is calculated and for
restrictions that may apply.
(4) Equitable Life, the manager of AXA Premier VIP Trust and EQ Advisors Trust, has entered into Expense Limitation Agreements with
respect to certain Portfolios, which are effective through April 30, 2004. Under these agreements Equitable Life has agreed to
waive or limit its fees and assume other expenses of certain Portfolios, if necessary, in an amount that limits each affected
Portfolio's total Annual Expenses (exclusive of interest, taxes, brokerage commissions, capitalized expenditures and
extraordinary expenses) to not more than specified amounts. Morgan Stanley Investment Management Inc., which does business in
certain instances as "Van Kampen," is the manager of the Universal Institutional Funds, Inc. -- U.S. Real Estate Portfolio --
Class I and has voluntarily agreed to reduce its management fee and/or reimburse the Portfolio so that total annual operating
expenses of the Portfolio (exclusive of investment related expenses, such as foreign country tax expense and interest expense on
amounts borrowed) are not more than specified amounts. Van Kampen reserves the right to terminate any waiver and/or
reimbursement at any time without notice. AXA Rosenberg Investment Management LLC, the manager of the Barr Rosenberg Variable
Insurance Trust -- AXA Rosenberg VIT Value Long/Short Equity Fund, has voluntarily agreed to reimburse expenses in excess of
specified amounts. See this Prospectus for each applicable underlying Trust for more information about the arrangements. In
addition, a portion of the brokerage commissions each EQ Advisors Trust Portfolio and each AXA Premier VIP Trust portfolio pays
is used to reduce the Portfolio's expenses. If the table reflected these expense limitation arrangements and the portion of the
brokerage commissions used to reduce portfolio expenses, the lowest and highest figures would be as shown in the table below
(based on estimated amounts for the current fiscal year, since initial seed capital was invested for the portfolio representing
the "Lowest" figure on July 31, 2003 and for the portfolio representing the "Highest" figure on May 2, 2003):
- --------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002
(expenses that are deducted from Portfolio assets Lowest Highest
including management fees, service fees, 12b-1 fees, ------ -------
and/or other expenses) after expense cap 0.35% 2.00%
- --------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2002
(expenses that are deducted from Portfolio assets
including management fees, 12b-1 fees, service fees,
and/or other expenses) after expense cap and after a 0.35% 2.00%
portion of the brokerage commissions that the Port-
folio pays is used to reduce the Portfolio's expenses
- --------------------------------------------------------------------------------
12 Fee table
EXAMPLE
This example is intended to help you compare the cost of investing in the
contract with the cost of investing in other variable annuity contracts. These
costs include contract owner transaction expenses, contract fees, separate
account annual expenses, and underlying trust fees and expenses.
The example below shows the expenses that a hypothetical contract owner (who
has elected the Guaranteed minimum income benefit with the enhanced death
benefit that provides for the greater of the 5% Roll up to age 85 or the Annual
Ratchet to age 85 and Protection Plus) would pay in the situations illustrated.
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 $1.30 per $10,000.
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, the withdrawal charge, the charge
for any optional benefits and the charge if you elect a Variable Immediate
Annuity payout option 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.
This 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 example is not an
estimate or guarantee of future investment performance.
The example assumes that you invest $10,000 in the contract for the time
periods indicated. The example also assumes that your investment has a 5%
return each year and assumes the highest and lowest fees and expenses of any of
the underlying trust portfolios. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:
If you surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 1,181.43 $ 1,770.67 $ 1,996.45 $ 4,232.01
Highest $ 1,517.39 $ 2,729.18 $ 3,510.89 $ 6,837.70
If you annuitize at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 731.43 $ 1,520.67 $ 2,346.45 $ 4,582.01
Highest $ 1,067.39 $ 2,479.18 $ 3,860.89 $ 7,187.70
If you do not surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
Lowest $ 381.43 $ 1,170.67 $ 1,996.45 $ 4,232.01
Highest $ 717.39 $ 2,129.18 $ 3,510.89 $ 6,837.70
Fee table 13
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: (i) at least
$500 each for NQ, QP and Rollover TSA contracts; (ii) $50 each for Rollover IRA
and Roth conversion IRA contracts; and (iii) $1,000 for Inherited IRA
contracts, 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.
We may refuse to accept any contribution if the sum of all contributions under
all Equitable Accumulator(R) series contracts with the same owner or annuitant
would then total more than $1,500,000 ($500,000 for owners or annuitants who
are age 81 and older at contract issue). 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 with the same owner or annuitant would then total more than
$2,500,000.
- --------------------------------------------------------------------------------
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 Source of contributions Limitations on contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
NQ 0 through 85 o After-tax money. o No additional contributions after age 87.*
Rollover IRA 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 contributions after
contracts or other 403(b) arrangements, age 87.*
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 o Although we accept regular IRA contributions
individual retirement arrangement. (limited to $3,000 for each of calendar years 2003
o Direct custodian-to-custodian transfers and 2004), under the Rollover IRA con- tracts, we
from another traditional individual intend that this contract be used primarily for
retirement arrangement. rollover and direct transfer contributions.
o Regular IRA contributions. o Additional catch-up contributions of up to $500
o Additional "catch-up" contributions. can be made for the calendar year 2003 or 2004
where the owner is at least age 50 but under age
70-1/2 at any time during the calendar year for
which the contribution is made.
14 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Available for
annuitant
Contract type issue ages Source of contributions Limitations on contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA o Conversion rollovers from a traditional contributions after age 87.*
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
o Regular Roth IRA contributions. traditional IRA you are rolling over.
o Additional catch-up contributions. 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
(limited to $3,000 for each of calendar years 2003
and 2004) under the Roth IRA contracts, we intend
that this contract be used primarily for rollover
and direct transfer contributions.
o Additional catch-up contributions of up to $500
can be made for the calendar year 2003 or 2004
where the owner is at least age 50 at any time
during the calendar year for which the
contribution is made.
- ------------------------------------------------------------------------------------------------------------------------------------
Inherited IRA 0 through 70 o (If contract is traditional IRA) Direct o Any additional contributions must be from same
Beneficiary custodian-to-custodian transfers of your type of IRA of same deceased owner.
Continuation interest as death beneficiary of the
Contract deceased owner's traditional individual
(traditional retirement arrangement.
IRA or Roth o (If contract is Roth IRA) Direct
IRA) custodian-to-custodian transfers of your
interest as death beneficiary of the
deceased owner's Roth IRA.
- ------------------------------------------------------------------------------------------------------------------------------------
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 87.*
Section 403(b) of the Internal Revenue
Code, complying with IRS Revenue o Rollover or direct transfer contributions after
Ruling 90-24. age 70-1/2 must be net of any required minimum
o Eligible rollover distributions of pre-tax distributions.
funds from other 403(b) plans.
o Subsequent contributions may also be o Employer-remitted contributions are not permitted.
rollovers from qualified plans,
governmental EDC plans and traditional
IRAs.
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 15
- ------------------------------------------------------------------------------------------------------------------------------------
Available for
annuitant
Contract type issue ages Source of contributions Limitations on contributions+
- ------------------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o Only transfer contributions from an o Regular ongoing payroll contributions are not
existing defined contribution qualified permitted.
plan trust. o Only one additional transfer contribution may be
o The plan must be qualified under Section made during a contract year.
401(a) of the Internal Revenue Code. o No additional transfer contributions after age 76.
o For 401(k) plans, transferred o A Separate QP contract must be established for
contributions may only include employee each plan participant.
pre-tax contributions. o Employer-remitted contributions are not permitted.
Please refer to Appendix I at the end of this Prospectus for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
+ If you purchase Guaranteed principal benefit option 2, no contributions are
permitted after the six month period beginning on the contract date.
* For Pennsylvania, the following contribution limitations apply:
Maximum
Issue age contribution age
0-75 82
76 83
77 84
78-80 85
81-85 87
See "Tax information" later in this Prospectus and in the SAI for a more
detailed discussion of sources of contributions and certain contribution
limitations. 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. In general, we
will not permit a contract to be owned by a minor unless it is pursuant to the
Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act in your
state. If the Spousal protection feature is elected, the spouses must be joint
owners, one of the spouses must be the annuitant and both must be named as the
only primary beneficiaries.
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, 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/Money Market variable investment
option. Listed below are the currently available portfolios, their investment
objectives and their advisers. See "Inherited IRA beneficiary continuation
contract" later in this section for Inherited IRA owner and annuitant
requirements.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options, the guaranteed
interest option, the fixed maturity options and the account for special dollar
cost averaging.
- --------------------------------------------------------------------------------
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.
Equitable life serves as the investment manager of the Portfolios of the EQ
Advisors Trust and the AXA Premier VIP Trust. 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. The
advisers for these Portfolios, listed in the chart below, are those who make the
investment decisions for each Portfolio. The chart also indicates the investment
manager for each of the other Portfolios.
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AXA Premier VIP Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA AGGRESSIVE ALLOCATION Seeks long-term capital appreciation. o Equitable Life
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE Seeks a high level of current income. o Equitable Life
ALLOCATION
- ------------------------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE-PLUS Seeks current income and growth of capital, with o Equitable Life
ALLOCATION a greater emphasis on current income.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA MODERATE ALLOCATION Seeks long-term capital appreciation and current o Equitable Life
income.
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AXA MODERATE-PLUS Seeks long-term capital appreciation and current o Equitable Life
ALLOCATION income, with a greater emphasis on capital
appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP AGGRESSIVE Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
EQUITY o MFS Investment Management
o Marsico Capital Management, LLC
o Provident Investment Counsel, Inc.
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AXA PREMIER VIP CORE BOND Seeks a balance of a high current income and o BlackRock Advisors, Inc.
capital appreciation, consistent with a prudent o Pacific Investment Management Company
level of risk. LLC
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HEALTH CARE Seeks long-term growth of capital. o A I M Capital Management, Inc.
o Dresdner RCM Global Investors LLC
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP HIGH YIELD Seeks to achieve a high total return through a o Alliance Capital Management L.P.
combination of current income and capital o Pacific Investment Management Company
appreciation. LLC (PIMCO)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP Seeks long-term growth of capital. o Alliance Capital Management L.P., through its
INTERNATIONAL EQUITY Bernstein Investment Research and Management Unit
o Bank of Ireland Asset Management (U.S.) Limited
o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
18 Contract features and benefits
- ------------------------------------------------------------------------------------------------------------------------------------
AXA Premier VIP Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P., through its
CORE EQUITY Bernstein Investment Research and Management Unit
o Janus Capital Management LLC
o Thornburg Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
GROWTH o Dresdner RCM Global Investors LLC
o TCW Investment Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP LARGE CAP Seeks long-term growth of capital. o Alliance Capital Management L.P.
VALUE o Institutional Capital Corporation
o MFS Investment Management
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o Alliance Capital Management L.P.
CAP GROWTH o Franklin Advisers, Inc.
o Provident Investment Counsel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP SMALL/MID Seeks long-term growth of capital. o AXA Rosenberg Investment Management LLC
CAP VALUE o TCW Investment Management Company
o Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP TECHNOLOGY Seeks long-term growth of capital. o Alliance Capital Management L.P.
o Dresdner RCM Global Investors LLC
o Firsthand Capital Management, Inc.
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EQ/Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE COMMON STOCK Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE GROWTH AND Seeks to provide a high total return. o Alliance Capital Management L.P.
INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERMEDIATE Seeks to achieve high current income consistent o Alliance Capital Management L.P.
GOVERNMENT SECURITIES with relative stability of principal.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE INTERNATIONAL Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH To achieve long-term growth of capital. o Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE QUALITY BOND Seeks to achieve high current income consistent o Alliance Capital Management L.P.
with moderate risk to capital.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE SMALL CAP Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Contract features and benefits 19
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY Seeks to achieve long-term growth of capital. o Alliance Capital Management L.P.
Current income is incidental to the Portfolio's
objective.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/BERNSTEIN DIVERSIFIED Seeks capital appreciation. o Alliance Capital Management L.P.,
VALUE through its Bernstein Investment Research
and Management Unit
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY Seeks long-term capital appreciation. o Calvert Asset Management Company, Inc.
RESPONSIBLE and Brown Capital Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN To achieve long-term growth of capital. o Capital Guardian Trust Company
RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN U.S. To achieve long-term growth of capital. o Capital Guardian Trust Company
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EMERGING MARKETS EQUITY Seeks long-term capital appreciation. o Morgan Stanley Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX Seeks a total return before expenses that o 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.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN OMEGA Seeks long-term capital growth. o Evergreen Investment Management
Company, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI MID CAP Seeks long-term growth of capital. o Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/FI SMALL/MID CAP VALUE Seeks long-term capital appreciation. o Fidelity Management & Research Company
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/J.P. MORGAN CORE BOND Seeks to provide a high total return o 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. o Janus Capital Management LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/LAZARD SMALL CAP VALUE Seeks capital appreciation. o Lazard Asset Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MARSICO FOCUS Seeks long-term growth of capital. o Marsico Capital Management, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MERCURY BASIC VALUE Seeks capital appreciation and secondarily, o Mercury Advisors
EQUITY income.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/MFS EMERGING GROWTH Seeks to provide long-term capital growth. o MFS Investment Management
COMPANIES
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EQ/MFS INVESTORS TRUST Seeks long-term growth of capital with o MFS Investment Management
secondary objective to seek reasonable
current income.
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EQ/MONEY MARKET Seeks to obtain a high level of current income, o Alliance Capital Management L.P.
preserve its assets and maintain liquidity.
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20 Contract features and benefits
Portfolios of the Trusts (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Advisors Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME Seeks capital growth. Current income is o Putnam Investment Management, LLC
VALUE a secondary objective.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL Seeks capital appreciation. o Putnam Investment Management, LLC
EQUITY
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EQ/PUTNAM VOYAGER Seeks long-term growth of capital and any o Putnam Investment Management, LLC
increased income that results from this growth.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/SMALL COMPANY INDEX Seeks to replicate as closely as possible o Alliance Capital Management L.P.
(before the deduction of Portfolio expenses)
the total return of the Russell 2000 Index.
- ------------------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg
Variable Insurance Trust
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
AXA ROSENBERG VIT VALUE Seeks to increase the value of your investment o AXA Rosenberg Investment Management LLC
LONG/SHORT EQUITY in bull markets and bear markets through
strategies that are designed to have limited
exposure to general equity market risk
- ------------------------------------------------------------------------------------------------------------------------------------
The Universal Institutional
Funds, Inc.
Portfolio Name Objective Adviser(s)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Real Estate -- Seeks to provide above average current income o Van Kampen(2)
Class I(1) and long- term capital appreciation by investing
primarily in equity securities of companies in
the U.S. real estate industry, including real
estate investment trusts.
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(1) `Class I' shares are defined in the current underlying Trust prospectus.
(2) Van Kampen is the name under which Morgan Stanley Investment Management
Inc. does business in certain situations.
Other important information about the portfolios is included in the
prospectuses for each Trust that accompany this Prospectus.
Contract features and benefits 21
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 rate for 2003 is equal to the lifetime minimum rate of your
contract. Depending on the state where your contract is issued, your lifetime
minimum rate is either 1.5% or 3.00%. The data page for your contract shows the
lifetime minimum rate. The annual minimum rate will never be less than the
lifetime minimum rate. Check with your financial professional as to which rate
applies in your state. Current interest rates will never be less than the
yearly guaranteed interest rate.
Generally, contributions and transfers into and out of the guaranteed interest
option are limited. See "Transferring your money among the investment options"
later in the prospectus for restrictions on transfer from the guaranteed
interest option.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. We will not accept allocations to a fixed maturity option if on the date
the contribution or transfer is to be applied the rate to maturity is 3%. This
means that at points in time there may be no fixed maturity options available.
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.
- --------------------------------------------------------------------------------
Under the Special 10 year fixed maturity option (which is available only under
GPB Option 2), additional contributions will have the same maturity date as
your initial contribution (see "The Guaranteed Principal Benefits," below). The
rate to maturity you will receive for each additional contribution is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution.
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.
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 subsequent contributions to the contract after 60 days, transfers from the
variable investment options or the guaranteed interest option into a fixed
maturity option or transfers from one fixed maturity option to another.
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. As of February 14,
2003 the next available maturity date was February 14, 2009. If no fixed
maturity options are available we will transfer your maturity value to the
EQ/Money Market Option.
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
22 Contract features and benefits
(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 II 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 the lifetime minimum
rate for the guaranteed interest option. 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, the guaranteed principal benefits 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. No more than 25% of any contribution may be allocated to the
guaranteed interest option. The total of your allocations must equal 100%. If
the annuitant is age 76-80, you may allocate contributions to fixed maturity
options with maturities of seven years or less. If the annuitant is age 81 or
older, you may allocate contributions to fixed maturity options with maturities
of 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.
THE GUARANTEED PRINCIPAL BENEFITS
Subject to state availability, we offer a guaranteed principal benefit ("GPB")
with two options. You may only elect one of the GPBs. Neither GPB is available
under Inherited IRA contracts. We will not offer either GPB when the rate to
maturity for the applicable fixed maturity option is 3%. If you elect either
GPB, you may not elect the Guaranteed minimum income benefit, the systematic
withdrawals option or the substantially equal withdrawals option. Both GPB
options allow you to allocate a portion of your contribution or contributions
to the variable investment options, while ensuring that your account value will
at least equal your contributions adjusted for withdrawals and transfers on a
specified date. GPB Option 2 generally provides you with the ability to
allocate more of your contributions to the variable investment options than
could be allocated using GPB Option 1.
You may elect GPB Option 1 only if the annuitant is age 80 or younger when the
contract is issued (after age 75, only the 7-year fixed maturity option is
available). You may elect GPB Option 2 only if the annuitant is age 75 or
younger when the contract is issued. If you are purchasing an IRA, QP or
Rollover TSA contract, before you either purchase GPB Option 2 or elect GPB
Option 1 with 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, guaranteed interest option and permissible funds outside
this contract are sufficient to meet your required minimum distributions. See
"Tax information" later in this Prospectus and in the SAI.
GUARANTEED PRINCIPAL BENEFIT OPTION 1. Under GPB Option 1, you select a fixed
maturity option at the time you sign your application. 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 amount
of your contribution allocated to the fixed maturity option will be calculated
based upon the rate to maturity then in effect for the fixed maturity option
you choose. Your contract will contain information on the percentage of your
contribution allocated to the fixed maturity option. If you make any
withdrawals or transfers from the fixed maturity option before the option's
maturity date, the amount in the fixed maturity option will be adjusted and may
no longer grow to equal your initial contribution under GPB Option 1. The
maturity date you select generally may not be later than 10 years, or earlier
than 7 years from your contract date. You may allocate the rest of your initial
contribution to the investment options however you choose (unless you elect a
dollar cost averaging program, in which case the remainder of your initial
contribution must be allocated to the dollar cost averaging program). Upon the
maturity date of the fixed maturity option, you will be provided with the same
notice and the same choices with respect to the maturity value as described
above under "Your choices at the maturity date." There is no charge for GPB
Option 1.
GUARANTEED PRINCIPAL BENEFIT OPTION 2. You may purchase GPB Option 2 at the
time you apply for your contract. IF YOU PURCHASE GPB OPTION 2, YOU MAY NOT
MAKE ADDITIONAL CONTRIBUTIONS TO YOUR CONTRACT AFTER SIX MONTHS FROM THE
CONTRACT ISSUE DATE OR AT ANY EARLIER TIME IF AT SUCH TIME THE THEN APPLICABLE
RATE TO MATURITY ON THE
Contract features and benefits 23
SPECIAL 10 YEAR FIXED MATURITY OPTION IS 3%. Therefore, any discussion in this
Prospectus that involves any additional contributions after the first six
months will be inapplicable.
We specify the portion of your initial contribution, and any additional
permitted contributions, to be allocated to a Special 10 year fixed maturity
option. Your contract will contain information on the percentage of applicable
contributions allocated to the Special 10 year fixed maturity option. You may
allocate the rest of your contributions among the investment options (other
than the Special 10 year fixed maturity option) however you choose, as
permitted under your contract and other than the Investment simplifier (unless
you elect a dollar cost averaging program, in which case all contributions,
other than amounts allocated to the Special 10 year fixed maturity option, must
be allocated to the dollar cost averaging program). The Special 10 year fixed
maturity option will earn interest at the specified rate to maturity then in
effect.
If on the 10th contract date anniversary, your annuity account value is less
than the amount that is guaranteed under GPB Option 2, we will increase your
annuity account value to be equal to the guaranteed amount under GPB Option 2.
Any such additional amounts added to your annuity account value will be
allocated to the EQ/Money Market investment option. After the maturity date of
the Special 10 year fixed maturity option, the guarantee under GPB Option 2
will terminate. Upon the maturity date of the Special 10 year fixed maturity
option, you will be provided with the same notice and the same choices with
respect to the maturity value as described above under "Your choices at the
maturity date." Your GPB Option 2 amount is equal to your initial contribution
adjusted for any additional permitted contributions, transfers out of the
Special 10 year fixed maturity option and withdrawals from the contract (see
"How withdrawals (and transfers out of the Special 10 year fixed maturity
option) affect your Guaranteed income benefit, Guaranteed minimum death benefit
and Guaranteed principal benefit option 2" in "Accessing your money" later in
this Prospectus). Any transfers or withdrawals from the Special 10 year fixed
maturity option will also be subject to a market value adjustment (see "Market
value adjustment" under "Fixed maturity options" above in this section).
GPB Option 2 will terminate if the contract terminates before the maturity date
of the Special 10 year fixed maturity option. If the owner and the annuitant
are different people and the owner dies before the maturity date of the Special
10 year fixed maturity option, we will continue GPB Option 2 only if the
contract can continue through the maturity date of the Special 10 year fixed
maturity option. If the contract cannot so continue, we will terminate GPB
Option 2. GPB Option 2 will continue where there is a successor
owner/annuitant. GPB Option 2 will terminate upon the exercise of the
beneficiary continuation option. See "Payment of death benefit" later in this
Prospectus for more information about the continuation of the contract after
the death of the owner and/or the annuitant.
GPB Option 2 is not an account value or a cash value. There is a fee associated
with GPB Option 2 (see "Charges and expenses" later in this Prospectus). You
should note that the purchase of GPB Option 2 is not appropriate if you want to
make additional contributions to your contract beyond the first six months
after your contract is issued. If you later decide that you would like to make
additional contributions to the Accumulator(R) Elite(SM) contract, we may permit
you to purchase another contract. If we do, however, you should note that we do
not reduce or waive any of the charges on the new contract, nor do we guarantee
that the features available under this contract will be available under the new
contract. This means that you might end up paying more with respect to certain
charges than if you had simply purchased a single contract (for example, the
administrative charge).
The purchase of GPB Option 2 is also not appropriate if you plan on terminating
your contract before the maturity date of the special 10 year fixed maturity
option. In addition, because we prohibit contributions to your contract after
the first six months, certain contract benefits that are dependent upon
contributions or account value will be limited (for example the Guaranteed
death benefits and Protection Plus). You should also note that if you intend to
allocate a large percentage of your contributions to the guaranteed interest
option or other fixed maturity options, the purchase of GPB Option 2 may not be
appropriate because of the guarantees already provided by these options. An
example of the effect of GPB Option 1 and GPB Option 2 on your annuity contract
is included in Appendix V later in this Prospectus.
DOLLAR COST AVERAGING
We offer a variety of 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. 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
24 Contract features and benefits
special dollar cost averaging program is selected at the time of application 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 for special dollar
cost averaging 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/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/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/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/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.
INVESTMENT SIMPLIFIER
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. 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.
Interest sweep option. Under this option, you may elect to have monthly
transfers from amounts in the guaranteed interest option into the variable
investment options of your choice. The transfer date will be the last business
day of the month. The amount we will transfer will be the interest credited to
amounts you have in the guaranteed interest option from the last business day
of the prior month to the last business day of the current month. You must have
at least $7,500 in the guaranteed interest option on the date we receive your
election and on the last business day of each month thereafter to participate
in the interest sweep option. We will automatically cancel the interest sweep
program if the amount in the guaranteed interest option is less than $7,500 on
the last day of the month for two months in a row.
----------------------------------
You may not participate in any dollar cost averaging program if you are
participating in the rebalancing program. If you elect a GPB, you may also
elect the 12 month or General dollar cost averaging program. If you elect
either of these programs, everything other than amounts allocated to the fixed
maturity option under the GPB must be allocated
Contract features and benefits 25
to that dollar cost averaging program. You may still elect the Investment
simplifier for amounts transferred from investment options (other than the
fixed maturity option under the GPB you have elected), and, for GPB Option 1,
you may also elect Investment simplifier for subsequent contributions. See
"Transferring your money among investment options" later in this Prospectus.
For the fixed-dollar option and the interest sweep option, the first monthly
transfer will occur on the last business day of the month following the month
that we receive your election form at our processing office.
YOUR BENEFIT BASE
A benefit base is used to calculate the Guaranteed minimum income benefit and
the death benefits, as described in this section. Your benefit base is not an
account value or a cash value. See also "Our Guaranteed minimum income 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
5% ROLL UP TO AGE 85 (USED FOR THE GREATER OF THE 5% ROLL UP TO AGE 85 OR THE
ANNUAL RATCHET TO AGE 85 ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM
INCOME 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
The effective annual interest rate credited to this benefit base is:
o 5% with respect to the variable investment options (other than EQ/Alliance
Intermediate Government Securities and EQ/Money Market) and the account
for special dollar cost averaging; and
o 3% with respect to the EQ/Alliance Intermediate Government Securities and
EQ/Money Market, the fixed maturity options, the Special 10 year fixed
maturity option, 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 (USED FOR THE ANNUAL RATCHET TO AGE 85 ENHANCED DEATH
BENEFIT, THE GREATER OF THE 5% ROLL UP TO AGE 85 OR THE ANNUAL RATCHET TO AGE
85 ENHANCED DEATH BENEFIT AND FOR THE GUARANTEED MINIMUM INCOME 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 (and transfers out of the
Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2" in "Accessing your money" later in this Prospectus).
GREATER OF THE 5% 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 5% Roll up to age 85
or the benefit base computed for 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 Guaranteed
minimum income benefit option" below 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 GUARANTEED MINIMUM INCOME BENEFIT OPTION
The Guaranteed minimum income 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 Guaranteed minimum income benefit which is described under "Guaranteed
minimum income benefit charge" in "Charges and expenses" later in this
Prospectus. Please ask your financial professional if the Guaranteed minimum
income benefit is available in your state.
If you are purchasing this contract as an Inherited IRA, or if you elect a GPB,
the Guaranteed minimum income benefit is not available. If you are purchasing
this contract to fund a Charitable Remainder Trust, the Guaranteed minimum
income benefit is not available except for certain split-funded Charitable
Remainder Trusts. If the annuitant was older than age 60 at the time an IRA, QP
or Rollover TSA contract was issued, the Guaranteed minimum income 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.
26 Contract features and benefits
The Guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or a 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 life with a
period certain payout option is 10 years. This period may be shorter, depending
on the annuitant's age as follows:
- -------------------------------------------
Level payments
- -------------------------------------------
Period certain years
Annuitant's age at ----------------------
exercise IRAs NQ
- -------------------------------------------
75 and younger 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
84 6 6
85 5 5
- -------------------------------------------
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 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 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. The benefit base is applied only to the guaranteed annuity
purchase factors under the Guaranteed minimum income benefit in your contract
and not to any other guaranteed or current annuity purchase rates.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive a new contract for the annuity payout option. For a
discussion of when your payments will begin and end, see "Exercise of
Guaranteed minimum income benefit" below.
Before you elect the Guaranteed minimum income benefit, you should consider the
fact that the it provides a form of insurance and is based on conservative
actuarial factors. The guaranteed annuity purchase factors we use to determine
your payout annuity benefit under the Guaranteed minimum income benefit are
more conservative than the guaranteed annuity purchase factors we use for our
standard payout annuity options. 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 Guaranteed
minimum income benefit payout annuity will be smaller than each periodic
payment under our standard payout annuity options. 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.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. Assuming the 5% 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/Money Market,
the guaranteed interest option, the fixed maturity options (including the
Special 10 year fixed maturity option) or the loan reserve account under
rollover TSA contracts.
- ------------------------------------------------------------------------------
Guaranteed minimum income
Contract date benefit -- annual income
anniversary at exercise payable 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 date anniversary. You must 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 annual payments one year after the annuity payout contract is
issued. You may choose to take a withdrawal prior to exercising the Guaranteed
minimum income benefit, which will reduce your payments. See "Accessing your
money" under "Withdrawing your account value" later in this Prospectus.
Payments end with the last payment before the annuitant's (or joint
annuitant's, if applicable) death, or if later, the end of the period certain
(where the payout option chosen includes a period certain).
EXERCISE RULES. You 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.
Contract features and benefits 27
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 within 30 days following 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) 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; and
(iv) a successor owner/annuitant may only continue the Guaranteed minimum
income benefit if the contract is not past the last date on which the
original annuitant could have exercised the benefit. In addition, the
successor owner/annuitant must be eligible to continue the benefit and to
exercise the benefit under the applicable exercise rule (described in the
above bullets) using the following additional rules. The successor
owner/annuitant's age on the date of the annuitant's death replaces the
annuitant's age at issue for purposes of determining the availability of
the benefit and which of the exercise rules applies. The original contract
issue date will continue to apply for purposes of the exercise rules.
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
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,
adjusted for any 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 (without adjustment for any otherwise applicable negative
market value adjustment) 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 (adjusted for any subsequent
withdrawals, withdrawal charges and taxes that apply), whichever provides the
highest amount. If you elect the Spousal protection option, the guaranteed
minimum death benefit is based on the age of the older spouse, who may or may
not be the annuitant, for the life of the contract. See "Spousal protection" in
"Payment of death benefit" later in this Prospectus for more information.
OPTIONAL ENHANCED DEATH BENEFITS APPLICABLE FOR ANNUITANT AGES 0 THROUGH 75 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 75 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; 0 THROUGH 70 AT ISSUE OF INHERITED 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:
ANNUAL RATCHET TO AGE 85.
THE GREATER OF THE 5% 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.
In New York only the standard death benefit and the Annual Ratchet to age 85
enhanced death benefit are available.
The standard death benefit is the only death benefit available for annuitants
ages 76 through 85 at issue of NQ, Rollover IRA, Roth Conversion IRA and
Rollover TSA contracts.
----------------------------------
Please see both "Termination of your contract" in "Determining your contract
value" and "How withdrawals (and transfers out of the Special 10 year fixed
maturity option) affect your Guaranteed minimum income benefit, Guaranteed
minimum death benefit and Guaranteed principal benefit option 2" in "Accessing
your money" later in this Prospectus for more information on these guaranteed
benefits.
See Appendix III 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.
28 Contract features and benefits
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) adjusted for each withdrawal that exceeds your
Protection Plus earnings. "Net contributions" are reduced by the amount of that
excess. Protection Plus earnings are equal to (a) minus (b) where (a) is the
greater of the account value and the death benefit immediately prior to the
withdrawal and (b) is the net contributions as adjusted by any prior
withdrawals; and (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 75 when we issue your contract (or if the
successor owner/annuitant is between the ages of 71 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 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. Reduction on a pro rata basis
means that we calculate the percentage of the current account value that is
being withdrawn and we reduce the benefit 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 benefit is $40,000 before the withdrawal, it
would be reduced by $16,000 ($40,000 X .40) and the benefit after the
withdrawal would be $24,000 ($40,000 - $16,000).
If you elect Spousal protection, the Protection Plus benefit is based on the
age of the older spouse, who may or may not be the annuitant. Upon the death of
the non-annuitant spouse, the account value will be increased by the value of
the Protection Plus benefit as of the date we receive due proof of death. Upon
the death of the annuitant, the value of the Protection Plus benefit is either
added to the death benefit payment or to the account value if successor
owner/annuitant is elected. If the surviving spouse elects to continue the
contract, the benefit will be based on the age of the surviving spouse as of
the date of the non-surviving spouse's death for the remainder of the contract.
If the surviving spouse is age 76 or older, the benefit will terminate and the
charge will no longer be in effect. See "Spousal protection" in "Payment of
death benefit" later in this Prospectus for more information.
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.
INHERITED IRA BENEFICIARY CONTINUATION CONTRACT
This contract is available to an individual beneficiary of a traditional IRA or
a Roth IRA where the deceased owner held the individual retirement account or
annuity (or Roth individual retirement account or annuity) with an insurance
company or financial institution other than Equitable. The purpose of the
inherited IRA beneficiary continuation contract is to permit the beneficiary to
change the funding vehicle that the deceased owner selected ("original IRA")
while taking the required minimum distribution payments that must be made to
the beneficiary after the deceased owner's death. This contract is intended
only for beneficiaries who want to take payments at least annually over their
life expectancy. These payments generally must begin (or must have begun) no
later than December 31 of the calendar year following the year the deceased
owner died. This contract is not suitable for beneficiaries electing the
"5-year rule." See "Beneficiary continuation option for IRA and Roth IRA
contracts" under "Beneficiary continuation option" in "Payment of death
benefit" later in this Prospectus. You should discuss with your tax advisor
your own personal situation. This contract may not be available in all states.
Please speak with your financial professional for further information.
The inherited IRA beneficiary continuation contract can only be purchased by a
direct transfer of the beneficiary's interest under the deceased owner's
original IRA. The owner of the inherited IRA beneficiary continuation contract
is the individual who is the beneficiary of the original IRA. (Certain trusts
with only individual beneficiaries will be treated as individuals for this
purpose). The contract must also contain the name of the deceased owner. In
this discussion, "you" refers to the owner of the inherited IRA beneficiary
continuation contract.
The inherited IRA beneficiary continuation contract can be purchased whether or
not the deceased owner had begun taking required minimum distribution payments
during his or her life from the original IRA or whether you had already begun
taking required minimum distribution payments of your interest as a beneficiary
from the deceased owner's original IRA. You should discuss with your own tax
advisor when payments must begin or must be made.
Under the inherited IRA beneficiary continuation contract:
o You must receive payments at least annually (but can elect to receive
payments monthly or quarterly). Payments are generally made over your life
expectancy determined in the calendar year after the deceased owner's
death and determined on a term certain basis.
o The beneficiary of the original IRA will be the annuitant under the inherited
IRA beneficiary continuation contract. In the case where the beneficiary
is a "See Through Trust," the oldest beneficiary of the trust will be the
annuitant.
o An inherited IRA beneficiary continuation contract is not available for
annuitants over age 70.
o The initial contribution must be a direct transfer from the deceased owner's
original IRA and is subject to minimum contribution amounts. See "How you
can purchase and contribute to your contract" earlier in this section.
o Subsequent contributions of at least $1,000 are permitted but must be direct
transfers of your interest as a beneficiary from another IRA with a
financial institution other than Equitable, where the deceased owner is
the same as under the original IRA contract.
o You may make transfers among the investment options.
Contract features and benefits 29
o You may choose at any time to withdraw all or a portion of the account value.
Any partial withdrawal must be at least $300. Withdrawal charges, if
applicable under your contract, will apply as described in "Charges and
expenses" later in this Prospectus.
o The Guaranteed minimum income benefit, successor owner/
annuitant feature, special dollar cost averaging program (if applicable),
automatic investment program, GPB Option 2 and systematic withdrawals are
not available under the Inherited IRA beneficiary continuation contract.
o If you die, we will pay to a beneficiary that you choose the greater of the
annuity account value or the applicable death benefit.
o Upon your death, your beneficiary has the option to continue taking required
minimum distributions based on your remaining life expectancy or to
receive any remaining interest in the contract in a lump sum. The option
elected will be processed when we receive satisfactory proof of death, any
required instructions for the method of payment and any required
information and forms necessary to effect payment. If your beneficiary
elects to continue to take distributions, we will increase the account
value to equal the applicable death benefit if such death benefit is
greater than such account value as of the date we receive satisfactory
proof of death and any required instructions, information and forms.
Thereafter, withdrawal charges (if applicable under your contract) will no
longer apply. If you had elected any enhanced death benefits, they will no
longer be in effect and charges for such benefits will stop. The
Guaranteed minimum death benefit will also no longer be in effect.
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, with a signed letter of instruction electing this right, 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 through the date we receive your
contract, and (iv) any 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),
(iii), or (iv) 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.
30 Contract features and benefits
2. Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the values you have in: (i) the variable
investment options; (ii) the guaranteed interest option; (iii) market adjusted
amounts in the fixed maturity options; (iv) the account for special dollar cost
averaging and (v) the loan reserve account (applicable to Rollover TSA
contracts only).
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.
- --------------------------------------------------------------------------------
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 benefit, Guaranteed minimum
income benefit, GPB Option 2 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, which reflects withdrawals out of
the option and charges we deduct. 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.
TERMINATION OF YOUR CONTRACT
Your contract will terminate without value if your account value is
insufficient to pay any applicable charges when due. Your account value could
become insufficient due to withdrawals and/or poor market performance. Upon
such termination, you will lose any applicable guaranteed benefits.
Determining your contract's value 31
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 age 76-80, you must limit your transfers to fixed
maturity options with maturities of seven years or less. If the annuitant
is age 81 or older, you must limit your transfers to fixed maturity
options of five years or less. As of February 14, 2003, maturities of less
than 6 years were not available. 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 and affect
your GPB.
o During the first contract year, transfers into the guaranteed interest option
are not permitted
o After the first contract year, a transfer into the guaranteed interest option
will not be permitted if such transfer would result in more than 25% of
the annuity account value being allocated to the guaranteed interest
option, based on the annuity account value as of the previous business day.
o No transfers are permitted into the Special 10 year fixed maturity option.
In addition, we reserve the right to restrict transfers among variable
investment options as described in your contract, including limitations on the
number, frequency, or dollar amount of transfers.
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 and interest sweep option dollar cost averaging programs
described under "Allocating your contributions" in "Contract features and
benefits" 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.
From time to time, we may remove the restrictions regarding transferring
amounts out of the guaranteed interest option. If we do so, we will tell you.
We will also tell you at least 45 days in advance of the day that we intend to
reimpose the transfer restrictions. When we reimpose the transfer restrictions,
if any dollar cost averaging transfer out of the guaranteed interest option
causes a violation of the 25% outbound restriction, that dollar cost averaging
program will be terminated for the current contract year. A new dollar cost
averaging program can be started in the next or subsequent contract years.
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:
32 Transferring your money among investment options
(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; your rebalancing allocations will not be changed, and
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 any
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 33
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. If you 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. In addition, we have the right to pay the cash
value and terminate this contract if no contributions are made during the last
three completed contract years, and the account value is less than $500, or if
you make a withdrawal that would result in a cash value of less than $500. See
"Surrendering your contract to receive its cash value" below. For the tax
consequences of withdrawals, see "Tax information" later in this Prospectus and
in the SAI.
Please see "Termination of your contract" in "Determining your contract's
value" earlier in this Prospectus and "How withdrawals (and transfers out of
the Special 10 year fixed maturity option) affect your Guaranteed minimum
income benefit, Guaranteed minimum death benefit and Guaranteed principal
benefit option 2," below for more information on how withdrawals affect your
guaranteed benefits and could potentially cause your contract to terminate.
- ------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------
Inherited IRA Yes No 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.
** This contract pays out post-death required minimum distributions. See
"Inherited IRA beneficiary continuation contract" in "Contract features
and benefits" earlier in this prospectus.
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.
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, Rollover IRA and Roth Conversion 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. This option is not available if you have elected a guaranteed principal
benefit.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts)
We offer our "substantially equal withdrawals option" to allow you to receive
distributions from your account value without triggering the 10% additional
federal income tax penalty, which normally applies to distributions made before
age 59-1/2. See "Tax information" later in this Prospectus and in the SAI. This
is not the exclusive method of meeting this exception. After consultation with
your tax advisor, you may decide to use another method which would require you
to compute amounts yourself and request lump sum withdrawals. In such a case, a
withdrawal charge may apply. Once you begin to take substantially
34 Accessing your money
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.
The IRS has recently issued guidance permitting an individual who had elected
to receive substantially equal withdrawals to change, without penalty, from one
of the IRS-approved methods of calculating fixed payments to another
IRS-approved method (similar to the required minimum distribution rules) of
calculating payments which vary each year.
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 using the IRS-approved method 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 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.
Substantially equal withdrawals that we calculate for you are not subject to a
withdrawal charge. This option is not available if you have elected a
guaranteed principal benefit.
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 our "automatic required minimum distribution (RMD) service" to help
you meet lifetime required minimum distributions under federal income tax
rules. This is not the exclusive way for you to meet these rules. After
consultation with your tax adviser, you may decide to compute required minimum
distributions yourself and request lump sum withdrawals. In such a case, a
withdrawal charge may apply.
You may elect this service in the year in which you reach age 70-1/2. The
minimum amount we will pay out is $250. Currently, minimum distribution
withdrawal payments will be made annually. See "Required minimum distributions"
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 if you
are enrolled in our automatic RMD service 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.
Under Rollover TSA contracts, you may not elect our automatic RMD service 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 (other than the Special 10 year fixed maturity
option) in the order of the earliest maturity date(s) first. If the FMO amounts
are insufficient, we will deduct all or a portion of the withdrawal from the
account for special dollar cost averaging. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. A market value adjustment will apply to withdrawals from
the fixed maturity options (including the Special 10 year fixed maturity
option).
HOW WITHDRAWALS (AND TRANSFERS OUT OF THE SPECIAL 10 YEAR FIXED MATURITY
OPTION) AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT, GUARANTEED MINIMUM DEATH
BENEFIT AND GUARANTEED PRINCIPAL BENEFIT OPTION 2
In general, withdrawals will reduce your guaranteed benefits 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 the 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
benefit was $40,000 before the withdrawal, it would be reduced by $16,000
($40,000 X .40) and your new benefit after the withdrawal would be $24,000
($40,000 - $16,000).
Transfers out of the Special 10 year fixed maturity option will reduce the GPB
Option 2 amount on a pro rata basis. In addition, if you make a contract
withdrawal from the Special 10 year fixed maturity option, we will reduce your
GPB Option 2 in a similar manner; however, the reduction will reflect both a
transfer out of the Special 10 year fixed maturity option and a withdrawal from
the contract. Therefore, the reduction in GPB Option 2 is greater when you take
a contract withdrawal from the Special 10 year fixed maturity option than it
would be if you took the withdrawal from another investment option.
Similar to the example above, if your account value is $30,000 and you withdraw
$12,000 from the Special 10 year fixed maturity option, you
Accessing your money 35
have withdrawn 40% of your account value. If your GPB Option 2 benefit was
$40,000 before the withdrawal, the reduction to reflect the transfer out of the
Special 10 year fixed maturity option would equal $16,000 ($40,000 x .40). The
amount used to calculate the reduction to reflect the withdrawal from the
contract is $24,000 ($40,000 - $16,000). The reduction to reflect the
withdrawal would equal $9,600 ($24,000 x .40), and your new benefit after the
withdrawal would be $14,400 ($24,000 - $9,600).
With respect to the Guaranteed minimum income benefit, withdrawals will reduce
the 5% Roll up to age 85 benefit base on a dollar-for-dollar basis, as long as
the sum of withdrawals in a contract year is 5% or less of the 5% Roll up
benefit base on the most recent contract date anniversary. Once a withdrawal is
taken that causes the sum of withdrawals in a contract year to exceed 5% of the
benefit base on the most recent anniversary, that entire withdrawal and any
subsequent withdrawals in that same contract year will reduce the benefit base
pro rata. Reduction on a dollar-for-dollar basis means that your 5% Roll up to
age 85 benefit base will be reduced by the dollar amount of the withdrawal. The
Annual Ratchet to age 85 benefit will always be reduced on a pro rata basis.
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 enrolled in our "automatic required minimum distribution (RMD)
service."
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 and the guaranteed interest option. If these amounts are
insufficient, any additional amount of the loan will be subtracted from the
fixed maturity options (other than the Special 10 year fixed maturity option),
in the order of the earliest maturity date(s) first. A market value adjustment
may apply. If the FMO amounts are insufficient, we will deduct all or a portion
of the loan from the account for special dollar cost averaging. If such amounts
are still insufficient, we will deduct any remaining portion from the Special
10 year fixed maturity option. A market value adjustment will apply to
withdrawals from the fixed maturity options (including the Special 10 year
fixed maturity option).
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.
36 Accessing your money
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, your choice of payout options are those that are available
under the Guaranteed minimum income benefit (see "Our Guaranteed minimum income
benefit option" in "Contract features and benefits" 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
(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 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 Immediate Annuities may be funded through your choice of available
variable investment options investing in portfolios of EQ Advisors Trust. The
contract also offers a fixed income annuity payout option that can be elected
in combination with the variable annuity payout option. The amount of each
variable income 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 NQ and IRA Income Manager payout options provide guaranteed level
payments. The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only).
Accessing your money 37
You may not elect an Income Manager payout option without life contingencies
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 life contingent 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.
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 Pennsylvania and New York, the maturity date is related
to the contract issue date, as follows:
- ------------------------------------------------------------------------------
New York Pennsylvania
- ------------------------------------------------------------------------------
Maximum Maximum
annuitization annuitization
Issue age age Issue Age age
- ------------------------------------------------------------------------------
0-80 90 0-75 85
81 91 76 86
82 92 77 87
83 93 78-80 88
84 94 81-85 90
85 95
- ------------------------------------------------------------------------------
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.
38 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 Guaranteed minimum
income benefit, if you elect this optional benefit.
o On each contract date anniversary -- a charge for Protection Plus, if you
elect this optional benefit.
o On the first 10 contract date anniversaries -- a charge for GPB Option 2, 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.
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 0.30% 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 (other than the Special 10 year
fixed maturity option) in order of the earliest maturity date(s) first. If such
fixed maturity option amounts are insufficient, we will deduct all or a portion
of the charge from the account for special dollar cost averaging. If such
amounts are still insufficient, we will deduct any remaining portion from the
Special 10 year fixed maturity option. If the contract is surrendered or
annuitized or a death benefit is paid, we will deduct a pro rata portion of the
charge for that year. A market value adjustment will apply to deductions from
the fixed maturity options (including the Special 10 year fixed maturity
option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract's
value" earlier in this Prospectus.
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
Charges and expenses 39
your contract to receive its cash value or to apply your cash value to a
non-life contingent annuity payout option.
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 contribution 8 % 7 % 6 % 5 % 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 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, or in the case of the first contract year, your initial
contribution, minus any other withdrawals made during the contract year. The
10% free withdrawal amount does not apply if you surrender your contract except
where required by law.
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 investment in fixed maturity Year of transfer maturity within fixed
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.
40 Charges and expenses
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/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
(other than the Special 10 year fixed maturity option) in the order of the
earliest maturity dates first. If such fixed maturity option amounts are
insufficient, we will deduct all or a portion of the charge from the account
for special dollar cost averaging. If such amounts are still insufficient, we
will deduct any remaining portion from the Special 10 year fixed maturity
option. If the contract is surrendered or annuitized or a death benefit is
paid, we will deduct a pro rata portion of the annual administrative charge for
that year. A market value adjustment will apply to deductions from the fixed
maturity options (including the Special 10 year fixed maturity option).
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 for which it is in effect. The charge is equal to
0.25% of the Annual Ratchet to age 85 benefit base.
Greater of 5% 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 for which it is in effect. The charge is equal
to 0.50% of the greater of the 5% Roll up to age 85 or the Annual Ratchet to
age 85 benefit base.
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 (other than the Special 10 year fixed maturity option) in the
order of the earliest maturity date(s) first. If such fixed maturity option
amounts are insufficient, we will deduct all or a portion of the charge from
the account for special dollar cost averaging. If such amounts are still
insufficient, we will deduct any remaining portion from the Special 10 year
fixed maturity option. If the contract is surrendered or annuitized or a death
benefit is paid, we will deduct a pro rata portion of the charge for that year.
A market value adjustment will apply to deductions from the fixed maturity
options (including the Special 10 year fixed maturity option).
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract's
value" earlier in this Prospectus.
There is no additional charge for the standard death benefit.
GUARANTEED PRINCIPAL BENEFIT OPTION 2
If you purchase GPB Option 2, we deduct a charge annually from your account
value on the first 10 contract date anniversaries. The charge is equal to 0.50%
of the account value. We will deduct this charge from your value in the
variable investment options and the guaranteed interest option on a pro rata
basis. If these amounts are insufficient, we will deduct any remaining portion
of the charge from amounts in any fixed maturity options (other than the
Special 10 year fixed maturity option) in the order of the earliest maturity
date(s) first. If such amounts are insufficient, we will deduct all or a
portion from the account for special dollar cost averaging. If such amounts are
still insufficient, we will deduct any remaining portion from the Special 10
year fixed maturity option. If the contract is surrendered or annuitized or a
death benefit is paid, we will deduct a pro rata portion of the charge for that
year. A market value adjustment will apply to deductions from the fixed
maturity options (including the Special 10 year fixed maturity option).
GUARANTEED MINIMUM INCOME BENEFIT CHARGE
If you elect the Guaranteed minimum income 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 0.55% 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 the order of the earliest maturity date(s) first. If such
fixed maturity option amounts are still insufficient, we will deduct all or a
portion of the charge from the account for special dollar cost averaging. If
the contract is surrendered or annuitized or a death benefit is paid, we will
deduct a pro rata portion of the annual administrative charge for that year. A
market value adjustment will apply to deductions from the fixed maturity
options.
If your account value is insufficient to pay this charge, your contract will
terminate without value and you will lose any applicable guaranteed benefits.
Please see "Termination of your contract" in "Determining your contract's
value" earlier in this Prospectus.
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
Charges and expenses 41
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 (other than the Special 10 year
fixed maturity option) in the order of the earliest maturity date(s) first. If
such fixed maturity option amounts are insufficient, we will deduct all or a
portion of the charge from the account for special dollar cost averaging. If
such amounts are still insufficient, we will deduct any remaining portion from
the Special 10 year fixed maturity option. If the contract is surrendered or
annuitized or a death benefit is paid, we will deduct a pro rata portion of the
charge for that year. A market value adjustment will apply to deductions from
the fixed maturity options (including the Special 10 year fixed maturity
option).
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 jurisdiction and ranges from 0% to 3.5%.
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 0.10% 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 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.
42 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
surviving spouse who is the sole primary beneficiary, of the deceased
owner/annuitant can choose to be treated as the successor owner/annuitant and
continue the contract. The Successor owner/ annuitant feature is only
available under NQ and individually owned IRA (other than Inherited IRAs)
contracts. See "Inherited IRA beneficiary continuation contract" in "Contract
features and benefits" earlier in this prospectus.
For NQ and all types of 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. An eligible successor owner,
including a surviving joint owner after the first owner dies, may elect the
beneficiary continuation option for NQ contracts discussed in "Beneficiary
continuation option" below.
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.
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. The successor owner/annuitant must be 85 or younger as of the
date of the non-surviving spouse's death.
If your surviving spouse decides to continue the contract, then as of the date
we receive satisfactory proof of your death, any required
Payment of death benefit 43
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 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.
We will determine whether your applicable Guaranteed minimum death benefit
option will continue as follows:
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was age 84
or younger at death, the Guaranteed minimum death benefit continues based upon
the option that was elected by the original owner/annuitant and will continue
to grow according to its terms until the contract date anniversary following
the date the successor owner/annuitant reaches age 85.
o If the successor owner/annuitant is age 75 or younger on the date of the
original owner/annuitant's death, and the original owner/ annuitant was age 85
or older at death, we will reinstate the Guaranteed minimum death benefit that
was elected by the original owner/annuitant. The benefit will continue to grow
according to its terms until the contract date anniversary following the date
the successor owner/annuitant reaches age 85.
o If the successor owner/annuitant is age 76 or over on the date of the
original owner/annuitant's death, the Guaranteed minimum death benefit will no
longer grow, and we will no longer charge for the benefit.
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.
For information on the operation of this feature with the Guaranteed minimum
income benefit, see "Exercise of Guaranteed minimum income benefit" under "Our
Guaranteed minimum income benefit option" in "Contract features and benefits"
earlier in this Prospectus. For information on the operation of this feature
with Protection Plus, see "Protection Plus" in "Guaranteed minimum death
benefit" under "Contract features and benefits," earlier in this Prospectus.
SPOUSAL PROTECTION
SPOUSAL PROTECTION OPTION FOR NQ CONTRACTS ONLY. This feature permits spouses
who are joint contract owners to increase the account value to equal the
guaranteed minimum death benefit, if higher, and by the value of any Protection
Plus benefit, if elected, upon the death of either spouse. This account value
"step up" occurs even if the surviving spouse was the named annuitant. If you
and your spouse jointly own the contract and one of you is the named annuitant,
you may elect the Spousal protection option at the time you purchase your
contract at no additional charge. Both spouses must be between the ages of 20
and 70 at the time the contract is issued and must each be named the primary
beneficiary in the event of the other's death.
The annuitant's age is generally used for the purpose of determining contract
benefits. However, for the Annual Ratchet to age 85 and the Greater of 5% Roll
up to age 85 or Annual Ratchet to age 85 guaranteed minimum death benefits and
the Protection Plus benefit, the benefit is based on the older spouse's age.
The older spouse may or may not be the annuitant.
If the annuitant dies prior to annuitization, the surviving spouse may elect to
receive the death benefit, including the value of the Protection Plus benefit,
or if eligible, continue the contract as the sole owner/ annuitant by electing
the successor owner/annuitant option. If the non-annuitant spouse dies prior to
annuitization, the surviving spouse continues the contract automatically as the
sole owner/annuitant. In either case, the contract would continue, as follows:
o As of the date we receive due proof of the spouse's death, the account value
will be re-set to equal the Guaranteed minimum death benefit as of the date of
the non-surviving spouse's death, if higher, increased by the value of the
Protection Plus benefit.
o The Guaranteed minimum death benefit continues to be based on the older
spouse's age for the life of the contract, even if the younger spouse is
originally or becomes the sole owner/annuitant.
o The Protection Plus benefit will now be based on the surviving spouse's age
at the date of the non-surviving spouse's death for the remainder of the life
of the contract. If the benefit had been previously frozen because the older
spouse had attained age 80, it will be reinstated if the surviving spouse is
age 75 or younger. The benefit is then frozen on the contract date anniversary
after the surviving spouse reaches age 80. If the surviving spouse is age 76
or older, the benefit will be discontinued even if the surviving spouse is the
older spouse (upon whose age the benefit was originally based).
o If the annuitant dies first, withdrawal charges will no longer apply to any
contributions made prior to the annuitant's death. If the non-annuitant spouse
dies first, the withdrawal charge schedule remains in effect with regard to
all contributions.
We will not allow Spousal protection to be added after contract issue. If there
is a change in owner or primary beneficiary, the Spousal protection benefit
will be terminated. If you divorce, but do not change the owner or primary
beneficiary, Spousal protection continues.
BENEFICIARY CONTINUATION OPTION
This feature permits a designated individual, on the contract owner's death, to
maintain a contract in the deceased contract owner's name and receive
distributions under the contract, instead of receiving the death benefit in a
single sum. We make this option available to ben-
44 Payment of death benefit
eficiaries under traditional IRA, Roth IRA and NQ contracts, subject to state
availability. Please speak with your financial professional for further
information.
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA AND ROTH IRA CONTRACTS
ONLY. The beneficiary continuation option must be elected by September 30th of
the year following calendar year of your death and before any other
inconsistent election is made. Beneficiaries who do not make a timely election
will not be eligible for this option. If the election is made, then, as of the
date we receive satisfactory proof of death, any required instructions,
information and forms necessary to effect the beneficiary continuation option
feature, we will increase the account value to equal the applicable death
benefit if such death benefit is greater than such account value. Where an IRA
contract is owned in a custodial individual retirement account, the custodian
may reinvest the death benefit in an individual retirement annuity contract,
using the account beneficiary as the annuitant. Please speak with your
financial professional for further information.
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. For sole
spousal beneficiaries, payments may begin by December 31st of the calendar year
in which you would have reached age 70-1/2, if such time is later. For
traditional IRA contracts only, if you die before your Required Beginning Date
for Required Minimum Distributions, as discussed in the Statement of Additional
Information, the beneficiary may choose the "5-year rule" option instead of
annual payments over life expectancy. The 5-year rule is always available to
beneficiaries under Roth IRA contracts. If the beneficiary chooses this option,
the beneficiary may take withdrawals as desired, but the entire account value
must be fully withdrawn by December 31st of the calendar year which contains
the fifth anniversary of your death.
Under the beneficiary continuation option for IRA and Roth IRA contracts:
o The contract continues in your name for the benefit of your beneficiary.
o This feature is only available if the beneficiary is an individual. Certain
trusts with only individual beneficiaries will be treated as individuals for
this purpose.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the beneficiary's own
life expectancy, if payments over life expectancy are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the contract, they will no longer
be in effect and charges for such benefits will stop. Also, any minimum death
benefit feature 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, if any, will apply.
o Any partial withdrawal must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking required minimum distributions based on
the remaining life expectancy of the deceased beneficiary or to receive any
remaining interest in the contract in a lump sum. The option elected will be
processed when we receive satisfactory proof of death, any required
instructions for the method of payment and any required information and forms
necessary to effect payment.
BENEFICIARY CONTINUATION OPTION FOR NQ CONTRACTS ONLY. This feature, also known
as Inherited annuity, may only be elected when the NQ contract owner dies
before the annuity commencement date, whether or not the owner and the
annuitant are the same person. If the owner and annuitant are different and the
owner dies before the annuitant, for purposes of this discussion, "beneficiary"
refers to the successor owner. For a discussion of successor owner, see "When
an NQ contract owner dies before the annuitant" earlier in this section. This
feature must be elected within 9 months following the date of your death and
before any inconsistent election is made. Beneficiaries who do not make a
timely election will not be eligible for this option.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy, determined on a term certain basis and in the
year payments start. These payments must begin no later than one year after the
date of your death and are referred to as "scheduled payments." The beneficiary
may choose the "5-year rule" instead of scheduled payments over life
expectancy. If the beneficiary chooses the 5-year rule, there will be no
scheduled payments. Under the 5-year rule, the beneficiary may take withdrawals
as desired, but the entire account value must be fully withdrawn by the fifth
anniversary of your death.
Under the beneficiary continuation option for NQ contracts (regardless of
whether the owner and the annuitant are the same person):
o This feature is only available if the beneficiary is an individual. It is not
available for any entity such as a trust, even if all of the beneficiaries of
the trust are individuals.
o The contract continues in your name for the benefit of your beneficiary.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the respective
beneficiary's own life expectancy, if scheduled payments are chosen.
o The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o If you had elected the Guaranteed minimum income benefit, an optional
enhanced death benefit or GPB Option 2 under the con-
Payment of death benefit 45
tract, they will no longer be in effect and charges for such benefits will
stop. Also, any minimum death benefit feature will no longer be in effect.
o If the beneficiary chooses the "5-year rule," withdrawals may be made at any
time. If the beneficiary chooses scheduled payments, the beneficiary must also
choose between two potential withdrawal options at the time of election.
"Withdrawal Option 1" permits total surrender only. "Withdrawal Option 2"
permits the beneficiary to take withdrawals, in addition to scheduled
payments, at any time. See "Taxation of nonqualified annuities" in "Tax
information" later in this Prospectus.
o Any partial withdrawals must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract on the beneficiary's death.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking scheduled payments based on the remaining
life expectancy of the deceased beneficiary (if scheduled payments were
chosen) or to receive any remaining interest in the contract in a lump sum. We
will pay any remaining interest in the contract in a lump sum if your
beneficiary elects the 5-year rule. The option elected will be processed when
we receive satisfactory proof of death, any required instructions for the
method of payment and any required information and forms necessary to effect
payment.
If you are both the owner and annuitant:
o As of the date we receive satisfactory proof of death, any required
instructions, information and forms necessary to effect the beneficiary
continuation option feature, we will increase the annuity account value to
equal the applicable death benefit if such death benefit is greater than such
account value.
o No withdrawal charges, if any, will apply to any withdrawals by the
beneficiary.
If the owner and annuitant are not the same person:
o If the beneficiary continuation option is elected, the beneficiary
automatically becomes the new annuitant of the contract, replacing the
existing annuitant.
o The annuity account value will not be reset to the death benefit amount.
o The contract's withdrawal charge schedule will continue to be applied to any
withdrawal or surrender other than scheduled payments; the contract's free
corridor amount will continue to apply to withdrawals but does not apply to
surrenders.
o We do not impose a withdrawal charge on scheduled payments except if, when
added to any withdrawals previously taken in the same contract year, including
for this purpose a contract surrender, the total amount of withdrawals and
scheduled payments exceed the free corridor amount. See the "Withdrawal
charges" in "Charges and expenses" earlier in this Prospectus.
If a contract is jointly owned:
o The surviving owner supersedes any other named beneficiary and may elect the
beneficiary continuation option.
o If the deceased joint owner was also the annuitant, see "If you are both the
owner and annuitant" earlier in this section.
o If the deceased joint owner was not the annuitant, see "If the owner and
annuitant are not the same person" earlier in this section.
46 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 individual taxpayers. The tax rules can differ, depending on the
type of contract, whether NQ, traditional IRA, Roth Conversion IRA, QP or 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
without notice. 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 or values under the contract, or payments under the contract,
for example, amounts due to beneficiaries, may be subject to federal or state
gift, estate, or inheritance taxes. You should not rely only on this document,
but should consult your tax advisor 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 Guaranteed minimum income benefit,
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. Although certain provisions of the Temporary Regulations on required
minimum distributions concerning the actuarial value of additional contract
benefits, which could have increased the amount required to be distributed from
annuity contracts funding qualified plans, TSAs and IRAs have been suspended
for 2003, these or similar provisions may apply in future years. You may want
to discuss with your tax advisor the potential implication of these Regulations
before you purchase this annuity contract or purchase additional features under
this annuity contract. 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).
Tax information 47
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) 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 could 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. The IRS has not specifically addressed the tax treatment
of the Spousal protection benefit. Please consult with your tax advisor before
electing this feature.
Beneficiary continuation option
We have received a Private Letter Ruling from the IRS regarding certain tax
consequences of scheduled payments under the beneficiary continuation option
for NQ contracts. See the discussion "Beneficiary continuation option for NQ
Contracts only" in "Payment of death benefit" earlier in this Prospectus. Among
other things, the IRS rules that:
o scheduled payments under the beneficiary continuation option for NQ contracts
satisfy the death of owner rules of Section 72(s)(2) of the Code, regardless
of whether the beneficiary elects Withdrawal Option 1 or Withdrawal Option 2;
o scheduled payments, any additional withdrawals under Withdrawal Option 2, or
contract surrenders under Withdrawal Option 1 will only be taxable to the
beneficiary when amounts are actually paid, regardless of the Withdrawal
Option selected by the beneficiary;
o a beneficiary who irrevocably elects scheduled payments with Withdrawal
Option 1 will receive "excludable amount" tax treatment on scheduled payments.
See "Annuity payments" earlier in this section. If the beneficiary elects to
surrender the contract before all scheduled payments are paid, the amount
received upon surrender is a non-annuity payment taxable to the extend it
exceeds any remaining investment in the contract.
48 Tax information
The Ruling does not specifically address the taxation of any payments received
by a beneficiary electing Withdrawal Option 2 (whether scheduled payments or
any withdrawal that might be taken). There is no assurance that we will receive
any further rulings addressing the tax consequences of payments under
Withdrawal Option 2. Before electing the beneficiary continuation option
feature, the individuals you designate as beneficiary or successor owner should
discuss with their tax advisors the consequences of such elections.
The tax treatment of a withdrawal after the death of the owner taken as a
single sum or taken as withdrawals under the 5-year rule is generally the same
as the tax treatment of a withdrawal from or surrender of 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, in accordance with IRS formulas.
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.
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, 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"). We also offer the Inherited IRA for payment of post-death
required minimum distributions in traditional IRA and Roth IRA. The SAI
contains the information that the IRS requires you to have before you purchase
an IRA. The disclosure generally assumes direct ownership of the individual
retirement annu-
Tax information 49
ity 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.
We have not applied for an opinion letter from the IRS to approve the
respective forms of the Equitable Accumulator(R) Elite(SM) traditional and Roth
IRA contracts for use as a traditional and Roth IRA, respectively. We have
received IRS opinion letters approving the respective forms of a similar
traditional IRA and Roth IRA endorsement for use as a traditional 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 contracts submitted for IRS approval do not include every
feature possibly available under the Equitable Accumulator(R) traditional and
Roth IRA contracts.
The inherited IRA beneficiary continuation contract has not been submitted to
the IRS for approval as to form for use as a traditional IRA or Roth IRA.
Equitable intends to submit both traditional and Roth IRA versions of the
contract for formal approval, respectively. However, it is not clear whether
and when such approval may be received.
PROTECTION PLUS(SM) FEATURE
The Protection Plus feature is offered for IRA contracts, subject to state and
contract availability. We have received IRS opinion letters that the contract
with a similar Protection Plus feature qualifies 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 contracts submitted for IRS approval
do not include every feature possibly available under the Equitable
Accumulator(R) traditional and Roth IRA contracts. You should discuss with your
tax advisor 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
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 the taxable year for which the contribution is made is $3,000. The amounts
are the same for both 2003 and 2004. The maximum regular contribution for both
2003 and 2004 is increased to $3,500 if you are at least age 50 at any time
during the taxable year for which the contribution is made.
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 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.
Certain distributions from Roth IRAs may qualify for fully tax-free treatment.
These are 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.
50 Tax information
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 annuity 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 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, the IRS has not
specifically addressed this question. 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 must establish your TSA with
funds that are directly transferred from another 403(b) arrangement or rolled
over from another 403(b) arrangement. You may make subsequent rollover
contributions to your Rollover TSA contract from these sources: qualified
plans, governmental 457(b) plans and traditional IRAs as well as other TSAs and
403(b) arrangements. 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 which 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
Tax information 51
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 accept
after-tax funds, we do not track your investment in the contract, if any. We
will report all distributions from this Rollover TSA as fully taxable. 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-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 $15,840 in periodic
52 Tax information
annuity payments in 2003, 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 53
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 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
The 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.
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, and other aspects
of its operations, appears in the prospectuses for each Trust, which accompany
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 14, 2003
and the related price per $100 of maturity value were as shown below:
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Fixed maturity options
with February 14th Rate to maturity
maturity date of as of Price per $100
maturity year February 14, 2003 of maturity value
- --------------------------------------------------------------------------------
2004 3.00%* $ 97.09
2005 3.00%* $ 94.25
2006 3.00%* $ 91.51
2007 3.00%* $ 88.84
2008 3.00%* $ 86.25
2009 3.11% $ 83.20
2010 3.49% $ 78.64
2011 3.76% $ 74.42
2012 3.96% $ 70.49
2013 4.19% $ 66.31
- --------------------------------------------------------------------------------
* Since these rates to maturity are 3%, no amounts could have been allocated to
these 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 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.
54 More information
(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 for your FMO based on the rate
for a new FMO issued on the same date and having the same maturity date
as your FMO; if the same maturity date is not available for new FMOs, we
determine a rate that is between the rates for new FMO maturities that
immediately precede and immediately follow your FMOs maturity date.
(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 by using a widely published index. 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 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. We may also treat contributions wired by certain
broker-dealers as received by us on the day we receive all the required
information, subject to receipt of the wired funds on the following business
day.
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
More information 55
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, nor is it
available with GPB Option 2.
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.
o For the fixed-dollar option and the interest sweep option, the first monthly
transfer will occur on the last business day of the month following the month
that we receive your election form at our processing office.
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
56 More information
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.
The Trusts sell their shares to Equitable Life separate accounts in connection
with Equitable Life's variable annuity and/or life insurance products, and to
separate accounts of insurance companies, both affiliated and unaffiliated with
Equitable Life. EQ Advisors Trust and AXA Premier VIP Trust also sell their
shares to the trustee of a qualified plan for Equitable Life. We currently do
not foresee any disadvantages to our policyowners arising out of these
arrangements. However, the Board of Trustee or Directors of each Trust intends
to monitor events 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 Board's response insufficiently protects our policyowners, we
will see to it that appropriate action is taken to do so.
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, 2002
and 2001, and for the three years ended December 31, 2002 incorporated in this
prospectus by reference to the 2002 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 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 5,5% of total contributions made under the contracts. AXA
Distributors may also receive compensation and
More information 57
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.
58 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 highest optional enhanced death benefit charge, the
optional charge for Guaranteed principal benefit option 2, the optional 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
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 this table, of $0.13 per $1,000.
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 are being
offered for the first time as of the date of this Prospectus.
For the "EQ/Alliance" portfolios (other than EQ/Alliance Premier Growth and
EQ/Alliance Technology) and the AXA Premier VIP High Yield, AXA Premier VIP
Aggressive Equity and AXA Moderate Allocation portfolios, 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/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.
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 59
TABLE FOR SEPARATE ACCOUNT 49
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 2002:
- -------------------------------------------------------------------------------------------------------------
Length of option period
--------------------------------------------------------
Since option
Variable investment options 1 Year 5 Years inception*
- -------------------------------------------------------------------------------------------------------------
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/Aggressive Stock *** (39.40)% (14.57)% (10.94)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock *** (43.78)% ( 6.82)% ( 1.15)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income *** -- -- --
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities *** -- -- --
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance International *** -- -- --
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth (41.65)% -- (22.46)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond *** -- -- --
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (40.75)% ( 6.57)% ( 1.95)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology (51.07)% -- (45.08)%
- -------------------------------------------------------------------------------------------------------------
EQ/Balanced *** (23.58)% ( 0.03)% (18.64)%
- -------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value (24.46)% -- ( 1.49)%
- -------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible (37.01)% -- (27.54)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International (25.86)% -- (11.85)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research (35.31)% -- ( 9.49)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity (34.38)% -- (10.63)%
- -------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity (16.90)% ( 8.57)% ( 8.58)%
- -------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index *** (33.04)% ( 4.20)% 1.53%
- -------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega (34.61)% -- (16.82)%
- -------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap (29.16)% -- (19.92)%
- -------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value (25.53)% ( 6.44)% ( 7.61)%
- -------------------------------------------------------------------------------------------------------------
EQ/High Yield *** (14.03)% ( 7.47)% ( 3.56)%
- -------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond ( 1.71)% -- 3.89%
- -------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth (40.96)% -- (36.20)%
- -------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value (24.72)% -- ( 0.70)%
- -------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus (22.48)% -- ( 8.20)%
- -------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity (27.45)% 2.33% 4.72%
- -------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (44.77)% ( 6.74)% ( 2.76)%
- -------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (31.75)% -- (12.97)%
- -------------------------------------------------------------------------------------------------------------
EQ/Money Market *** ( 9.87)% 0.85% 1.03%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth and Income Value (29.80)% ( 5.33)% ( 2.35)%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity (27.44)% ( 1.12)% 0.33%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager (36.89)% ( 7.04)% ( 2.68)%
- -------------------------------------------------------------------------------------------------------------
EQ/Small Company Index (31.63)% -- ( 4.85)%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Length of portfolio period
--------------------------------------------------------
Since
portfolio
Variable investment options 3 Years 5 Years 10 Years inception**
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Core Bond -- -- -- ( 3.09)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Health Care -- -- -- (30.69)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP International Equity -- -- -- (31.59)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Core Equity -- -- -- (33.19)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Growth -- -- -- (41.66)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Large Cap Value -- -- -- (30.59)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Growth -- -- -- (47.54)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Small/Mid Cap Value -- -- -- (35.88)%
- -------------------------------------------------------------------------------------------------------------
AXA Premier VIP Technology -- -- -- (52.82)%
- -------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock *** (29.66)% (14.57)% (2.28)% 6.38%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Common Stock *** (26.70)% ( 6.82)% 4.83% 8.83%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Growth and Income *** (11.06)% 0.70% -- 5.93%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Intermediate Government Securities *** 3.32% 3.19% 2.71% 3.31%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance International *** (25.79)% ( 7.43)% -- ( 3.88)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth (31.88)% -- -- (22.46)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Quality Bond *** 3.90% 3.21% -- 2.68%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Small Cap Growth (17.53)% ( 6.57)% -- ( 1.95)%
- -------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology -- -- -- (45.08)%
- -------------------------------------------------------------------------------------------------------------
EQ/Balanced *** (11.21)% ( 0.03)% 2.87% 6.11%
- -------------------------------------------------------------------------------------------------------------
EQ/Bernstein Diversified Value ( 9.96)% -- -- ( 1.49)%
- -------------------------------------------------------------------------------------------------------------
EQ/Calvert Socially Responsible (21.38)% -- -- (17.18)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian International (24.94)% -- -- (11.85)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian Research (13.52)% -- -- ( 9.49)%
- -------------------------------------------------------------------------------------------------------------
EQ/Capital Guardian U.S. Equity (13.82)% -- -- (10.63)%
- -------------------------------------------------------------------------------------------------------------
EQ/Emerging Markets Equity (25.64)% ( 8.57)% -- (12.51)%
- -------------------------------------------------------------------------------------------------------------
EQ/Equity 500 Index *** (21.14)% ( 4.20)% -- 5.76%
- -------------------------------------------------------------------------------------------------------------
EQ/Evergreen Omega (24.13)% -- -- (16.82)%
- -------------------------------------------------------------------------------------------------------------
EQ/FI Mid Cap -- -- -- (20.13)%
- -------------------------------------------------------------------------------------------------------------
EQ/FI Small/Mid Cap Value ( 7.71)% ( 6.44)% -- ( 2.88)%
- -------------------------------------------------------------------------------------------------------------
EQ/High Yield *** ( 9.38)% ( 7.47)% 2.17% 3.37%
- -------------------------------------------------------------------------------------------------------------
EQ/J.P. Morgan Core Bond 4.57% -- -- 3.89%
- -------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap Growth -- -- -- (36.36)%
- -------------------------------------------------------------------------------------------------------------
EQ/Lazard Small Cap Value 1.30% -- -- ( 0.70)%
- -------------------------------------------------------------------------------------------------------------
EQ/Marsico Focus -- -- -- ( 7.90)%
- -------------------------------------------------------------------------------------------------------------
EQ/Mercury Basic Value Equity ( 5.86)% 2.33% -- 4.72%
- -------------------------------------------------------------------------------------------------------------
EQ/MFS Emerging Growth Companies (37.30)% ( 6.74)% -- ( 2.76)%
- -------------------------------------------------------------------------------------------------------------
EQ/MFS Investors Trust (18.99)% -- -- (12.97)%
- -------------------------------------------------------------------------------------------------------------
EQ/Money Market *** ( 1.65)% 0.85% 0.86% 2.96%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth and Income Value (12.55)% ( 5.33)% -- ( 2.35)%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity (23.31)% ( 1.12)% -- 0.33%
- -------------------------------------------------------------------------------------------------------------
EQ/Putnam Voyager (29.92)% ( 7.04)% -- ( 2.68)%
- -------------------------------------------------------------------------------------------------------------
EQ/Small Company Index (13.66)% -- -- ( 4.85)%
- -------------------------------------------------------------------------------------------------------------
* The variable investment option inception dates are: AXA Premier VIP
Aggressive Equity, AXA Premier VIP High Yield, EQ/Alliance Common Stock,
EQ/Money Market and EQ/Equity 500 Index (October 16, 1996); EQ/Alliance
Small Cap Growth, EQ/Mercury Basic Value Equity, EQ/MFS Emerging Growth
Companies, 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/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); AXA Moderate
Allocation (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 (January 14, 2002);
EQ/Alliance Intermediate Government Securities (April 1, 2002);
60 Investment performance
AXA Rosenberg VIT Value Long/Short Equity and U.S. Real Estate -- Class I
(July 21, 2003); AXA Aggressive Allocation Portfolio, AXA Conservative
Allocation Portfolio, AXA Conservative-Plus Allocation Portfolio and AXA
Moderate-Plus Allocation Portfolio (July 31, 2003). No performance
information is provided for portfolios and/or variable investment options
with inception dates after December 31, 2001.
** The portfolio inception dates are: EQ/Alliance Common Stock (January 13,
1976); EQ/Money Market (July 13, 1981); AXA Moderate Allocation and AXA
Premier VIP Aggressive Equity (January 27, 1986); AXA Premier VIP High
Yield (January 2, 1987); 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/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/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/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); U.S. Real Estate -- Class I (May 3, 1997); AXA
Rosenberg VIT Value Long/Short Equity (May 2, 2003); AXA Aggressive
Allocation Portfolio, AXA Conservative Allocation Portfolio, AXA
Conservative-Plus Allocation Portfolio, AXA Moderate-Plus Allocation
Portfolio (July 31, 2003). No performance information is provided for
portfolios and/or variable investment options with inception dates after
December 31, 2001.
*** In each case, the performance shown is for the indicated EQ Advisors Trust
portfolio and any predecessor that it may have had. The inception dates
for these portfolios 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.
Investment performance 61
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/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 AXA Premier VIP 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/Money Market, EQ/Alliance Quality Bond and AXA
Premier VIP 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
Guaranteed minimum income benefit charge, the optional Protection Plus benefit
charge, the optional Guaranteed principal benefit option 2 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/Money Market Option, EQ/Alliance
Quality Bond Option and AXA Premier VIP High Yield Option" in the SAI.
62 Investment performance
10. Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
2002 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 63
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Appendix I: 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 advisors 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;
o although certain provisions of the Temporary Regulations on required minimum
distributions which would have required that the actuarial value of
additional annuity contract benefits be added to the dollar amount credited
for purposes of calculating required minimum distributions have been
suspended for 2003, these or similar provisions may apply in future years,
and could increase the amounts required to be distributed from the contract;
and
o the Guaranteed minimum income 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 I: Purchase considerations for QP contracts A-1
(This page intentionally left blank)
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 14, 2004 to a fixed maturity option with a maturity date of
February 14, 2013 (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 14, 2008.
- --------------------------------------------------------------------------------
Hypothetical assumed
rate to maturity on
February 14, 2008
-------------------
5.00% 9.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
As of February 14, 2008 (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 14, 2008 (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: 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/Money Market, the
guaranteed interest option, the fixed maturity options or the Special 10 year
fixed maturity option), 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 5% Roll up to age 85 Annual Ratchet to age 85
year Account value enhanced death benefit enhanced death benefit
- --------------------------------------------------------------------------------------
1 $105,000 $105,000 $105,000
- --------------------------------------------------------------------------------------
2 $115,500 $110,250 $115,500
- --------------------------------------------------------------------------------------
3 $129,360 $115,763 $129,360
- --------------------------------------------------------------------------------------
4 $103,488 $121,551 $129,360
- --------------------------------------------------------------------------------------
5 $113,837 $127,628 $129,360
- --------------------------------------------------------------------------------------
6 $127,497 $134,010 $129,360
- --------------------------------------------------------------------------------------
7 $127,497 $140,710 $129,360
- --------------------------------------------------------------------------------------
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 85
(1) At the end of contract years 1 through 3, the enhanced death benefit is the
current account value.
(2) 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 5% 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 5% Roll up to age 85 or the Annual
Ratchet to age 85.*
* At the end of contract years 4 through 7, the death benefit will be the
enhanced death benefit. At the end of contract years 1, 2 and 3, the death
benefit will be the current account value.
Appendix III: Enhanced death benefit example C-1
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Appendix IV: Hypothetical illustrations
- --------------------------------------------------------------------------------
ILLUSTRATION OF ACCOUNT VALUES, CASH VALUES AND
CERTAIN GUARANTEED MINIMUM BENEFITS
The following tables illustrate the changes in account value, cash value and
the values of the "greater of 5% Roll up to age 85 or the Annual Ratchet to age
85" guaranteed minimum death benefit, the Protection Plus benefit and the
Guaranteed minimum income benefit under certain hypothetical circumstances for
an Accumulator(R) Elite(SM) contract. The table illustrates the operation of a
contract based on a male, issue age 60, who makes a single $100,000
contribution and takes no withdrawals. The amounts shown are for the beginning
of each contract year and assume that all of the account value is invested in
portfolios that achieve investment returns at constant gross annual rates of 0%
and 6% (i.e., before any investment management fees, 12b-1 fees or other
expenses are deducted from the underlying portfolio assets). After the
deduction of the arithmetic average of the investment management fees, 12b-1
fees and other expenses of all of the underlying portfolios (as described
below), the corresponding net annual rates of return would be 3.03% and 2.97%
for the Accumulator(R) Elite(SM) contract, at the 0% and 6% gross annual rates,
respectively. These net annual rates of return reflect the trust and separate
account level charges, but they do not reflect the charges we deduct from your
account value annually for the optional Guaranteed minimum death benefit,
Protection Plus benefit and the Guaranteed minimum income benefit features, as
well as the annual administrative charge. If the net annual rates of return did
reflect these charges, the net annual rates of return would be lower; however,
the values shown in the following tables reflect all contract charges. The
values shown under "Lifetime annual guaranteed minimum income benefit" reflect
the lifetime income that would be guaranteed if the Guaranteed minimum income
benefit is selected at that contract anniversary. An "N/A" in these columns
indicates that the benefit is not exercisable in that year. A "0" under any of
the death benefit and/or "Lifetime annual guaranteed minimum income benefit"
columns indicates that the contract has terminated due to insufficient account
value and, consequently, the guaranteed benefit has no value.
With respect to fees and expenses deducted from assets of the underlying
portfolios, the amounts shown in all tables reflect (1) investment management
fees equivalent to an effective annual rate of .74%, and (2) an assumed average
asset charge for all other expenses of the underlying portfolios equivalent to
an effective annual rate of .39% and (3) 12b-1 fees equivalent to an effective
annual rate of 0.25%. These rates are the arithmetic average for all portfolios
that are available as investment options. In other words, they are based on the
hypothetical assumption that account values are allocated equally among the
variable investment options. The actual rates associated with any contract will
vary depending upon the actual allocation of policy values among the investment
options. These rates do not reflect expense limitation arrangements in effect
with respect to certain of the underlying portfolios, as described in the
footnotes to the fee table for the underlying portfolios in "Fee Table" earlier
in this prospectus. With these arrangements, the charges shown above would be
lower. This would result in higher values than those shown in the following
tables.
Because your circumstances will no doubt differ from those in the illustrations
that follow, values under your contract will differ, in most cases
substantially. Upon request, we will furnish you with a personalized
illustration.
Appendix IV: Hypothetical illustrations D-1
Variable deferred annuity
Accumulator(R) Elite(SM)
$100,000 Single contribution and no withdrawals
Male, issue age 60
Benefits:
Greater of 5% Roll up to age 85 and the Annual Ratchet to age 85 Guaranteed
minimum death benefit
Protection Plus
Guaranteed minimum income benefit
Greater of 5% Roll
up to age 85
and the Annual
Ratchet
to age 85
Guaranteed
minimum death
Account value Cash value benefit
------------------- ------------------ -------------------
Age Contract year 0% 6% 0% 6% 0% 6%
- ----- -------------- --------- --------- -------- --------- --------- ---------
60 1 100,000 100,000 92,000 92,000 100,000 100,000
61 2 95,558 101,537 88,558 94,537 105,000 105,000
62 3 91,209 103,059 85,209 97,059 110,250 110,250
63 4 86,948 104,564 81,948 99,564 115,763 115,763
64 5 82,768 106,048 82,768 106,048 121,551 121,551
65 6 78,664 107,507 78,664 107,507 127,628 127,628
66 7 74,630 108,937 74,630 108,937 134,010 134,010
67 8 70,660 110,335 70,660 110,335 140,710 140,710
68 9 66,749 111,696 66,749 111,696 147,746 147,746
69 10 62,891 113,016 62,891 113,016 155,133 155,133
74 15 44,169 118,802 44,169 118,802 197,993 197,993
79 20 25,810 122,647 25,810 122,647 252,695 252,695
84 25 7,191 123,523 7,191 123,523 322,510 322,510
89 30 0 129,717 0 129,717 338,635 338,635
94 35 0 138,840 0 138,840 338,635 338,635
95 36 0 140,811 0 140,811 338,635 338,635
Lifetime annual
guaranteed minimum income benefit
Total death benefit ----------------------------------
with Protection Guaranteed Hypothetical
Plus income income
------------------- ----------------- ----------------
Age 0% 6% 0% 6% 0% 6%
- ----- --------- --------- -------- -------- -------- -------
60 100,000 100,000 N/A N/A N/A N/A
61 107,000 107,000 N/A N/A N/A N/A
62 114,350 114,350 N/A N/A N/A N/A
63 122,068 122,068 N/A N/A N/A N/A
64 130,171 130,171 N/A N/A N/A N/A
65 138,679 138,679 N/A N/A N/A N/A
66 147,613 147,613 N/A N/A N/A N/A
67 156,994 156,994 N/A N/A N/A N/A
68 166,844 166,844 N/A N/A N/A N/A
69 177,186 177,186 N/A N/A N/A N/A
74 237,190 237,190 12,493 12,493 12,493 12,493
79 313,773 313,773 17,032 17,032 17,032 17,032
84 388,642 388,642 27,736 27,736 27,736 27,736
89 0 404,767 N/A N/A N/A N/A
94 0 404,767 N/A N/A N/A N/A
95 0 404,767 N/A N/A N/A N/A
The hypothetical investment results are illustrative only and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown and will depend on a number of
factors, including investment allocations made by the owner. The account value,
cash value and guaranteed benefits for a contract would be different from the
ones shown if the actual gross rate of investment return averaged 0% or 6% over
a period of years, but also fluctuated above or below the average for
individual contract years. We can make no representation that these
hypothetical investment results can be achieved for any one year or continued
over any period of time. In fact, for any given period of time, the investment
results could be negative.
D-2 Appendix IV: Hypothetical illustrations
Appendix V: Guaranteed principal benefit example
- --------------------------------------------------------------------------------
For purposes of these examples, we assume that there is an initial contribution
of $100,000, made to the contract on February 14, 2003. We also assume that no
additional contributions, no transfers among options and no withdrawals from
the contract are made. For GPB Option 1, the example also assumes that a 10
year fixed maturity option is chosen. The hypothetical gross rates of return
with respect to amounts allocated to the variable investment options are 0%, 6%
and 10%. The numbers below reflect the deduction of all applicable separate
account and contract charges and also reflect the charge for GPB Option 2.
Also, for any given performance of your variable investment options, GPB Option
1 produces higher account values than GPB Option 2 unless investment
performance has been significantly positive. The examples should not be
considered a representation of past or future expenses. Similarly, the annual
rates of return assumed in the example are not an estimate or guarantee of
future investment performance.
- ----------------------------------------------------------------------------------------------------------------
Assuming 100%
in the variable
Assuming Under GPB Under GPB investment
100% in the FMO Option 1 Option 2 options
- ----------------------------------------------------------------------------------------------------------------
Amount allocated to FMO on February 14, 100,000 66,310 35,000 0
2003 based upon a 4.19% rate to maturity
- ----------------------------------------------------------------------------------------------------------------
Initial account value allocated to the variable 0 33,690 65,000 100,000
investment options on February 14, 2003
- ----------------------------------------------------------------------------------------------------------------
Account value in the fixed maturity option on 150,802 100,000 52,781 0
February 14, 2013
- ----------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 124,844 100,000* 73,742
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a 0%
gross annual rate of return)
- ----------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150.802 145,277 133,413** 134,392
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a 6%
gross annual rate of return)
- ----------------------------------------------------------------------------------------------------------------
Annuity account value (computed by adding 150,802 166,273 171,481** 196,715
together the value at the maturity date of
the applicable fixed maturity option plus the
value of amounts in the variable investment
options on February 14, 2013, assuming a
10% gross annual rate of return)
- ----------------------------------------------------------------------------------------------------------------
* Since the annuity account value is less than the alternate benefit under GPB
Option 2, the annuity account value is adjusted upward to the guaranteed
amount or an increase of $3,545 in this example.
** Since the annuity account value is greater than the alternate benefit under
GPB Option 2, GPB Option 2 will not affect the annuity account value.
Appendix V: Guaranteed principal benefit example E-1
(This page intentionally left blank)
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Tax Information 2
Unit Values 15
Custodian and Independent Accountants 15
Yield Information for the EQ/Money Market Option, EQ/Alliance Quality Bond
Option and AXA Premier VIP High Yield Option 15
Distribution of the Contracts 16
Financial Statements 17
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 September 15, 2003.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
X00566/Elite '04 Series
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
This Part II is amended solely for the purpose of filing the exhibits noted
below. No amendment or deletion is made of any of the other information set
forth under the Part II items as provided in the S-3 Registration Statement
File No. 333-104713.
ITEM 16. EXHIBITS
Exhibits No.
(a)(l) Form of Data Pages for (No. 2003 DPSelect),
incorporated by reference to Exhibit No.
4(i)(i)(i) to Registration Statement File
No. 333-31131, filed on May 8, 2003.
(a)(m) Form of Data Pages (Inherited IRA) (No.
2003 DPTOBCO-Select) incorporated by
reference to Exhibit No. 4(j)(j)(j) to
Registration Statement File No. 333-31131,
filed on May 8, 2003.
(a)(n) Form of Guaranteed Minimum Death Benefit
("GMDB") Rider (No. 2003 GMDB-RUorAR)
incorporated by reference to Exhibit No.
4(a)(i) to Registration Statement File No.
333-05593, filed on May 8, 2003.
(a)(o) Form of Guaranteed Minimum Death Benefit
("GMDB") Rider (No. 2003 GMDB-AR)
incorporated by reference to Exhibit No.
4(a)(j) to Registration Statement File No.
333-05593, filed on May 8, 2003.
(a)(p) Form of Guaranteed Minimum Income Benefit
("GMIB") Rider (No. 2003 GMIB)
incorporated by reference to Exhibit No.
4(a)(k) to Registration Statement File No.
333-05593, filed on May 8, 2003.
(a)(q) Form of Protection Plus Optional Death
Benefit Rider (No. 2003 PPDB) incorporated
by reference to Exhibit No. 4(a)(l) to
Registration Statement File No. 333-05593,
filed on May 8, 2003.
(a)(r) Form of Enhanced Guaranteed Principal
Benefit ("Enhanced GPB") Rider (No. 2003
GPB) incorporated by reference to Exhibit
No. 4(a)(m) to Registration Statement File
No. 333-05593, filed on May 8, 2003.
(a)(s) Form of Spousal Protection Rider (No. 2003
SPPRO) incorporated by reference to Exhibit
No. 4(a)(n) to Registration Statement File
No. 333-05593, filed on May 8, 2003.
(a)(t) Form of Data Pages (No. 2003 DPTOBCO)
incorporated by reference to Exhibit No.
4(a)(o) to Registration Statement File No.
333-05593, filed on May 8, 2003.
(a)(u) Form of Data Pages (No. 2003 DP)
incorporated by reference to Exhibit No.
4(a)(p) to Registration Statement File No.
333-05593, filed on May 8, 2003.
(a)(v) Form of Data Pages (No. 2003 DPCORE)
incorporated by reference to Exhibit No.
4(a)(q) to Registration Statement File No.
333-05593, filed on May 8, 2003.
(a)(w) Form of Data Pages (No. 2003 DPElite)
incorporated by reference to Exhibit No.
4(z)(z) to Registration Statement File No.
333-60730, filed on May 8, 2003.
(a)(x) Form of Data Pages (No. 2003 DPPlus)
incorporated by reference to Exhibit No.
4(c)(c)(c) to Registration Statement File
No. 333-64749, filed on May 8, 2003.
(23) (a) Consent of PricewaterhouseCoopers LLP.
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 this 18th day of July, 2003.
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
As required by the Securities Act of 1933, this amendment to the
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
*Christopher M. Condron Chairman of the Board, President,
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:
Bruce W. Calvert Denis Duverne W. Edwin Jarmain
Francoise Colloc'h Jean-Rene Fourtou Christina Johnson
Christopher M. Condron John C. Graves Scott D. Miller
Henri de Castries Donald J. Greene Joseph H. Moglia
Claus-Michael Dill Mary R. (Nina) Henderson Peter J. Tobin
Joseph L. Dionne James F. Higgins Stanley B. Tulin
*By: /s/ Robin Wagner
------------------------
Robin Wagner
Attorney-in-Fact
July 18, 2003
EXHIBIT INDEX
EXHIBIT NO. TAG VALUE
23(a) Consent of PricewaterhouseCoopers LLP EX-99.23a