AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 27, 2003
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
(Exact Name of Registrant)
NEW JERSEY
(State or other jurisdiction of incorporation or organization)
22-2426091
(I.R.S. Employer Identification Number)
C/O PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(973) 802-7333
(Address and telephone number of principal executive offices)
----------------
THOMAS C. CASTANO
ASSISTANT SECRETARY
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(973) 802-4780
(Name, address and telephone number of agent for
service)
Copies to:
ADAM SCARAMELLA
VICE PRESIDENT, CORPORATE COUNSEL
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
213 WASHINGTON STREET
NEWARK, NJ 07102-2992
(973) 802-4940
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Approximate date of commencement of proposed sale to the public--May 1, 2003
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box ......................[X]
Calculation of Registration fee
- ---------------------------------------------------------------------------------------
Title of each Amount Proposed Proposed Amount
class of to maximum maximum of
securities to be offering aggregate registration
be registered registered* price per unit* offering price fee**
- ------------------- ------------- ----------------- ---------------- --------------
Market-value
adjustment
annuity contracts
(or modified
guaranteed
annuity
contracts) 75,000,000 75,000,000 $6,067.50
- ---------------
* Securities are not issued in predetermined units
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a)
may determine.
The risk factors associated with these securities are discussed in the
prospectuses included with this registration statement. Prudential Investment
Management Services LLC distributed these securities on a best efforts basis.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
STRATEGIC PARTNERS(SM)
ANNUITY ONE
VARIABLE ANNUITY
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PROSPECTUS: MAY 1, 2003
THIS PROSPECTUS DESCRIBES AN INDIVIDUAL VARIABLE ANNUITY CONTRACT OFFERED BY
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY (PRUCO LIFE OF NEW JERSEY). PRUCO
LIFE OF NEW JERSEY IS AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA.
THE FUNDS
- ------------------------------------------------------------
Strategic Partners Annuity One offers a wide variety of investment choices,
including 32 variable investment options that invest in mutual funds managed by
these leading asset managers:
PRUDENTIAL INVESTMENTS LLC
JENNISON ASSOCIATES LLC
A I M CAPITAL MANAGEMENT, INC.
ALLIANCE CAPITAL MANAGEMENT, L.P.
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED
CALAMOS ASSET MANAGEMENT, INC.
DAVIS ADVISORS
DEUTSCHE ASSET MANAGEMENT INVESTMENT
SERVICES LIMITED
EARNEST PARTNERS LLC
FIDELITY MANAGEMENT & RESEARCH COMPANY
FURMAN SELZ CAPITAL MANAGEMENT LLC
GE ASSET MANAGEMENT, INCORPORATED
INVESCO FUNDS GROUP, INC.
JANUS CAPITAL MANAGEMENT LLC
LORD, ABBETT & CO. LLC
MASSACHUSETTS FINANCIAL SERVICES COMPANY (MFS)
NATIONAL CITY INVESTMENT MANAGEMENT COMPANY
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC (PIMCO)
SALOMON BROTHERS ASSET MANAGEMENT INC.
WELLINGTON MANAGEMENT COMPANY LLP
You may choose between two basic versions of Strategic Partners Annuity One. One
version, the Contract With Credit, provides for a bonus credit that we add to
each purchase payment you make. If you choose this version of Strategic Partners
Annuity One, some charges and expenses may be higher than if you choose the
version without the credit. Those higher charges could exceed the amount of the
credit under some circumstances, particularly if you withdraw purchase payments
within a few years of making those purchase payments.
PLEASE READ THIS PROSPECTUS
- ------------------------------------------------------------
Please read this prospectus before purchasing a Strategic Partners Annuity One
variable annuity contract, and keep it for future reference. Current
prospectuses for the underlying mutual funds accompany this prospectus. These
prospectuses contain important information about the mutual funds. Please read
these prospectuses and keep them for reference as well.
TO LEARN MORE ABOUT STRATEGIC PARTNERS ANNUITY ONE
- ------------------------------------------------------------
To learn more about the Strategic Partners Annuity One variable annuity, you can
request a copy of the Statement of Additional Information (SAI) dated May 1,
2003. The SAI has been filed with the Securities and Exchange Commission (SEC)
and is legally a part of this prospectus. Pruco Life of New Jersey also files
other reports with the SEC. All of these filings can be reviewed and copied at
the SEC's offices, and can also be obtained from the SEC's Public Reference
Section, 450 5th Street N.W., Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC at (800)
SEC-0330. The SEC maintains a Web site (http://www.sec.gov) that contains the
Strategic Partners Annuity One SAI, material incorporated by reference, and
other information regarding registrants that file electronically with the SEC.
The Table of Contents of the SAI is on Page 47 of this prospectus.
FOR A FREE COPY OF THE SAI CALL US AT:
- ------------------------------------------------------------
- - (888) PRU-2888 or write to us at:
- - Prudential Annuity Service Center
P.O. Box 7960
Philadelphia, PA 19101
THE SEC HAS NOT DETERMINED THAT THIS CONTRACT IS A GOOD INVESTMENT, NOR HAS THE
SEC DETERMINED THAT THIS PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL
OFFENSE TO STATE OTHERWISE. INVESTMENT IN A VARIABLE ANNUITY CONTRACT IS SUBJECT
TO RISK, INCLUDING THE POSSIBLE LOSS OF YOUR MONEY. AN INVESTMENT IN STRATEGIC
PARTNERS ANNUITY ONE IS NOT A BANK DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
CONTENTS
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<Table>
PART I: STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS
-------------------------------------------------
SUMMARY
-------
Glossary........................................... 6
Summary............................................ 9
Summary of Contract Expenses....................... 13
Expense Examples................................... 15
PART II: STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS
------------------------------------------------------------
SECTIONS 1-9
------------------------------------------------------------
Section 1: What is the Strategic Partners Annuity One
Variable Annuity?..................................... 21
Short Term Cancellation Right or "Free Look"....... 22
Section 2: What Investment Options Can I Choose?........ 23
Variable Investment Options........................ 23
Fixed Interest Rate Options........................ 24
Market Value Adjustment Option..................... 25
Transfers Among Options............................ 27
Other Available Features........................... 27
Voting Rights...................................... 28
Substitution....................................... 28
Section 3: What Kind of Payments Will I Receive During
the Income Phase? (Annuitization)..................... 29
Option 1: Annuity Payments for a Fixed Period...... 29
Option 2: Life Income Annuity Option............... 29
Other Annuity Options.............................. 29
Tax Considerations................................. 29
Section 4: What is the Death Benefit?................... 30
Beneficiary........................................ 30
Calculation of the Death Benefit................... 30
Guaranteed Minimum Death Benefit................... 30
Special Rules If Joint Owners...................... 31
Payout Options..................................... 31
Spousal Continuance Benefit........................ 31
Section 5: How Can I Purchase a Strategic Partners
Annuity One Contract?................................. 33
Purchase Payments.................................. 33
Allocation of Purchase Payments.................... 33
Credits............................................ 33
Calculating Contract Value......................... 34
Section 6: What are the Expenses Associated with the
Strategic Partners Annuity One Contract?.............. 35
Insurance and Administrative Cost.................. 35
Contract Maintenance Charge........................ 35
Withdrawal Charge.................................. 35
Taxes Attributable to Premium...................... 36
Transfer Fee....................................... 37
Company Taxes...................................... 37
</Table>
2
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<Table>
Section 7: How Can I Access My Money?................... 38
Withdrawals During the Accumulation Phase.......... 38
Automated Withdrawals.............................. 38
Suspension of Payments or Transfers................ 38
Section 8: What are the Tax Considerations Associated
with the Strategic Partners Annuity One Contract?..... 40
Contracts Owned by Individuals (Not Associated with
Tax-Favored Retirement Plans).................... 40
Contracts Held by Tax-Favored Plans................ 42
Section 9: Other Information............................ 46
Pruco Life Insurance Company of New Jersey......... 46
The Separate Account............................... 46
Risk Factors....................................... 46
Sale and Distribution of the Contract.............. 47
Assignment......................................... 47
Financial Statements............................... 47
Statement of Additional Information................ 47
Householding....................................... 48
Market Value Adjustment Formula.................... 49
IRA Disclosure Statement........................... 51
Appendix................................................ 55
Accumulation Unit Values........................... 55
</Table>
<Table>
PART III: PROSPECTUSES
----------------------
VARIABLE INVESTMENT OPTIONS
---------------------------
THE PRUDENTIAL SERIES FUND, INC.
JANUS ASPEN SERIES
</Table>
3
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4
PART I SUMMARY
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STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS
5
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
GLOSSARY
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WE HAVE TRIED TO MAKE THIS PROSPECTUS AS EASY TO READ AND UNDERSTAND AS
POSSIBLE. BY THE NATURE OF THE CONTRACT, HOWEVER, CERTAIN TECHNICAL WORDS OR
TERMS ARE UNAVOIDABLE. WE HAVE IDENTIFIED THE FOLLOWING AS SOME OF THESE WORDS
OR TERMS.
ACCUMULATION PHASE
The period that begins with the contract date (which we define below) and ends
when you start receiving income payments, or earlier if the contract is
terminated through a full withdrawal or payment of a death benefit.
ADJUSTED CONTRACT VALUE
When you begin receiving income payments, the value of your contract minus any
charge we impose for any type of tax based on the amount of purchase payments.
ANNUITANT
The person whose life determines the amount of income payments that we will pay.
ANNUITY DATE
The date when income payments are scheduled to begin.
BENEFICIARY
The person(s) or entity you have chosen to receive a death benefit.
CONTRACT DATE
The date on which we credit your initial purchase payment. We will credit the
initial purchase payment to your contract within two business days from the day
on which we receive your payment and all necessary paperwork in good order at
the Prudential Annuity Service Center. Contract anniversaries are measured from
the contract date. A contract year starts on the contract date or on a contract
anniversary.
CONTRACT OWNER, OWNER, OR YOU
The person entitled to the ownership rights under the contract.
CONTRACT VALUE
This is the total value of your contract, equal to the sum of the values of your
investment in each investment option you have chosen. Your contract value will
go up or down based on the performance of the investment options you choose.
CONTRACT WITH CREDIT
A version of the annuity contract that provides for a bonus credit with each
purchase payment that you make and has different withdrawal charges and
insurance and administrative costs than the Contract Without Credit.
CONTRACT WITHOUT CREDIT
A version of the annuity contract that does not provide a credit and has
different withdrawal charges and insurance and administrative costs than the
Contract With Credit.
CREDIT
If you choose the Contract With Credit, this is the bonus amount that we
allocate to your account each time you make a purchase payment. The amount of
the credit is a percentage of the purchase payment. Bonus credits generally are
not recaptured once the free look period expires. Our reference in the preceding
sentence to "generally are not recaptured" refers to the fact that we have the
contractual right to deduct, from the death benefit we pay, the amount of any
credit corresponding to a purchase payment made within one year of death.
DEATH BENEFIT
If the sole owner dies, or if jointly owned, the first to die of the owner or
joint owner, the beneficiary you designate will receive, at a minimum, the total
amount invested, reduced by withdrawals or a potentially greater amount related
to market appreciation. The guaranteed minimum death benefit is available for an
additional charge.
DOLLAR COST AVERAGING FIXED RATE OPTION (DCA FIXED RATE OPTION)
An investment option that offers a fixed rate of interest for a selected period
during which periodic transfers are automatically made to selected variable
investment
6
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PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
options or to the one-year fixed rate option. We guarantee your money will earn
at least 3% while it is allocated to this option. Payments you allocate to the
DCA Fixed Rate Option become part of Pruco Life of New Jersey's general assets
until they are transferred.
FIXED INTEREST RATE OPTIONS
Investment options that offer a fixed rate of interest for either a one-year
period (fixed rate option) or a selected period during which periodic transfers
are made to selected variable investment options or to the one-year fixed rate
option (dollar cost averaging fixed rate option).
GMDB PROTECTED VALUE
The guaranteed amount of the guaranteed minimum death benefit, which may equal
the GMDB step-up value. The protected value will be subject to certain age
restrictions and time durations, however it will still increase by subsequent
invested purchase payments and reduce by withdrawals.
GMDB STEP-UP
We may use the GMDB step-up value to compute the GMDB protected value of the
guaranteed minimum death benefit.
If the sole owner or the older of the owner and joint owner is less than
age 80 on the contract date, the GMDB step-up before the first contract
anniversary is the initial invested purchase payment increased by subsequent
invested purchase payments and reduced by the effect of withdrawals. The GMDB
step-up on each contract anniversary will be the greater of the previous GMDB
step-up and the contract value as of such contract anniversary. Between contract
anniversaries, the GMDB step-up will be increased by invested purchase payments
and reduced by the effect of withdrawals.
If the sole owner or the older of the owner and joint owner is between age
80 and 85 on the contract date, the GMDB step-up before the third contract
anniversary is the sum of invested purchase payments, reduced by the effect of
withdrawals. On the third contract anniversary the GMDB step-up will be adjusted
to the greater of the then current GMDB step-up or the contract value as of that
contract anniversary.
GOOD ORDER
An instruction received at the Prudential Annuity Service Center, utilizing such
forms, signatures and dating as we require, which is sufficiently clear that we
do not need to exercise any discretion to follow such instructions.
GUARANTEED MINIMUM DEATH BENEFIT (GMDB)
An optional feature available for an additional charge, which guarantees that
the death benefit that the beneficiary receives will be no less than a certain
GMDB protected value.
GUARANTEE PERIOD
A period of time during which your invested purchase payment in the market value
adjustment option earns interest at the declared rate. We have the right to
offer one or more of several guarantee periods equal to any or all of the
following: 1 year (currently available only as a renewal option), 2 years, 3
years, 4 years, 5 years, 6 years, 7 years, 8 years, 9 years, and 10 years.
INCOME OPTIONS
Options under the contract that define the frequency and duration of income
payments. In your contract, we also refer to these as payout or annuity options.
INCOME PHASE
The period in which you receive income payments under the contract.
INVESTED PURCHASE PAYMENTS
Your purchase payments less any deduction we make for any tax charge.
JOINT OWNER
The person named as the joint owner, who shares ownership rights with the owner
as defined in the contract.
MARKET VALUE ADJUSTMENT OPTION
Under both the Contract With Credit and the Contract Without Credit, an
investment option that offers guarantee periods from one to ten years in length,
and pays a fixed rate of interest with respect to each guarantee period. We
7
GLOSSARY CONTINUED
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PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
impose a market value adjustment on withdrawals or transfers that you make from
this option prior to the end of a guarantee period.
NET PURCHASE PAYMENTS
Your total purchase payments less any withdrawals you have made.
PRUDENTIAL ANNUITY SERVICE CENTER
For general correspondence: P.O. Box 7960, Philadelphia, PA 19101. For express
overnight mail: 2101 Welsh Road, Dresher, PA 19025. The telephone number is
888-PRU-2888. Prudential's Web site is www.prudential.com.
PURCHASE PAYMENTS
The amount of money you pay us to purchase the contract. With some restrictions,
you can make additional purchase payments at any time during the accumulation
phase.
SEPARATE ACCOUNT
We hold your purchase payments allocated to the variable investment options in a
separate account called the Pruco Life of New Jersey Flexible Premium Variable
Annuity Account. The separate account is set apart from all of the general
assets of Pruco Life of New Jersey.
STATEMENT OF ADDITIONAL INFORMATION
A document containing certain additional information about the Strategic
Partners Annuity One variable annuity. We have filed the Statement of Additional
Information with the Securities and Exchange Commission and it is legally a part
of this prospectus. To learn how to obtain a copy of the Statement of Additional
Information, see the front cover of this prospectus.
TAX DEFERRAL
This is a way to increase your assets without currently being taxed. Generally,
you do not pay taxes on your contract earnings until you take money out of your
contract. You should be aware that tax favored plans (such as IRAs) already
provide tax deferral regardless of whether they invest in annuity contracts. See
"What Are the Tax Considerations Associated with the Strategic Partners Annuity
One Contract," on page 40.
VARIABLE INVESTMENT OPTION
When you choose a variable investment option, we purchase shares of the mutual
fund which are held as an investment for that option. We hold these shares in
the separate account. The division of the separate account of Pruco Life of New
Jersey that invests in a particular mutual fund is referred to in your contract
as a subaccount.
8
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
SUMMARY FOR SECTIONS 1-9
- --------------------------------------------------------------------------------
FOR A MORE COMPLETE DISCUSSION OF THE FOLLOWING TOPICS, SEE THE CORRESPONDING
SECTION IN PART II OF THE PROSPECTUS.
SECTION 1
WHAT IS THE STRATEGIC PARTNERS ANNUITY ONE VARIABLE ANNUITY?
The Strategic Partners Annuity One variable annuity is a contract between you,
the owner, and us, the insurance company, Pruco Life Insurance Company of New
Jersey (Pruco Life of New Jersey, we or us). The contract allows you to invest
on a tax-deferred basis in one or more of 32 variable investment options, two
fixed interest rate options and the market value adjustment option. The contract
is intended for retirement savings or other long-term investment purposes and
provides for a death benefit.
There are two basic versions of the Strategic Partners Annuity One variable
annuity.
Contract With Credit.
- - provides for a bonus credit that we add to each purchase payment that you
make,
- - has higher withdrawal charges and insurance and administrative costs than the
Contract Without Credit,
- - may provide lower interest rates for fixed rate options than the Contract
Without Credit,
- - does not provide the market value adjustment option,
Contract Without Credit.
- - does not provide a credit,
- - has lower withdrawal charges and insurance and administrative costs than the
Contract With Credit.
- - may provide higher interest rates for fixed rate options than the Contract
With Credit.
- - provides the market value adjustment option.
The variable investment options available under the contract offer the
opportunity for a favorable return. However, this is NOT guaranteed. It is
possible, due to market changes, that your investments may decrease in value.
The fixed interest rate options offer a guaranteed interest rate. While your
money is allocated to one of these options, your principal amount will not
decrease and we guarantee that your money will earn at least a minimum interest
rate annually. Under the market value adjustment option, while your money
remains in the contract for the full guarantee period, your principal amount is
guaranteed and the interest amount that your money will earn is guaranteed by us
to always be at least 3%.
Payments allocated to the fixed interest rate options become part of Pruco
Life of New Jersey's general assets. Payments allocated to the market value
adjustment option are held as a separate pool of assets, but the income, gains
or losses experienced by these assets are not directly credited or charged
against the contracts. As a result, the strength of our guarantees under these
options is based on the overall financial strength of Pruco Life of New Jersey.
You can invest your money in any or all of the variable investment options,
the fixed interest rate options, and one or more guaranteed periods available
under the market value adjustment option. You may make up to 12 free transfers
each contract year among the variable investment options. Certain restrictions
apply to transfers involving the fixed interest rate options.
The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase.
- - During the accumulation phase, any earnings grow on a tax-deferred basis and
are generally only taxed as income when you make a withdrawal.
- - The income phase starts when you begin receiving regular payments from your
contract.
The amount of money you are able to accumulate in your contract during the
accumulation phase will help determine the amount you will receive during the
income phase. Other factors will affect the amount of your payments, such as
age, gender, and the payout option you select.
9
SUMMARY FOR SECTIONS 1-9 CONTINUED
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PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
The contract offers a choice of annuity payout and death benefit options,
which may also be available to you.
If you change your mind about owning Strategic Partners Annuity One, you may
cancel your contract within 10 days after receiving it (or whatever period is
required by applicable law). We call this the "Free Look" period.
SECTION 2
WHAT INVESTMENT OPTIONS CAN I CHOOSE?
You can invest your money in any or all of the following variable investment
options:
The Prudential Series Fund, Inc.
Jennison Portfolio (domestic equity)
Prudential Equity Portfolio
Prudential Global Portfolio
Prudential Money Market Portfolio
Prudential Stock Index Portfolio
Prudential Value Portfolio (domestic equity)
SP Aggressive Growth Asset Allocation Portfolio
SP AIM Aggressive Growth Portfolio
SP AIM Core Equity Portfolio
SP Alliance Large Cap Growth Portfolio
SP Alliance Technology Portfolio
SP Balanced Asset Allocation Portfolio
SP Conservative Asset Allocation Portfolio
SP Davis Value Portfolio
SP Deutsche International Equity Portfolio
SP Fundamental Value Portfolio
SP Growth Asset Allocation Portfolio
SP International Value Portfolio
SP INVESCO Small Company Growth Portfolio
SP Jennison International Growth Portfolio
SP Large Cap Growth Portfolio
SP Large Cap Value Portfolio
SP MFS Capital Opportunities Portfolio (domestic and foreign equity)
SP Mid Cap Growth Portfolio
SP Mid Cap Value Portfolio
SP PIMCO High Yield Portfolio
SP PIMCO Total Return Portfolio
SP Prudential U.S. Emerging Growth Portfolio
SP Small Cap Value Portfolio
SP Small/Mid Cap Value Portfolio
SP Strategic Partners Focused Growth Portfolio
Janus Aspen Series
Growth Portfolio -- Service Shares
Depending upon market conditions, you may earn or lose money in any of these
options. The value of your contract will fluctuate depending upon the
performance of the mutual fund portfolios used by the variable investment
options that you choose. Performance information for the variable investment
options appears in the Statement of Additional Information (SAI). Past
performance is not a guarantee of future results.
Two guaranteed fixed interest rate options are also available:
- - The one-year fixed interest rate option offers a base interest rate that is
guaranteed by us for one year, and will always be at least 3% per year. We
may also offer a higher interest rate on each purchase payment allocated to
this option for the first year after the payment.
- - The dollar cost averaging fixed rate option offers an interest rate that is
guaranteed by us for a selected period during which we make periodic
transfers from this option to the variable investment options you select or
to the one-year fixed interest rate option. We guarantee that the interest
rate for the dollar cost averaging fixed rate option will always be at least
3% per year.
You may also invest your money in a market value adjustment option if you
purchase a Contract Without Credit.
You can allocate purchase payments or transfer contract value to one or more
guarantee periods available under the market value adjustment option. Available
guarantee periods will include one or more of the following periods: 1 year
(currently available only as a renewal option), 2 years, 3 years, 4 years, 5
years, 6 years, 7 years, 8 years, 9 years and 10 years in length. Allocations or
transfers must be at least $1,000.
10
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PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
SECTION 3
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)
If you want to receive regular income from your annuity, you can choose one of
several options, including guaranteed payments for the annuitant's lifetime.
Generally, once you begin receiving regular payments, you cannot change your
payment plan.
SECTION 4
WHAT IS THE DEATH BENEFIT?
In general, if the sole owner or first to die of the owner or joint owner dies
before the income phase of the contract begins, the person(s) or entity that you
have chosen as your beneficiary will receive, at a minimum, the greater of (i)
the contract value, (ii) either the base death benefit or, for a higher
insurance and administrative cost, a potentially larger guaranteed minimum death
benefit. The base death benefit equals the total invested purchase payments
proportionally reduced by withdrawals. The guaranteed minimum death benefit is
equal to the "GMDB protected value". If on the date we receive due proof of
death, (1) there is only one owner of the contract and there is only one
beneficiary who is the owner's spouse; or (2) there are an owner and joint owner
of the contract, and the owner's spouse is both the joint owner and the
beneficiary under the contract and certain other conditions are met, then in
lieu of paying a death benefit, we will allow the surviving spouse to continue
the contract by exercising the Spousal Continuance Benefit, which we describe on
page 31.
SECTION 5
HOW CAN I PURCHASE A STRATEGIC PARTNERS ANNUITY ONE CONTRACT?
Under most circumstances, you can purchase this contract with a minimum initial
purchase payment of $10,000. Generally, you can make additional purchase
payments of $500 or more at any time during the accumulation phase of the
contract. Your representative can help you fill out the proper forms. The
Contract With Credit provides for the allocation of a credit with each purchase
payment.
You may purchase this contract only if you are age 85 or younger. Certain age
limits apply to certain features and benefits described herein.
SECTION 6
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS ANNUITY ONE
CONTRACT?
The contract has insurance features and investment features, both of which have
related costs and charges.
- - Each year (or upon full surrender) we deduct a contract maintenance charge of
$30 if your contract value is less than $75,000 (or 2% of your contract
value, if that amount is less than $30). We do not impose the contract
maintenance charge if your contract value is $75,000 or more.
- - For insurance and administrative costs, we also deduct a daily charge based
on the average daily value of all assets allocated to the variable investment
options, depending on the death benefit option that you choose. The daily
cost is equivalent to an annual charge, as follows:
-- 1.40% if you do not choose the guaranteed minimum death benefit,
-- 1.65% if you choose the step-up guaranteed minimum death benefit option.
We impose an additional insurance and administrative cost of 0.10% annually
for the Contract With Credit.
- - The mutual funds in which the variable investment options invest also incur
fees and expenses. For the year 2001, these daily charges ranged on an annual
basis from 0.39% to 1.30% of a fund's average daily net assets.
- - If you withdraw money less than seven contract anniversaries after making a
purchase payment, then you may have to pay a withdrawal charge on all or part
of the withdrawal. This charge ranges from 1-7% for the Contract Without
Credit and 5-8% for the Contract With Credit.
For more information, including details about other possible charges under
the contract, see "Summary of Contract Expenses" on page 13 and "What Are The
11
SUMMARY FOR SECTIONS 1-9 CONTINUED
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PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
Expenses Associated With The Strategic Partners Annuity One Contract?" on page
35.
SECTION 7
HOW CAN I ACCESS MY MONEY?
You may withdraw money at any time during the accumulation phase. If you do so,
however, you may be subject to income tax and, if you make a withdrawal prior to
age 59 1/2, an additional tax penalty as well. For the Contract Without Credit,
if you withdraw money less than seven contract anniversaries after making a
purchase payment, we may impose a withdrawal charge ranging from 1 to 7%. For
the version of the Contract With Credit, we may impose a withdrawal charge
ranging from 5-8%.
Under the market value adjustment option, you will be subject to a market
value adjustment if you make a withdrawal or transfer from the option prior to
the end of a guarantee period.
SECTION 8
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS ANNUITY
ONE CONTRACT?
Your earnings are generally not taxed until you withdraw them. If you take money
out during the accumulation phase, the tax laws treat the withdrawal as first a
withdrawal of earnings, which are taxed as ordinary income. If you are younger
than age 59 1/2 when you take money out, you may be charged a 10% federal tax
penalty on the earnings in addition to ordinary taxation. A portion of the
payments you receive during the income phase is considered a return of your
original investment and therefore will not be taxable as income. Generally, all
amounts withdrawn from an Individual Retirement Annuity (IRA) contract
(excluding Roth IRAs) prior to age 59 1/2 are taxable and subject to the 10%
penalty.
SECTION 9
OTHER INFORMATION
This contract is issued by Pruco Life of New Jersey, an indirect subsidiary of
the Prudential Insurance Company of America, and sold by registered
representatives of affiliated and unaffiliated broker/dealers.
12
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
SUMMARY OF CONTRACT EXPENSES
- --------------------------------------------------------------------------------
THE PURPOSE OF THIS SUMMARY IS TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES
YOU WILL PAY FOR STRATEGIC PARTNERS ANNUITY ONE. THE FOLLOWING TABLES DESCRIBE
THE MAXIMUM FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING, AND
SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT
YOU WILL PAY AT THE TIME THAT YOU BUY THE CONTRACT, SURRENDER THE CONTRACT, OR
TRANSFER CASH VALUE BETWEEN INVESTMENT OPTIONS. STATE PREMIUM TAXES MAY ALSO BE
DEDUCTED.
For more detailed information, including additional information about current
and maximum charges, see "What Are The Expenses Associated With The Strategic
Partners Annuity One Contract?" on page 35. For more detailed expense
information about the mutual funds, please refer to the individual fund
prospectuses, which you will find attached at the back of this prospectus.
Historical unit values appear in the appendix to this prospectus.
CONTRACTOWNER TRANSACTION EXPENSES
<Table>
<Caption>
WITHDRAWAL CHARGE(1)
- ------------------------------------------------------------
NUMBER OF
CONTRACT CONTRACT CONTRACT
ANNIVERSARIES SINCE WITH WITHOUT
PURCHASE PAYMENT CREDIT CREDIT
------------------- --------- --------------
0 8% 7%
1 8% 6%
2 8% 5%
3 8% 4%
4 7% 3%
5 6% 2%
6 5% 1%
7 0% 0%
--- -------
MAXIMUM TRANSFER FEE
- --------------------
FIRST 12 TRANSFERS PER YEAR $ 0.00
Each transfer after 12(2) $ 25.00
</Table>
NOTE 1: Each contract year, you may withdraw a specified amount of your contract
value without incurring a withdrawal charge. We will waive the withdrawal fee if
we pay a death benefit or under certain other circumstances. See "Withdrawal
Charge" on page 35.
NOTE 2: We will not charge you for transfers made in connection with Dollar Cost
Averaging and Auto-Rebalancing and do not count them toward the limit of 12 free
transfers per year.
13
SUMMARY OF CONTRACT EXPENSES CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
The next table describes the fees and expenses that you will pay periodically
during the time that you own the contract, not including underlying mutual fund
fees and expenses.
<Table>
<Caption>
MAXIMUM CONTRACT MAINTENANCE CHARGE AND CONTRACT CHARGE UPON FULL
WITHDRAWAL(3)
- ------------------------------------------------------------------
$ 30
INSURANCE AND ADMINISTRATIVE EXPENSES
- -------------------------------------
AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE ALLOCATED
TO VARIABLE INVESTMENT OPTIONS
Base Death Benefit: 1.40%
Guaranteed Minimum Death Benefit Option--Step-Up: 1.65%
Additional Charge for Contract With Credit(4) 0.10%
</Table>
NOTE 3: We currently assess a fee of $30 against contracts valued less than
$75,000 (or 2% of contract value, if less).
NOTE 4: We impose this additional charge of 0.10% on the Contract With Credit,
irrespective of which death benefit option you choose.
The next item shows the minimum and maximum total operating expenses charged by
the underlying mutual funds that you may pay periodically during the time that
you own the contract. More detail concerning each underlying mutual fund's fees
and expenses is contained in the prospectus for each underlying mutual fund. The
maximum and maximum total operating expenses depicted below are based on
historical fund expenses for the year ended December 31, 2002. Fund expenses are
not fixed or guaranteed by the Strategic Partners Annuity One contract, and may
vary from year to year.
TOTAL ANNUAL MUTUAL FUND OPERATING EXPENSES (expenses that are deducted from
underlying mutual fund assets, including management fees, distribution and/or
service (12b-1) fees, and other expenses)
<Table>
<Caption>
MINIMUM MAXIMUM
------- -------
Total Annual Underlying Mutual Fund Operating
Expenses % %
</Table>
14
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
EXPENSE EXAMPLES
- --------------------------------------------------------------------------------
THESE EXAMPLES ARE 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 MUTUAL FUND FEES AND EXPENSES.
THE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS
INDICATED. THE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH
YEAR AND ASSUMES THE MAXIMUM FEES AND EXPENSES OF ANY OF THE MUTUAL FUNDS.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, BASED ON THESE ASSUMPTIONS,
YOUR COSTS WOULD BE AS INDICATED IN THE TABLES THAT FOLLOW.
EXAMPLE 1A: Contract Without Credit: Base Death Benefit; and You Withdraw All
Your Assets
This example assumes that:
- - You invest $10,000 in the Contract Without Credit;
- - You choose the Base Death Benefit;
- - You allocate all of your assets to only one of the variable investment
options having the maximum total operating expenses;
- - The investment has a 5% return each year;
- - The mutual fund's total operating expenses remain the same each year; and
- - You withdraw all your assets at the end of the indicated period.
EXAMPLE 1B: Contract Without Credit: Base Death Benefit; and You Do Not Withdraw
Your Assets
This example makes exactly the same assumptions as Example 1a except that it
assumes that you do not withdraw any of your assets at the end of the indicated
period.
15
EXPENSE EXAMPLES CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
EXAMPLE 2A: Contract Without Credit: Step-Up Guaranteed Minimum Death Benefit;
and You Withdraw All Your Assets
This example assumes that:
- - You invest $10,000 in the Contract Without Credit;
- - You choose the Step-Up Guaranteed Minimum Death Benefit;
- - You allocate all of your assets to the variable investment option having the
maximum total operating expenses;
- - The investment has a 5% return each year;
- - The mutual fund's total operating expenses remain the same each year; and
- - You withdraw all your assets at the end of the indicated period.
EXAMPLE 2B: Contract Without Credit: Step-Up Guaranteed Minimum Death Benefit;
and You Do Not Withdraw Your Assets
This example makes exactly the same assumptions as Example 2a except that it
assumes that you do not withdraw any of your assets at the end of the indicated
period.
EXAMPLE 3A: Contract With Credit: Base Death Benefit; and You Withdraw All Your
Assets
This example makes exactly the same assumptions as Example 1a except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
EXAMPLE 3B: Contract With Credit: Base Death Benefit; and You Do Not Withdraw
Your Assets
This example makes exactly the same assumptions as Example 1b except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
EXAMPLE 4A: Contract With Credit: Step-Up Guaranteed Minimum Death Benefit; and
You Withdraw All Your Assets
This example makes exactly the same assumptions as Example 2a except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
NOTES FOR EXPENSE EXAMPLES:
THESE EXAMPLES DO NOT SHOW PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE HIGHER OR LOWER. THESE
EXAMPLES DO NOT DEPICT EVERY
POSSIBLE COMBINATION OF CHARGES
UNDER THE CONTRACTS.
The values shown in the 10 year
column are the same for Example 1a
and Example 1b, the same for
Example 2a and 2b, the same for
Example 3a and 3b, and the same for
Example 4a and 4b. This is because
if 10 years have elapsed since your
last purchase payment, we would no
longer deduct withdrawal charges
when you make a withdrawal.
Examples 3a, 3b, 4a and 4b reflect
the maximum withdrawal charges.
The examples use an average
contract maintenance charge, which
we calculated based on our estimate
of the total contract fees we
expect to collect. Based on these
estimates, the contract maintenance
charge is included as an annual
charge of 0.05% of contract value.
Your actual fees will vary based on
the amount of your contract and
your specific allocation among the
investment options.
16
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
EXAMPLE 4B: Contract With Credit: Step-Up Guaranteed Minimum Death Benefit; and
You Do Not Withdraw Your Assets
This example makes exactly the same assumptions as Example 2b except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
In these expense examples, we set out projected expenses that are based on
versions of the contract that carry the highest and lowest overall charges. We
do not depict projected expenses for every possible combination of contract
charges. The actual expenses under the contract with the insurance features and
underlying funds that you have selected, and the purchase payments that you have
made, may vary from the figures we depict here.
17
EXPENSE EXAMPLES CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SUMMARY
<Table>
<Caption>
CONTRACT WITHOUT CREDIT: BASE DEATH BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
EXAMPLE 1a: EXAMPLE 1b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
--------------------------------------------------------------------
</Table>
<Table>
<Caption>
CONTRACT WITHOUT CREDIT: STEP-UP GUARANTEED MINIMUM DEATH BENEFIT OPTION
- ---------------------------------------------------------------------------------------------------------------------------
EXAMPLE 2a: EXAMPLE 2b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
--------------------------------------------------------------------
</Table>
<Table>
<Caption>
CONTRACT WITH CREDIT: BASE DEATH BENEFIT
- ------------------------------------------------------------------------------------------------------------------------------
EXAMPLE 3a: EXAMPLE 3b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
----------------------------------------------------------------------
</Table>
<Table>
<Caption>
CONTRACT WITH CREDIT: STEP-UP GUARANTEED MINIMUM DEATH BENEFIT OPTION
- ---------------------------------------------------------------------------------------------------------------------------
EXAMPLE 4a: EXAMPLE 4b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
-----------------------------------------------------------------------
</Table>
18
PART II SECTIONS 1-9
- --------------------------------------------------------------------------------
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS
19
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20
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
1:
WHAT IS THE STRATEGIC PARTNERS ANNUITY ONE
VARIABLE ANNUITY?
- --------------------------------------------------------------------------------
THE STRATEGIC PARTNERS ANNUITY ONE VARIABLE ANNUITY IS A CONTRACT BETWEEN YOU,
THE OWNER, AND US, PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY (PRUCO LIFE OF NEW
JERSEY, WE OR US).
Under our contract, in exchange for your payment to us, we promise to pay you a
guaranteed income stream that can begin any time on or after the first contract
anniversary. Your annuity is in the accumulation phase until you decide to begin
receiving annuity payments. The date you begin receiving annuity payments is the
annuity date. On the annuity date, your contract switches to the income phase.
This annuity contract benefits from tax deferral. Tax deferral means that you
are not taxed on earnings or appreciation on the assets in your contract until
you withdraw money from your contract. (If you hold the annuity contract in a
tax-favored plan such as an IRA, that plan generally provides tax deferral even
without investing in an annuity contract.)
There are two basic versions of Strategic Partners Annuity One variable
annuity.
Contract With Credit.
- - provides for a bonus credit that we add to each purchase payment that you
make,
- - has higher withdrawal charges and insurance and administrative costs than the
Contract Without Credit,
- - may provide a lower interest rate for fixed rate option than Contract With
Credit,
- - does not provide the market value adjustment option.
Contract Without Credit.
- - does not provide a credit,
- - has lower withdrawal charges and insurance and administrative costs than the
Contract With Credit,
- - may provide higher interest rates for fixed rate options than the Contract
With Credit,
- - provides the market value adjustment option.
Unless we state otherwise, when we use the word contract, it applies to both
versions.
Because of the higher withdrawal charges, if you choose the Contract With
Credit and you withdraw a purchase payment, depending upon the performance of
the investment options you choose, you may be worse off than if you had chosen
the Contract Without Credit. We do not recommend purchase of either version of
Strategic Partners Annuity One if you anticipate having to withdraw a
significant amount of your purchase payments within a few years of making those
purchase payments.
Strategic Partners Annuity One is a variable annuity contract. This means
that during the accumulation phase, you can allocate your assets among 32
variable investment options, two guaranteed fixed interest rate options and a
market value adjustment option. If you select variable investment options, the
amount of money you are able to accumulate in your contract during the
accumulation phase depends upon the investment performance of the mutual funds
associated with those variable investment options. Because the mutual funds'
portfolios fluctuate in value depending upon market conditions, your contract
value can either increase or decrease. This is important, since the amount of
the annuity payments you receive during the income phase depends upon the value
of your contract at the time you begin receiving payments.
As mentioned above, two guaranteed fixed interest rate options are available:
- - The one-year fixed interest rate option offers a base interest rate that is
guaranteed by us for one year and will always be at least a minimum interest
rate of 3%. We may also offer a higher interest rate on each purchase payment
allocated to this option for the first year after the payment.
21
1:
WHAT IS THE STRATEGIC PARTNERS ANNUITY ONE VARIABLE ANNUITY? CONTINUED
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
- - The dollar cost averaging fixed rate option offers an interest rate that is
guaranteed by us for a selected period during which periodic transfers are
made to selected variable investment options and/or to the one-year fixed
interest rate option. We guarantee your money will earn at least 3% while it
is allocated to this option.
Additionally, you may allocate purchase payments or transfer contract value
to the market value adjustment option. Under this option, we will offer one or
more of the following guarantee periods: 1 year (currently available only as a
renewal option), 2 years, 3 years, 4 years, 5 years, 6 years, 7 years, 8 years,
9 years, and 10 years in length. However, we will not allow purchase payments or
transfers into a guarantee period unless that guarantee period offers 3% annual
interest or greater.
As the owner of the contract, you have all of the decision-making rights
under the contract. You will also be the annuitant unless you designate someone
else. The annuitant is the person whose life is used to determine how much and
how long the annuity payments will continue once the annuity phase begins. On or
after the annuity date, the annuitant may not be changed.
The beneficiary is the person(s) or entity you designate to receive any death
benefit. You may change the beneficiary any time prior to the annuity date by
making a written request to us.
SHORT TERM CANCELLATION RIGHT OR "FREE LOOK"
If you change your mind about owning Strategic Partners Annuity One, you may
cancel your contract within 10 days after receiving it (or whatever period is
required by applicable law). You can request a refund by returning the contract
either to the representative who sold it to you, or to the Prudential Annuity
Service
Center at the address shown on the first page of this prospectus. You will
receive:
- - the amount equal to the portion of the purchase payments including any fees
or other charges, allocated to any of the fixed interest rate options, and
- - the sum of (i) the difference between purchase payments received, including
any fees or other charges, and the amounts allocated to the variable
investment options, and (ii) the contract value as of the date the contract
is mailed or delivered to us or to the representative who sold it to you.
This amount will be reduced by any applicable federal and state income tax
withholding and may be more or less than your original payment. If you have
purchased the Contract With Credit, we will deduct any credit we had added to
your contract value. We will not, unless and until we obtain SEC exemptive
relief, recoup for our own assets the full amount of the 6% bonus credit
applicable to purchase payments of $1 million or greater that we had given to
you. Rather, we will recoup an amount equal to the value of the credit as of the
business day on which we receive your request, less any charges attributable to
that credit. We reserve the right to recapture the entire amount of the credit
upon obtaining appropriate approval of the SEC with regard to that bonus credit.
22
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
2:
WHAT INVESTMENT OPTIONS
CAN I CHOOSE?
- --------------------------------------------------------------------------------
THE CONTRACT GIVES YOU THE CHOICE OF ALLOCATING YOUR PURCHASE PAYMENTS TO ANY
ONE OR MORE OF 32 VARIABLE INVESTMENT OPTIONS, 2 FIXED INTEREST RATE OPTIONS,
AND A MARKET VALUE ADJUSTMENT OPTION.
The 32 variable investment options invest in mutual funds managed by leading
investment advisers. Separate prospectuses for these funds are attached to this
prospectus. You should read a mutual fund's prospectus before you decide to
allocate your assets to the variable investment option using that fund.
VARIABLE INVESTMENT OPTIONS
Listed below are the mutual funds in which the variable investment options
invest. Each variable investment option has a separate investment objective.
The Prudential Series Fund, Inc.
- - Jennison Portfolio (domestic equity)
- - Prudential Equity Portfolio
- - Prudential Global Portfolio
- - Prudential Money Market Portfolio
- - Prudential Stock Index Portfolio
- - Prudential Value Portfolio (domestic equity)
- - SP Aggressive Growth Asset Allocation Portfolio
- - SP AIM Aggressive Growth Portfolio
- - SP AIM Core Equity Portfolio
- - SP Alliance Large Cap Growth Portfolio
- - SP Alliance Technology Portfolio
- - SP Balanced Asset Allocation Portfolio
- - SP Conservative Asset Allocation Portfolio
- - SP Davis Value Portfolio
- - SP Deutsche International Equity Portfolio
- - SP Fundamental Value Portfolio
- - SP Growth Asset Allocation Portfolio
- - SP International Value Portfolio
- - SP INVESCO Small Company Growth Portfolio
- - SP Jennison International Growth Portfolio
- - SP Large Cap Growth Portfolio
- - SP Large Cap Value Portfolio
- - SP MFS Capital Opportunities Portfolio
(domestic and foreign equity)
- - SP MFS Mid Cap Growth Portfolio (formerly SP MFS Mid-Cap Growth Portfolio)
- - SP Mid Cap Value Portfolio
- - SP PIMCO High Yield Portfolio
- - SP PIMCO Total Return Portfolio
- - SP Prudential U.S. Emerging Growth Portfolio
- - SP Small Cap Value Portfolio
- - SP Small/Mid Cap Value Portfolio
- - SP Strategic Partners Focused Growth Portfolio
The Jennison Portfolio, Prudential Equity Portfolio, Prudential Global
Portfolio, Prudential Money Market Portfolio, Prudential Stock Index Portfolio
and Prudential Value Portfolio, and each "SP" Portfolio of the Prudential Series
Fund, are managed by an indirect wholly-owned subsidiary of Prudential
Financial, Inc. called Prudential Investments LLC (PI). In addition, the
portfolios listed below also have subadvisers, which are listed below and which
have day-to-day responsibility for managing the portfolio, subject to the
oversight of PI using a manager-of-managers approach.
Prudential Money Market Portfolio and Prudential Stock Index Portfolio:
Prudential Investment Management, Inc.
Jennison Portfolio, Prudential Global Portfolio, SP Jennison
International Growth Portfolio, SP Prudential U.S. Emerging Growth
Portfolio and Prudential Value Portfolio: Jennison Associates LLC
Prudential Equity Portfolio: GE Asset Management, Incorporated, Jennison
Associates LLC, and Salomon Brothers Asset Management Inc.
SP Strategic Partners Focused Growth Portfolio: Jennison Associates LLC
and Alliance Capital Management, L.P.
SP AIM Aggressive Growth Portfolio and SP AIM Core Equity Portfolio: A I
M Capital Management, Inc.
SP Alliance Large Cap Growth Portfolio and SP Alliance Technology
Portfolio: Alliance Capital Management, L.P.
SP Davis Value Portfolio: Davis Advisors
SP Deutsche International Equity Portfolio: Deutsche Asset Management
Investment Services Limited, a wholly-owned subsidiary of Deutsche Bank
AG
SP Fundamental Value Portfolio: Wellington Management Company, LLP
SP INVESCO Small Company Growth Portfolio: INVESCO Funds Group, Inc.
23
2:
WHAT INVESTMENT OPTIONS CAN I CHOOSE? CONTINUED
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
SP International Value Portfolio: Bank of Ireland Asset Management
(U.S.) Limited
SP Large Cap Growth Portfolio: Furman Selz Capital Management LLC
SP Large Cap Value Portfolio and SP Small/Mid Cap Value Portfolio:
Fidelity Management and Research Company
SP MFS Capital Opportunities Portfolio: Massachusetts Financial Services
Company
SP Mid Cap Growth Portfolio (formerly SP MFS Mid-Cap Growth Portfolio):
Calamos Asset Management, Inc.
SP Mid Cap Value Portfolio: Lord, Abbett & Co. LLC
SP PIMCO High Yield Portfolio and SP PIMCO Total Return Portfolio:
Pacific Investment Management Company
SP Small Cap Value Portfolio: EARNEST Partners LLC and National City
Investment Management Company
Janus Aspen Series
- - Growth Portfolio--Service Shares
Janus Capital Management LLC serves as investment adviser to the Growth
Portfolio--Service Shares of Janus Aspen Series.
A fund or portfolio may have a similar name or an investment objective and
investment policies closely resembling those of a mutual fund managed by the
same investment adviser that is sold directly to individual investors. Despite
such similarities, there can be no assurance that the investment performance of
any such fund or portfolio will resemble that of its retail fund counterpart.
An affiliate of each of the funds may compensate Pruco Life of New Jersey
based upon an annual percentage of the average assets held in the fund by Pruco
Life of New Jersey under the contracts. These percentages may vary by fund
and/or portfolio, and reflect administrative and other services we provide.
FIXED INTEREST RATE OPTIONS
We offer two fixed interest rate options:
- - a one-year fixed interest rate option, and
- - a dollar cost averaging fixed rate option ("DCA Fixed Rate Option").
When you select one of these options, your payment will earn interest at the
established rate for the applicable interest rate period. A new interest rate
period is established every time you allocate or transfer money into a fixed
interest rate option. (You may not transfer amounts from other investment
options into the DCA Fixed Rate Option.) You may have money allocated in more
than one interest rate period at the same time. This could result in your money
earning interest at different rates and each interest rate period maturing at a
different time. While these interest rates may change from time to time, they
will never be less than 3%. We may offer lower interest rates for Contracts With
Credit than for Contracts Without Credit.
ONE-YEAR FIXED INTEREST RATE OPTION
We set a one-year base guaranteed annual interest rate for the one-year fixed
interest rate option. Additionally, we may provide a higher interest rate on
each purchase payment allocated to this option for the first year after the
payment. This higher interest rate will not apply to amounts transferred from
other investment options within the contract or amounts remaining in this option
for more than one year.
DOLLAR COST AVERAGING FIXED RATE OPTION
You may allocate all or part of any purchase payment to the DCA Fixed Rate
Option. For this option, the interest rate is guaranteed for the applicable
period of time for which transfers are made. Under this option, you
automatically transfer amounts over a stated period (currently, six or twelve
months) from the DCA Fixed Rate Option to the variable investment options and/or
to the one-year fixed interest rate option, as you select. We will invest the
assets you allocate to the DCA Fixed Rate Option in our general account until
they are transferred. You may not transfer from other investment options to the
DCA Fixed Rate Option.
If you choose to allocate all or part of a purchase payment to the DCA Fixed
Rate Option, the minimum amount of the purchase payment you may allocate is
$2,000. The first periodic transfer will occur on the date you allocate your
purchase payment to the DCA Fixed Rate Option. Subsequent transfers will occur
on the
24
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
monthly anniversary of the first transfer. Currently, you may choose to have the
purchase payments allocated to the DCA Fixed Rate Option transferred to the
other options in either six or twelve monthly installments, and you may not
change that number of monthly installments after you have chosen the DCA Fixed
Rate Option. You may allocate to both the six-month and twelve-month options.
(In the future, we may make available other numbers of transfers and other
transfer schedules--for example, quarterly as well as monthly.) If you choose a
six-payment transfer schedule, each transfer generally will equal 1/6th of the
amount you allocated to the DCA Fixed Rate Option, and if you choose a
twelve-payment transfer schedule, each transfer generally will equal 1/12th of
the amount you allocated to the DCA Fixed Rate Option. In either case, the final
transfer amount generally will also include the credited interest. You may
change at any time the options into which the DCA Fixed Rate Option assets are
transferred. You may make a one time transfer of the remaining value out of your
DCA Fixed Rate Option, if you so choose. Transfers from the DCA Fixed Rate
Option do not count toward the maximum number of free transfers allowed under
the contract.
If you make a withdrawal or have a fee assessed from your contract, and all
or part of that withdrawal or fee comes out of the DCA Fixed Rate Option, we
will recalculate the periodic transfer amount to reflect the change. This
recalculation may include some or all of the interest credited to the date of
the next scheduled transfer. If a withdrawal or fee assessment reduces the
monthly transfer amount below $100, we will transfer the remaining balance in
the DCA Fixed Rate Option on the next scheduled transfer date.
By investing amounts on a regular basis instead of investing the total amount
at one time, the DCA Fixed Rate Option may decrease the effect of market
fluctuation on the investment of your purchase payment. Of course, dollar cost
averaging cannot ensure a profit or protect against loss in a declining market.
MARKET VALUE ADJUSTMENT OPTION
Under the market value adjustment option, we have the right to offer one or more
of several guarantee periods. These guarantee periods are 1 year (currently
available only as a renewal option), 2 years, 3 years, 4 years, 5 years, 6
years, 7 years, 8 years, 9 years, or 10 years in length.
We declare the interest rate for each available guarantee period
periodically, but we guarantee that we will declare no less than 3% interest
with respect to any guarantee period. You will earn interest on your invested
purchase payment at the rate that we have declared for the guarantee period you
have chosen. You must invest at least $1,000.
We may offer lower interest rates for Contracts With Credit than for
Contracts Without Credit.
We express interest rates as annual rates, although we credit interest within
each guarantee period on a daily basis. The daily interest that we credit is
equal to the pro rated portion of the interest that would be earned on an annual
basis. We credit interest from the business day on which your purchase payment
is received in good order at the Prudential Annuity Service Center until the
earliest to occur of any of the following events: (a) full surrender of the
Contract, (b) commencement of annuity payments or settlement, (c) cessation of
the guarantee period, (d) withdrawal or transfer the value of the guarantee
period, or (e) death of the first to die of the owner and joint owner (or
annuitant, for entity-owned contracts) unless the contract is continued under
the spousal continuance provision.
During the 30 day period immediately following the end of a guarantee period,
we allow you to do any of the following, without the imposition of the market
value adjustment:
(a) withdrawal or transfer the value of the guarantee period,
(b) allocate the value in the guarantee period to another guarantee period or
other investment option (provided that the new guarantee period ends prior
to the annuity date, if earlier). You will
25
2:
WHAT INVESTMENT OPTIONS CAN I CHOOSE? CONTINUED
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
receive the interest rate applicable on the date we receive your
instruction, or
(c) apply the value in the guarantee period to the annuity or settlement option
of your choice.
If we do not receive instructions from you concerning the disposition of the
contract value in your maturing guarantee period, we will reinvest the contract
value in the Prudential Money Market Portfolio investment option.
During the 30 day period immediately following the end of the guarantee
period, or until you elect to do either a, b or c delineated immediately above,
you will receive the current interest rate applicable to the guarantee period
having the same duration as the guarantee period that just matured, which is
offered on the day immediately following the end of the matured guarantee
period. However, if at that time we do not offer a guarantee period with the
same duration as that which matured, you will then receive the current interest
rate applicable to the shortest guarantee period then offered.
Under the market value adjustment option, while your money remains in the
contract for the full guarantee period, your principal amount is guaranteed and
the interest amount that your money will earn is guaranteed by us to always be
at least 3%.
Payments allocated to the fixed interest rate options become part of Pruco
Life's general assets. Payments allocated to the market value adjustment option
are held as a separate pool of assets, but the income, gains or losses
experienced by these assets are not directly credited or charged against the
contracts. As a result, the strength of our guarantees under these options is
based on the overall financial strength of Pruco Life.
MARKET VALUE ADJUSTMENT
When you allocate a purchase payment or transfer contract value to a guarantee
period, we use that money to buy and sell securities and other instruments to
support our obligation to pay interest. Generally, we buy bonds for this
purpose. The duration of the bonds and other instruments that we buy with
respect to a particular guarantee period is influenced significantly by the
length of the guarantee period. Thus, for example, we typically would acquire
longer-duration bonds with respect to the 10 year guarantee period than we do
for the 3 year guarantee period. The value of these bonds is affected by changes
in interest rates, among other factors. The market value adjustment that we
assess against your contract value if you withdraw or transfer prior to the end
of a guarantee period involves our attributing to you a portion of our
investment experience on these bonds and other instruments. For example, if you
make a full withdrawal when interest rates have risen since the time of your
investment, the bonds and other investments in the guarantee period likely would
have decreased in value, meaning that we would impose a "negative" market value
adjustment on you (i.e., one that results in a reduction of the withdrawal
proceeds that you receive). For a partial withdrawal, we would deduct a negative
market value adjustment from your remaining contract value. Conversely, if
interest rates have decreased, the market value adjustment would be positive.
Other things you should know about the market value adjustment include the
following:
- - We determine the market value adjustment according to a mathematical formula,
which is set forth at the end of this prospectus under the heading
"Market-Value Adjustment Formula." In that section of the prospectus, we also
provide hypothetical examples of how the formula works.
- - In addition to imposing a market value adjustment on withdrawals, we also
will impose a market value adjustment on the contract value you apply to an
annuity or settlement option, unless you annuitize after the end of a
guarantee period. The laws of certain states may prohibit us from imposing a
market value adjustment on the annuity date.
YOU SHOULD REALIZE, HOWEVER, THAT APART FROM THE MARKET VALUE ADJUSTMENT, THE
VALUE OF THE BENEFIT IN YOUR GUARANTEE PERIOD UNDER YOUR CONTRACT DOES NOT
DEPEND ON THE INVESTMENT PERFORMANCE OF THE BONDS AND OTHER INSTRUMENTS THAT WE
HOLD WITH RESPECT TO YOUR GUARANTEE PERIOD. APART FROM THE EFFECT OF ANY MARKET
VALUE ADJUSTMENT, WE DO NOT PASS THROUGH TO YOU THE GAINS OR LOSSES ON THE BONDS
AND OTHER INSTRUMENTS THAT WE HOLD IN CONNECTION WITH A GUARANTEE PERIOD.
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STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
TRANSFERS AMONG OPTIONS
You can transfer money among the variable investment options and the one-year
fixed interest rate option. In addition, you can transfer contract value out of
a market value adjustment guarantee period into another market value adjustment
guarantee period, a variable investment option, or the one-year fixed interest
rate option, although a market value adjustment will apply to any transfer you
make prior to the end of a guarantee period. You may transfer contract value
into the market value adjustment option at any time, provided it is at least
$1,000.
You may make your transfer request by telephone, electronically, or otherwise
in paper form to the Prudential Annuity Service Center. You may make up to two
telephone and electronic transfer requests per month. You must make any
additional transfer requests during that month in writing with an original
signature. We have procedures in place to confirm that instructions received by
telephone or electronically are genuine. We will not be liable for following
telephone or electronic instructions that we reasonably believe to be genuine.
We require any transfer request that you submit by fax to be accompanied by a
confirming telephone call to the Prudential Annuity Service Center. Your
transfer request will take effect at the end of the business day on which we
receive it. Our business day generally closes at 4:00 p.m. Eastern time, and
requests received after that time will take effect at the end of the next
business day.
YOU CAN MAKE TRANSFERS OUT OF A FIXED INTEREST-RATE OPTION, OTHER THAN THE
DCA OPTION, ONLY DURING THE 30-DAY PERIOD FOLLOWING THE END OF THE ONE YEAR
INTEREST RATE PERIOD. TRANSFERS FROM THE DCA OPTION ARE MADE ON A PERIODIC BASIS
FOR THE PERIOD THAT YOU SELECT.
During the contract accumulation phase, you can make up to 12 transfers each
contract year without charge. We charge $25 for each transfer after the twelfth
in a contract year. (Dollar Cost Averaging and Auto-Rebalancing transfers
whether or not part of the DCA fixed rate option are always free, and do not
count toward the 12 free transfers per year.)
OTHER AVAILABLE FEATURES
DOLLAR COST AVERAGING
The dollar cost averaging (DCA) feature (which is distinct from the DCA Fixed
Rate Option) allows you to systematically transfer either a fixed dollar amount
or a percentage out of any variable investment option and into one or more other
variable investment options or the one-year fixed rate option. You can have
these automatic transfers occur monthly, quarterly, semiannually or annually. By
investing amounts on a regular basis instead of investing the total amount at
one time, dollar cost averaging may decrease the effect of market fluctuation on
the investment of your purchase payment. Of course, dollar cost averaging cannot
ensure a profit or protect against loss in a declining market.
Each dollar cost averaging transfer must be at least $100. Transfers will be
made automatically on the schedule you choose until the entire amount you chose
to have transferred has been transferred or until you tell us to discontinue the
transfers. If the remaining amount to be transferred drops below $100, the
entire remaining balance will be transferred on the next transfer date. You can
allocate additional amounts to be transferred at any time.
Your transfers will occur on the last calendar day of each transfer period
you have selected, provided that the New York Stock Exchange is open on that
date. If the New York Stock Exchange is not open on a particular transfer date,
the transfer will take effect on the next business day.
Any dollar cost averaging transfers you make do not count toward the 12 free
transfers you are allowed each contract year. The dollar cost averaging feature
is available only during the contract accumulation phase.
ASSET ALLOCATION PROGRAM
We recognize the value of having advice when deciding how to allocate your
purchase payments among the investment options. If you choose to participate in
the Asset Allocation Program, your representative will give you a questionnaire
to complete that will help determine a program that is appropriate for you. We
will prepare your asset allocation based on your answers to the questionnaire.
We will not charge you for this
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WHAT INVESTMENT OPTIONS CAN I CHOOSE? CONTINUED
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
service and you are not obligated to participate or to invest according to
program recommendations.
AUTO-REBALANCING
Once you have allocated your money among the variable investment options, the
actual performance of the investment options may cause your allocation to shift.
For example, an investment option that initially holds only a small percentage
of your assets could perform much better than another investment option. Over
time, this option could increase to a larger percentage of your assets than you
desire. You can direct us to automatically rebalance your assets to return to
your original allocation percentages or to subsequent allocation percentages you
select. We will rebalance only the variable investment options that you have
designated. If you also participate in the DCA feature, then the variable
investment option from which you make the DCA transfers will not be rebalanced.
You may choose to have your rebalancing occur monthly, quarterly,
semiannually, or annually. The rebalancing will occur on the last calendar day
of the period you have chosen, provided that the New York Stock Exchange is open
on that date. If the New York Stock Exchange is not open on that date, the
rebalancing will take effect on the next business day.
Any transfers that occur as a result of the Auto-Rebalancing feature do not
count toward the 12 free transfers you are allowed per year. The
auto-rebalancing feature is available only during the contract accumulation
phase. If you choose auto-rebalancing and dollar cost averaging,
auto-rebalancing will take place after the transfers from your DCA account.
VOTING RIGHTS
We are the legal owner of the shares of the mutual funds available as variable
investment options. However, we currently vote the shares of the mutual funds
according to voting instructions we receive from contract owners. When a vote is
required, we will mail you a form that you can complete and return to us to tell
us how you wish us to vote. When we receive those instructions, we will vote all
of the shares we own on your behalf in accordance with those instructions. We
will vote fund shares for which we do not receive instructions, and any other
shares that we own, in the same proportion as shares for which we do receive
instructions from contract owners. We may change the way your voting
instructions are calculated if federal or state law requires or permits it.
SUBSTITUTION
We may substitute one or more of the mutual funds used by the variable
investment options. We would not do this without the approval of the SEC and any
necessary state insurance departments. We would give you specific notice in
advance of any substitution we intended to make. We may also stop allowing
investments in existing funds.
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3:
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE
INCOME PHASE? (ANNUITIZATION)
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We can begin making annuity payments any time on or after the first contract
anniversary. Annuity payments must begin no later than the later of the contract
anniversary next following the annuitant's 90th birthday or the tenth contract
anniversary.
Upon annuitization, any value in a guarantee period of the market value
adjustment option may be subject to a market value adjustment.
We make the income plans described below available at any time before the
annuity date. We call these plans "annuity options" or "settlement options."
During the income phase, all of the annuity options under this contract are
fixed annuity options. This means that you no longer invest in the variable
investment options--that is, in the underlying mutual funds--on or after the
annuity date. If another annuity option is not selected by the annuity date, you
will automatically select the Life Income Annuity Option (Option 2, described
below) unless prohibited by applicable law. GENERALLY, ONCE THE ANNUITY PAYMENTS
BEGIN, THE ANNUITY OPTION CANNOT BE CHANGED AND YOU CANNOT MAKE WITHDRAWALS.
OPTION 1
ANNUITY PAYMENTS FOR A FIXED PERIOD
Under this option, we will make equal payments for the period chosen, from 10
years up to 25 years (but not to exceed life expectancy). We will make these
payments monthly, quarterly, semiannually, or annually, as you choose, for the
fixed period. If the annuitant dies during the income phase, we will continue
payments to the beneficiary for the remainder of the fixed period or, if the
beneficiary so chooses, we will make a single lump-sum payment. We calculate the
amount of the lump sum payment as the present value of the unpaid future
payments based upon the interest rate used to compute the actual payments. That
interest rate will always be at least 3% a year.
OPTION 2
LIFE INCOME ANNUITY OPTION
Under this option, we will make annuity payments monthly, quarterly,
semiannually, or annually as long as the annuitant is alive. If the annuitant
dies before we have made 10 years' worth of payments, we will pay the
beneficiary the present value of the remaining annuity payments in one lump sum,
unless we were specifically instructed to continue to pay the remaining monthly
annuity payments. We calculate the present value of the remaining annuity
payments using the interest rate used to compute the amount of the original 120
payments. That interest rate will always be at least 3% a year. If an annuity
option is not selected by the annuity date, you will automatically select this
option.
OTHER ANNUITY OPTIONS
We currently offer a variety of other annuity options. At the time annuity
payments are chosen, we may make available to you any of the fixed annuity
options then offered.
TAX CONSIDERATIONS
If your contract is held under a tax-favored plan, as discussed on page 42, you
should consider the minimum distribution requirements mentioned on page 43 when
selecting your annuity option.
For certain contracts held in connection with "qualified" retirement plans
(such as a Section 401(k) plan), please note that if you are married at the time
your payments commence, you may be required by federal law to choose an income
option that provides at least a 50 percent joint and survivor annuity to your
spouse, unless your spouse waives that right. Similarly, if you are married at
the time of your death, federal law may require all or a portion of the death
benefit to be paid to your spouse, even if you designated someone else as your
beneficiary. For more information, consult the terms of your retirement
arrangement.
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4:
WHAT IS THE
DEATH BENEFIT?
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THE DEATH BENEFIT FEATURE PROTECTS THE VALUE OF THE CONTRACT FOR THE
BENEFICIARY.
BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. You name the beneficiary at the time the contract is issued, unless you
change it at a later date. A change of beneficiary will take effect on the date
you sign the change request form. Unless you name an irrevocable beneficiary,
during the accumulation period, you can change the beneficiary at any time
before the owner dies.
CALCULATION OF THE DEATH BENEFIT
If the owner or joint owner dies during the accumulation phase, we will, upon
receiving the appropriate proof of death and any other needed documentation
("due proof of death"), pay a death benefit to the beneficiary designated by the
deceased owner or joint owner. If there are an owner and joint owner of the
contract, and the owner's spouse is both the joint owner and the beneficiary, at
the death of the first to die, the death benefit will be paid to the surviving
owner or the surviving owner may continue the contract under the Spousal
Continuance Benefit. See "Spousal Continuance Benefit" on page 31. Upon death,
the beneficiary will receive the greater of the following:
1) The current value of your contract (as of the time we receive due proof of
death). If you have purchased the Contract With Credit, we will first deduct
any credit corresponding to a purchase payment made within one year of death.
We impose no market value adjustment on contract value held within the market
value adjustment option when a death benefit is paid.
2) Either the base death benefit, which equals the total invested purchase
payments you have made proportionally reduced by any withdrawals, or, if you
have chosen the guaranteed minimum death benefit, the GMDB protected value.
GUARANTEED MINIMUM DEATH BENEFIT
The guaranteed minimum death benefit (GMDB) provides for the option to receive
an enhanced death benefit upon the death of the sole owner or the first to die
of the owner or joint owner during the accumulation phase. The GMDB protected
value is calculated daily.
GMDB STEP-UP
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS LESS THAN AGE 80
ON THE CONTRACT DATE, the GMDB step-up before the first contract anniversary is
the initial invested purchase payment increased by subsequent invested purchase
payments, and proportionally reduced by the effect of withdrawals. The GMDB
step-up on each contract anniversary will be the greater of the previous GMDB
step-up and the contract value as of such contract anniversary. Between contract
anniversaries, the GMDB step-up will increase by invested purchase payments and
reduce proportionally by withdrawals.
We stop increasing the GMDB step-up by any appreciation in the contract value
on the later of:
- - the contract anniversary coinciding with or next following the sole or older
owner's 80th birthday, or
- - the 5th contract anniversary.
However we still increase the GMDB protected value by subsequent invested
purchase payments and proportionally reduce it by withdrawals.
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS BETWEEN AGE 80
AND 85 ON THE CONTRACT DATE, the GMDB step-up before the third contract
anniversary is the sum of invested purchase payments, reduced by the effect of
withdrawals. On the third contract anniversary, we will adjust the GMDB step-up
to the greater of the then current GMDB step-up or the contract value as of that
contract anniversary. Thereafter we will only increase the GMDB protected value
by subsequent invested purchase payments and proportionally reduce it by
withdrawals.
Special rules apply if the beneficiary is the spouse of the owner and the
contract does not have a joint owner. In that case, upon the death of the owner,
the spouse will have the choice of the following:
- - If the sole beneficiary under the contract is the owner's spouse, and the
other requirements of the Spousal Continuance Benefit are met (see page 31),
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
then the contract can continue, and the spouse will become the new owner of
the contract; or
- - The spouse can receive the death benefit. If the spouse does wish to receive
the death benefit, he or she must make that choice within the first 60 days
following our receipt of due proof of death. Otherwise, the beneficiary will
receive the death benefit.
If ownership of the contract changes as a result of the owner assigning it to
someone else, we will reset the value of the death benefit to equal the contract
value on the date the change of ownership occurs, and for purposes of computing
the future death benefit, we will treat that contract value as a purchase
payment occurring on that date.
SPECIAL RULES IF JOINT OWNERS
If the contract has an owner and a joint owner and they are spouses at the time
that one dies the Spousal Continuance Benefit may apply. See "Spousal
Continuance Benefit" below. If the Contract has an owner and a joint owner and
they are not spouses at the time one dies, we will pay the death benefit and the
contract will end.
PAYOUT OPTIONS
The beneficiary may, within 60 days of providing due proof of death, choose to
take the death benefit under one of several death benefit payout options listed
below.
The death benefit payout options are:
CHOICE 1. Lump sum payment of the death benefit. If the beneficiary does not
choose a payout option within sixty days, the beneficiary will receive this
payout option.
CHOICE 2. The payment of the entire death benefit within a period of 5 years
from the date of death of the first to die of the owner or joint owner.
The entire death benefit will include any increases or losses resulting
from the performance of the variable or fixed interest rate options during
this period. During this period the beneficiary may: reallocate the contract
value among the variable or one-year fixed interest rate options; name a
beneficiary to receive any remaining death benefit in the event of the
beneficiary's death; and make withdrawals from the contract value, in which
case, any such withdrawals will not be subject to any withdrawal charges.
However, the beneficiary may not make any purchase payments to the contract.
During this 5 year period, we will continue to deduct from the death
benefit proceeds the charges and costs that were associated with the features
and benefits of the contract. Some of these features and benefits may not be
available to the beneficiary, such as the spousal continuance benefit.
CHOICE 3. Payment of the death benefit under an annuity or annuity settlement
option over the lifetime of the beneficiary or over a period not extending
beyond the life expectancy of the beneficiary with distribution beginning
within one year of the date of death of the last to survive of the owner or
joint owner.
If the contract has an owner and a joint owner:
- - If the owner and joint owner are spouses at the death of the first to die of
the two, any portion of the death benefit not applied under Choice 3 within
one year of the survivor's date of death must be distributed within five
years of the survivor's date of death.
- - If the owner and joint owner are not spouses at the death of the first to die
of the two, any portion of the death benefit (which is equal to the adjusted
contract value) not applied under Choice 3 within one year of the date of
death of the first to die must be distributed within five years of that date
of death.
The tax consequences to the beneficiary vary among the three death benefit
payout options. See "What are the Tax Considerations Associated with the
Strategic Partners Annuity One Contract?" on page 40.
SPOUSAL CONTINUANCE BENEFIT
This benefit is available if, on the date we receive due proof of the owner's
death, (1) there is only one owner of the contract and there is only one
beneficiary who is the owner's spouse; or (2) there are an owner and joint owner
of the contract, and the joint owner is the owner's spouse and the owner's
beneficiary under the
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4:
WHAT IS THE DEATH BENEFIT? CONTINUED
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
contract. In no event, however, can the annuitant be older than the maximum age
for annuitization on the date of the spouse's death. In such cases, the
surviving spouse, or annuitant if other than the surviving spouse, cannot be
older than age 95 on that date, and the surviving spouse will become the new
sole owner under the contract. Assuming the above conditions are present, the
surviving spouse can elect the spousal continuance benefit, but must do so no
later than 60 days after furnishing due proof of the owner's death in good
order.
Upon activation of the spousal continuance benefit, the contract value is
adjusted to equal the amount of the death benefit to which the surviving spouse
would have been entitled. This contract value will serve as the basis for
calculating any death benefit payable upon the death of the surviving spouse. We
will allocate any increase in the adjusted contract value among the variable,
fixed interest rate or market value adjustment options in the same proportions
that existed immediately prior to the spousal continuance adjustment.
Under the spousal continuance benefit, we waive any potential withdrawal
charges applicable to purchase payments made prior to activation of the spousal
continuance benefit. However, we will continue to impose withdrawal charges on
purchase payments made after activation of this benefit. In addition, contract
value allocated to the market value adjustment option will remain subject to a
potential market value adjustment.
IF YOU ELECTED THE BASE DEATH BENEFIT, then upon activation of the spousal
continuance benefit, we will adjust the contract value to equal the greater of:
- - the contract value, or
- - the sum of all invested purchase payments (adjusted for withdrawals).
IF YOU HAVE ELECTED THE GMDB STEP-UP, we will adjust the contract value to
equal the greater of:
- - the contract value, or
- - the GMDB step-up.
After we have made the adjustment to contract value set out immediately
above, we will continue to compute the GMDB step-up under the surviving spousal
owner's contract, and will do so in accordance with the preceding paragraphs.
If the contract is being continued by the surviving spouse, the attained age
of the surviving spouse will be the basis used in determining the death benefit
payable under the GMDB provisions of the contract.
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5:
HOW CAN I PURCHASE A STRATEGIC PARTNERS
ANNUITY ONE CONTRACT?
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PURCHASE PAYMENTS
The initial purchase payment is the amount of money you first pay us to purchase
the contract. The minimum initial purchase payment is $10,000. With some
restrictions, you can make additional purchase payments of $500 or more at any
time during the accumulation phase. You may purchase this contract only if you
are age 85 or younger, and certain age limits apply to certain features and
benefits described herein. However, no subsequent purchase payments may be made
on or after the earliest of the 85th birthday of the owner, joint owner, or
annuitant.
Currently, the maximum aggregate purchase payments you may make is $7
million. We limit the maximum total purchase payments in any contract year other
than the first to $2 million. You must obtain our approval prior to submitting a
purchase payment of $5 million or greater within the first contract year.
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a contract, we will allocate your invested purchase payment
among the variable or fixed interest rate investment options or the market value
adjustment option based on the percentages you choose. The percentage of your
allocation to a particular investment option can range in whole percentages from
0% to 100%.
You may change your allocation of future invested purchase payments at any
time. Contact the Prudential Annuity Service Center for details.
If you make an additional purchase payment without allocation instructions,
we will allocate the invested purchase payment in the same proportion as your
most recent purchase payment, unless you directed us in connection with that
purchase payment to make that allocation on a one-time-only basis.
The allocation procedure mentioned above will apply unless that portion
designated for the DCA Fixed Rate Option is less than $2,000. In that case, we
will use your transfer allocation for the DCA Fixed Rate Option as part of your
allocation instructions until you direct us otherwise.
We will credit the initial purchase payment to your contract within two
business days from the day on which we receive your payment at the Prudential
Annuity Service Center. If, however, your first payment is made without enough
information for us to set up your contract, we may need to contact you to obtain
the required information. If we are not able to obtain this information within
five business days, we will within that five business day period either return
your purchase payment or obtain your consent to continue holding it until we
receive the necessary information. We will generally credit each subsequent
purchase payment as of the business day we receive it in good order at the
Prudential Annuity Service Center. Our business day generally closes at 4:00
p.m. Eastern time.
CREDITS
If you purchase the Contract With Credit, we will add a credit amount to your
contract value with each purchase payment you make. The credit amount is
allocated to the variable or fixed interest rate investment options in the same
percentages as the purchase payment.
The bonus credit that we pay with respect to any purchase payment depends on
(i) the age of the older of the owner or joint owner on the date on which the
purchase payment is made and (ii) the amount of the purchase payment.
Specifically,
- - if the elder owner is 80 or younger on the date that the purchase payment is
made, then we will add a bonus credit to the purchase payment equal to 4% if
the purchase payment is less than $250,000; 5% if the purchase payment is
equal to or greater than $250,000 but less than $1 million; or 6% if the
purchase payment is $1 million or greater; and
- - if the older owner is aged 81-85 on the date that the purchase payment is
made, then we will add a bonus credit equal to 3% of the amount of the
purchase payment.
Under the Contract With Credit, if we pay a death benefit under the contract,
we have a contractual right to take back any credit we applied within one year
of the date of death. If the owner returns the contract during the free look
period, we will recapture bonus credits. However, we will not, unless and until
we obtain SEC exemptive relief, recoup for our own assets the full
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PART II
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amount of the 6% bonus credit applicable to purchase payments of $1 million or
greater that we had given to you. Rather, we will recoup an amount equal to the
value of the credit as of the business day on which we receive your request,
less any charges attributable to that credit. We reserve the right to recapture
the entire amount of the credit upon obtaining appropriate approval of the SEC
with regard to that bonus credit.
CALCULATING CONTRACT VALUE
The value of your contract will go up or down depending on the investment
performance of the variable investment options you choose. To determine the
value of your contract, we use a unit of measure called an accumulation unit. An
accumulation unit works like a share of a mutual fund.
Every day we determine the value of an accumulation unit for each of the
variable investment options. We do this by:
1) adding up the total amount of money allocated to a specific investment
option,
2) subtracting from that amount insurance charges and any other applicable
charges such as for taxes, and
3) dividing this amount by the number of outstanding accumulation units.
When you make a purchase payment, we credit your contract with accumulation
units of the subaccount or subaccounts for the investment options you choose. We
determine the number of accumulation units credited to your contract by dividing
the amount of the purchase payment, plus (if you have purchased the Contract
With Credit) any applicable credit, allocated to an investment option by the
unit price of the accumulation unit for that investment option. We calculate the
unit price for each investment option after the New York Stock Exchange closes
each day and then credit your contract. The value of the accumulation units can
increase, decrease, or remain the same from day to day.
We cannot guarantee that your contract value will increase or that it will
not fall below the amount of your total purchase payments. However, we do
guarantee a minimum interest rate of 3% a year, on that portion of the contract
value allocated to the one-year fixed interest-rate option or the DCA Fixed
Interest Rate Option.
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STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
6:
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC
PARTNERS ANNUITY ONE CONTRACT?
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THERE ARE CHARGES AND OTHER EXPENSES ASSOCIATED WITH THE CONTRACT THAT REDUCE
THE RETURN ON YOUR INVESTMENT. WE DESCRIBE THESE CHARGES AND EXPENSES BELOW.
INSURANCE AND ADMINISTRATIVE COST
Each day, we make a deduction for the insurance and administrative cost. This
cost covers our expenses for mortality and expense risk, administration,
marketing and distribution. If you choose the guaranteed minimum death benefit
option, the insurance and administrative cost also includes a charge to cover
our assumption of the associated risk. The mortality risk portion of the cost is
for our assumption of the risk that the annuitant(s) will live longer than
expected based on our life expectancy tables. When this happens, we pay a
greater number of annuity payments. The expense risk portion of the cost is for
our assumption of the risk that the current costs will be insufficient in the
future to cover the cost of administering the contract. The administrative
expense portion of the cost compensates us for the expenses associated with the
administration of the contract. This includes preparing and issuing the
contract; establishing and maintaining contract records; preparation of
confirmations and annual reports; personnel costs; legal and accounting fees;
filing fees; and systems costs. The guaranteed minimum death benefit risk
portion of the cost, if applicable, covers our assumption of the risk that the
protected value of the contract will be larger than the base death benefit if
the contract owner dies during the accumulation phase.
If the insurance and administrative cost is not sufficient to cover our
expenses, then we will bear the loss. We do, however, expect to profit from this
cost. The insurance and administrative cost for your contract cannot be
increased. We may use any profits from this cost to pay for the costs of
distributing the contracts. If you choose the Contract With Credit, we will also
use any profits from this charge to recoup our costs of providing the credit.
We calculate the insurance and administrative cost based on the average daily
value of all assets allocated to the variable investment options. These costs
are not assessed against amounts allocated to the fixed interest rate options.
The amount of the cost depends on the death benefit option that you choose. The
cost is equal to:
- 1.40% on an annual basis if you choose the base death benefit, and
- 1.65% on an annual basis if you choose the step-up guaranteed minimum
death benefit option.
We impose an additional insurance and administrative cost of 0.10% annually
(of account value attributable to the variable investment options) for the
Contract with Credit.
CONTRACT MAINTENANCE CHARGE
We do not deduct a contract maintenance charge for administrative expenses while
your contract value is $75,000 or more. If your contract value is less than
$75,000 on a contract anniversary during the accumulation phase or when you make
a full withdrawal, we will deduct $30 (or a lower amount equal to 2% of your
contract value) for administrative expenses. We may raise the level of the
contract value at which we waive this fee. We will deduct this charge
proportionately from each of your contract's investment options.
WITHDRAWAL CHARGE
A withdrawal charge may apply if you make a full or partial withdrawal during
the withdrawal charge period for a purchase payment. The amount and duration of
the withdrawal charge depends on whether you choose the Contract With Credit or
the Contract Without Credit. The withdrawal charge varies with the number of
contract anniversaries that have elapsed since each purchase payment was made.
Specifically, we maintain an "age" for each purchase payment you have made by
keeping track of how many contract anniversaries have passed since the purchase
payment was made.
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WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC
PARTNERS ANNUITY ONE CONTRACT? CONTINUED
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PART II
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The withdrawal charge is the percentage, shown below, of the amount withdrawn.
<Table>
<Caption>
NUMBER OF CONTRACT
ANNIVERSARIES SINCE THE CONTRACT WITHOUT
DATE OF EACH PURCHASE CONTRACT WITH CREDIT CREDIT WITHDRAWAL
PAYMENT WITHDRAWAL CHARGE CHARGE
- ----------------------- -------------------- -----------------
0 8% 7%
1 8% 6%
2 8% 5%
3 8% 4%
4 7% 3%
5 6% 2%
6 5% 1%
7 0% 0%
</Table>
If a withdrawal is effective on the day before a contract anniversary, the
withdrawal charge percentage as of the following contract anniversary will
apply.
If you request a withdrawal, we will deduct an amount from the contract value
that is sufficient to pay the withdrawal charge and provide you with the amount
requested.
If you request a full withdrawal, we will provide you with the full amount of
the contract value after making these deductions.
Each contract year, you may withdraw a specified amount of your contract
value without incurring a withdrawal charge. We determine the charge-free amount
available to you in a given contract year on the contract anniversary that
begins that year. In calculating the charge-free amount, we divide purchase
payments into two categories -- payments that are subject to a withdrawal charge
and those that are not. We determine the charge-free amount based only on
purchase payments that are subject to a withdrawal charge. The charge-free
amount in a given contract year is equal to 10% of the sum of all the purchase
payments subject to the withdrawal charge that you have made as of the
applicable contract anniversary. During the first contract year, the charge-free
amount is equal to 10% of the initial purchase payment. When you make a
withdrawal, we will first deduct the amount of the withdrawal from purchase
payments no longer subject to a withdrawal charge, and then from the available
charge-free amount, and will consider purchase payments to be paid out on a
first-in, first-out basis. Withdrawals in excess of the charge-free amount will
come first from purchase payments, also on a first-in, first-out basis, and will
be subject to withdrawal charges, if applicable, even if earnings are available
on the date of the withdrawal. Once you have withdrawn all purchase payments,
additional withdrawals will come from any earnings. We do not impose withdrawal
charges on earnings.
However, if a withdrawal or transfer is taken from a market value adjustment
guarantee period prior to the expiration of the rate guarantee period we will
make a market value adjustment.
If you choose the Contract With Credit and make a withdrawal that is subject
to a withdrawal charge, we may use part of that withdrawal charge to recoup our
costs of providing the credit.
Withdrawal charges will never be greater than permitted by applicable law.
If you surrender your contract, and later change your mind, we may allow you
to reinstate your contract during a limited period of time after the surrender.
For purposes of computing any withdrawal charge on a withdrawal you make after
the reinstatement, we will view the contract as having remained in effect
continuously. The minimal sales costs associated with reinstatements allow us to
offer this administrative option. Reinstatement will not reverse the tax
consequences or tax reporting associated with the surrender. See "What are the
Tax Considerations Associated with the Strategic Partners Annuity One Contract?"
page 40.
MINIMUM DISTRIBUTION REQUIREMENTS
If a withdrawal is taken from a tax qualified contract in order to satisfy an
IRS mandatory distribution requirement only with respect to that contract's
account balance, we will waive withdrawal charges. See "What are the Tax
Considerations Associated with the Strategic Partners Annuity One Contract?" on
page 40.
TAXES ATTRIBUTABLE TO PREMIUM
There are federal premium based taxes applicable to your purchase payment. We
are responsible for the payment of these taxes and may make a deduction from the
value of the contract to pay some or all of these taxes. Some of these taxes are
due when the contract is issued, others are due when the annuity
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payments begin. New York does not currently charge premium taxes on annuities.
It is also our current practice not to deduct a charge for the federal deferred
acquisition costs paid by us that are based on premium received. However, we
reserve the right to charge the contract owner in the future for any such
deferred acquisition costs and any federal, state or local income, excise,
business or any other type of tax measured by the amount of premium received by
us.
TRANSFER FEE
You can make 12 free transfers every contract year. We measure a contract year
from the date we issue your contract, which is the contract date. If you make
more than 12 transfers in a contract year (excluding Dollar Cost Averaging and
Auto-Rebalancing), we will deduct a transfer fee of $25 for each additional
transfer. We will deduct the transfer fee pro-rata from the investment options
from which the transfer is made.
COMPANY TAXES
We will pay the taxes on the earnings of the separate account. We do not
currently charge you for these taxes. We will periodically review the issue of
charging for these taxes and may impose a charge in the future.
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7:
HOW CAN I
ACCESS MY MONEY?
- --------------------------------------------------------------------------------
YOU CAN ACCESS YOUR MONEY BY:
- - MAKING A WITHDRAWAL (EITHER PARTIAL OR FULL); OR
- - CHOOSING TO RECEIVE ANNUITY PAYMENTS DURING THE INCOME PHASE.
WITHDRAWALS DURING THE ACCUMULATION PHASE
Following the free look period, when you make a full withdrawal, you will
receive the value of your contract minus any applicable charges and fees. We
will calculate the value of your contract and charges, if any, as of the date we
receive your request in good order at the Prudential Annuity Service Center.
Unless you tell us otherwise, we will take any partial withdrawal
proportionately from all of the investment options in which you have invested.
For a partial withdrawal, we will deduct any applicable charges and fees
proportionately from the investment options in your contract. The minimum amount
which may be withdrawn is $250. If you request a withdrawal that would reduce
your total contract fund below the minimum $2,000, we will withdraw the maximum
amount that will not reduce the total contract fund below that amount.
With respect to the variable investment options we will generally pay the
withdrawal amount, less any required tax withholding, within seven days after we
receive a withdrawal request in good order.
With respect to the market value adjustment option, you may specify the
guarantee period from which you would like to make a withdrawal. If you indicate
that the withdrawal is to originate from the market value adjustment option, but
you do not specify which guarantee period is to be involved, then we will take
the withdrawal from the guarantee period that has the least time remaining until
its maturity date. If you indicate that you wish to make a withdrawal, but do
not specify the investment options to be involved, then we will take the
withdrawal from your contract value on a pro rata basis from each investment
option that you have. In that situation, we will aggregate the contract value in
each of the guarantee periods that you have within the market value adjustment
option for purposes of making that pro rata calculation. The portion of the
withdrawal associated with the market value adjustment option then will be taken
from the guarantee periods with the least amount of time remaining until the
maturity date, irrespective of the original length of the guarantee period. You
should be aware that a withdrawal may avoid a withdrawal charge based on the
charge-free amount that we allow, yet still be subject to a market value
adjustment.
INCOME TAXES, TAX PENALTIES, AND CERTAIN RESTRICTIONS MAY APPLY TO ANY
WITHDRAWAL YOU MAKE. FOR A MORE COMPLETE EXPLANATION, SEE SECTION 8 OF THIS
PROSPECTUS.
AUTOMATED WITHDRAWALS
We offer an automated withdrawal feature. This feature enables you to receive
periodic withdrawals in monthly, quarterly, semiannual, or annual intervals. We
will process your withdrawals at the end of the business day at the intervals
you specify. We will continue at these intervals until you tell us otherwise.
You can make withdrawals from any designated investment option or proportionally
from all investment options (other than a guarantee period within the market
value adjustment option). The minimum automated withdrawal amount you can make
is $100.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO AUTOMATED
WITHDRAWALS. FOR A MORE COMPLETE EXPLANATION, SEE SECTION 8 OF THIS PROSPECTUS.
SUSPENSION OF PAYMENTS OR TRANSFERS
The Securities and Exchange Commission (SEC) may require us to suspend or
postpone payments made in connection with withdrawals or transfers for any
period when:
- - The New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- - Trading on the New York Stock Exchange is restricted;
- - An emergency exists, as determined by the SEC, during which sales and
redemptions of shares of the
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mutual funds are not feasible or we cannot reasonably value the accumulation
units; or
- - The Securities and Exchange Commission, by order, permits suspension or
postponement of payments for the protection of owners.
We expect to pay the amount of any withdrawal or transfer made from the fixed
interest rate options promptly upon request.
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8:
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC
PARTNERS ANNUITY ONE CONTRACT?
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The tax considerations associated with the Strategic Partners Annuity One
contract vary depending on whether the contract is (i) owned by an individual
and not associated with a tax-favored retirement plan, or (ii) held under a
tax-favored retirement plan. We discuss the tax considerations for these
categories of contracts below. The discussion is general in nature and describes
only federal income tax law (not state or other tax laws). It is based on
current law and interpretations, which may change. It is not intended as tax
advice. You should consult with a qualified tax adviser for complete information
and advice.
CONTRACTS OWNED BY INDIVIDUALS (NOT ASSOCIATED WITH TAX-FAVORED RETIREMENT
PLANS)
TAXES PAYABLE BY YOU
We believe the contract is an annuity contract for tax purposes. Accordingly, as
a general rule, you should not pay any tax until you receive money under the
contract.
Generally, annuity contracts issued by the same company (and affiliates) to
you during the same calendar year must be treated as one annuity contract for
purposes of determining the amount subject to tax under the rules described
below.
It is possible that the Internal Revenue Service would assert that some or
all of the charges for the guaranteed minimum death benefit should be treated
for federal income tax purposes as a partial withdrawal from the contract. If
this were the case, the charge for this benefit could be deemed a withdrawal and
treated as taxable to the extent there are earnings in the contract.
Additionally, for owners under age 59 1/2, the taxable income attributable to
the charge for the benefit could be subject to a tax penalty.
If the Internal Revenue Service determines that the deductions for one or
more benefits under the contract -- including, without limitation, the
guaranteed minimum death benefit and any supplemental benefit added by
endorsement -- are taxable withdrawals, then the sole or surviving owner may
cancel the affected benefit(s) within 90 days after notice from us.
TAXES ON WITHDRAWALS AND SURRENDER
If you make a withdrawal from your contract or surrender it before annuity
payments begin, the amount you receive will be taxed as ordinary income, rather
than as return of purchase payments, until all gain has been withdrawn. You will
generally be taxed on any withdrawals from the contract while you are alive even
if the withdrawal is paid to someone else.
If you assign or pledge all or part of your contract as collateral for a
loan, the part assigned will be treated as a withdrawal. Also, if you elect any
interest payment option that we may offer, that election will be treated, for
tax purposes, as surrendering your contract.
If you transfer your contract for less than full consideration, such as by
gift, you will trigger tax on the gain in the contract. This rule does not apply
if you transfer the contract to your spouse or under most circumstances if you
transfer the contract incident to divorce.
It is our position that the guaranteed minimum death benefit and other
contract benefits are an integral part of the annuity contract and accordingly
that the charges made against the annuity contract's cash value for the benefit
should not be treated as distributions subject to income tax. It is possible,
however, that the Internal Revenue Service could take the position that such
charges should be treated as distributions.
TAXES ON ANNUITY PAYMENTS
A portion of each annuity payment you receive will be treated as a partial
return of your purchase payments and will not be taxed. The remaining portion
will be taxed as ordinary income. Generally, the nontaxable portion is
determined by multiplying the annuity payment you receive by a fraction, the
numerator of which is your purchase payments (less any amounts previously
received tax-free) and the denominator of which is the total expected payments
under the contract.
After the full amount of your purchase payments have been recovered tax-free,
the full amount of the annuity payments will be taxable. If annuity payments
stop due to the death of the annuitant before the full amount of your purchase
payments have been recovered, a tax deduction may be allowed for the unrecovered
amount.
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
TAX PENALTY ON WITHDRAWALS AND ANNUITY PAYMENTS
Any taxable amount you receive under your contract may be subject to a 10% tax
penalty. Amounts are not subject to this tax penalty if:
- - the amount is paid on or after you reach age 59 1/2 or die;
- - the amount received is attributable to your becoming disabled;
- - the amount paid or received is in the form of level annuity payments not less
frequently than annually under a lifetime annuity;
TAXES PAYABLE BY BENEFICIARIES
All of the death benefit options are subject to income tax to the extent the
distribution exceeds the adjusted basis in the contract and the full value of
the death benefit is included in the owner's estate. Generally, the same tax
rules described above would also apply to amounts received by your beneficiary.
Choosing an annuity payment option instead of a lump sum death benefit may defer
taxes. Certain minimum distribution requirements apply upon your death, as
discussed further below. Tax consequences to the beneficiary vary among the
death benefit payment options.
- - Choice 1: the beneficiary is taxed on earnings in the contract.
- - Choice 2: the beneficiary is taxed as amounts are withdrawn (In this case
earnings are treated as being distributed first).
- - Choice 3: the beneficiary is taxed on each payment (part will be treated as
earnings and part as return of premiums).
REPORTING AND WITHHOLDING ON DISTRIBUTIONS
Taxable amounts distributed from your annuity contracts are subject to federal
and state income tax reporting and withholding. In general, we will withhold
federal income tax from the taxable portion of such distribution based on the
type of distribution. In the case of an annuity or similar periodic payment, we
will withhold as if you are a married individual with 3 exemptions unless you
designate a different withholding status. In the case of all other
distributions, we will withhold at a 10% rate. You may generally elect not to
have tax withheld from your payments. An election out of withholding must be
made on forms that we provide.
State income tax withholding rules vary and we will withhold based on the
rules of your State of residence. Special tax rules apply to withholding for
nonresident aliens, and we generally withhold income tax for nonresident aliens
at a 30% rate. A different withholding rate may be applicable to a nonresident
alien based on the terms of an existing income tax treaty between the United
States and the nonresident alien's country. Please refer to the CONTRACTS HELD
BY TAX FAVORED PLANS section for withholding rules for tax favored plans (for
example, an IRA).
Regardless of the amount withheld by us, you are liable for payment of
federal and state income tax on the taxable portion of annuity distributions.
You should consult with your tax advisor regarding the payment of the correct
amount of these income taxes and potential liability if you fail to pay such
taxes.
ANNUITY QUALIFICATION
Diversification And Investor Control In order to qualify for the tax rules
applicable to annuity contracts described above, the contract must be an annuity
contract for tax purposes. This means that the assets underlying the annuity
contract must be diversified, according to certain rules. It also means that we,
and not you as the contract-owner, must have sufficient control over the
underlying assets to be treated as the owner of the underlying assets for tax
purposes. We believe these rules, which are further discussed in the Statement
of Additional Information, will be met.
Required Distributions Upon Your Death Upon your death, certain distributions
must be made under the contract. The required distributions depend on whether
you die before you start taking annuity payments under the contract or after you
start taking annuity payments under the contract.
If you die on or after the annuity date, the remaining portion of the
interest in the contract must be distributed at least as rapidly as under the
method of distribution being used as of the date of death.
If you die before the annuity date, the entire interest in the contract must
be distributed within 5 years after
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PART II
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the date of death. However, if an annuity payment option is selected by your
designated beneficiary and if annuity payments begin within 1 year of your
death, the value of the contract may be distributed over the beneficiary's life
or a period not exceeding the beneficiary's life expectancy. Your designated
beneficiary is the person to whom benefit rights under the contract pass by
reason of death, and must be a natural person in order to elect an annuity
payment option based on life expectancy or a period exceeding five years.
If any portion of the contract is payable to (or for the benefit of) your
surviving spouse, that portion of the contract may be continued with your spouse
as the owner.
Changes In The Contract We reserve the right to make any changes we deem
necessary to assure that the contract qualifies as an annuity contract for tax
purposes. Any such changes will apply to all contract owners and you will be
given notice to the extent feasible under the circumstances.
ADDITIONAL INFORMATION
You should refer to the Statement of Additional Information if:
- - The contract is held by a corporation or other entity instead of by an
individual or as agent for an individual.
- - Your contract was issued in exchange for a contract containing purchase
payments made before August 14, 1982.
- - You transfer your contract to, or designate, a beneficiary who is either
37 1/2 years younger than you or a grandchild.
CONTRACTS HELD BY TAX FAVORED PLANS
The following discussion covers annuity contracts held under tax-favored
retirement plans. Currently, the contract may be purchased for use in connection
with individual retirement accounts and annuities (IRAs) which are subject to
Sections 408(a), 408(b) and 408A of the Internal Revenue Code of 1986, as
amended (Code). This description assumes that you have satisfied the
requirements for eligibility for these products.
YOU SHOULD BE AWARE THAT TAX FAVORED PLANS SUCH AS IRAS GENERALLY PROVIDE TAX
DEFERRAL REGARDLESS WHETHER THEY INVEST IN ANNUITY CONTRACTS. THIS MEANS THAT
WHEN A TAX FAVORED PLAN INVESTS IN AN ANNUITY CONTRACT, IT GENERALLY DOES NOT
RESULT IN ANY ADDITIONAL TAX DEFERRAL BENEFITS.
TYPES OF TAX FAVORED PLANS
IRAs If you buy a contract for use as an IRA, we will provide you a copy of
the prospectus and contract. The "IRA Disclosure Statement" on page 50 contains
information about eligibility, contribution limits, tax particulars, and other
IRA information. In addition to this information (some of which is summarized
below), the IRS requires that you have a "free look" after making an initial
contribution to the contract. During this time, you can cancel the contract by
notifying us in writing, and we will refund all of the purchase payments under
the contract (or, if provided by applicable state law, the amount credited under
the contract, calculated as of the date that we receive this cancellation
notice, if greater), less any applicable federal and state income tax
withholding.
Contributions Limits/Rollovers: Because of the way the contract is designed,
you may only purchase a contract for an IRA in connection with a "rollover" of
amounts from a qualified retirement plan or transfer from another IRA. You must
make a minimum initial payment of $10,000 to purchase a contract. This minimum
is greater than the maximum amount of any annual contribution allowed by law you
may make to an IRA. For 2002 to 2004 the limit is $3,000; increasing in 2005 to
2007, to $4,000; and for 2008, $5,000. After 2008 the contribution amount will
be indexed for inflation. The tax law also provides for a catch-up provision for
individuals who are age 50 and above. These taxpayers will be permitted to
contribute an additional $500 in years 2002 to 2005 and an additional $1,000 in
2006 and years thereafter). The "rollover" rules under the Code are fairly
technical; however, an individual (or his or her surviving spouse) may generally
"roll over" certain distributions from tax favored retirement plans (either
directly or within 60 days from the date of these distributions) if he or she
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meets the requirements for distribution. Once you buy the contract, you can make
regular IRA contributions under the contract (to the extent permitted by law).
However, if you make such regular IRA contributions, you should note that you
will not be able to treat the contract as a "conduit IRA," which means that you
will not retain possible favorable tax treatment if you subsequently "roll over"
the contract funds originally derived from a qualified retirement plan or TDA
into another Section 401(a) plan or TDA.
Required Provisions: Contracts that are IRAs (or endorsements that are part
of the contract) must contain certain provisions:
- - You, as owner of the contract, must be the "annuitant" under the contract
(except in certain cases involving the division of property under a decree of
divorce);
- - Your rights as owner are non-forfeitable;
- - You cannot sell, assign or pledge the contract, other than to Pruco Life of
New Jersey;
- - The annual premium you pay cannot be greater than the maximum amount allowed
by law, including catch-up contributions if applicable (which does not
include any rollover amounts);
- - The date on which annuity payments must begin cannot be later than the April
1st of the calendar year after the calendar year you turn age 70 1/2; and
- - Death and annuity payments must meet "minimum distribution requirements"
(described below).
Usually, the full amount of any distribution from an IRA (including a
distribution from this contract) which is not a rollover is taxable. As taxable
income, these distributions are subject to the general tax withholding rules
described earlier. In addition to this normal tax liability, you may also be
liable for the following, depending on your actions:
- - A 10% "early distribution penalty" (described below);
- - Liability for "prohibited transactions" if you, for example, borrow against
the value of an IRA; or
- - Failure to take a minimum distribution (also generally described below).
ROTH IRAs Like standard IRAs, income within a Roth IRA accumulates tax-free,
and contributions are subject to specific limits. Roth IRAs have, however, the
following differences:
- - Contributions to a Roth IRA cannot be deducted from your gross income;
- - "Qualified distributions" (generally, held for 5 tax years and payable on
account of death, disability, attainment of age 59 1/2, or first
time-homebuyer) from Roth IRAs are excludable from your gross income; and
- - If eligible, you may make contributions to a Roth IRA after attaining age
70 1/2, and distributions are not required to begin upon attaining such age
or at any time thereafter.
Because the contract's minimum initial payment of $10,000 is greater than the
maximum annual contribution permitted to be made to a Roth IRA, you may purchase
a contract as a Roth IRA only in connection with a "rollover" or "conversion" of
the proceeds of another traditional IRA, conduit IRA, SEP, SIMPLE-IRA, or Roth
IRA. The Code permits persons who meet certain income limitations (generally,
adjusted gross income under $100,000), and who receive certain qualifying
distributions from such non-Roth IRAs, to directly rollover or make, within 60
days, a "rollover" of all or any part of the amount of such distribution to a
Roth IRA which they establish. This conversion triggers current taxation (but is
not subject to a 10% early distribution penalty). Once the contract has been
purchased, regular Roth IRA contributions will be accepted to the extent
permitted by law.
MINIMUM DISTRIBUTION REQUIREMENTS AND PAYMENT OPTION
If you hold the contract under an IRA (or other tax-favored plan), IRS minimum
distribution requirements must be satisfied. This means that payments must start
by April 1 of the year after the year you reach age 70 1/2 and must be made for
each year thereafter. The amount of the payment must at least equal the minimum
required under the IRS rules. Several choices are available for calculating the
minimum amount,
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PARTNERS ANNUITY ONE CONTRACT CONTINUED
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PART II
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including a new method permitted under IRS regulations released in April 2002.
More information on the mechanics of this calculation is available on request.
Please contact us a reasonable time before the IRS deadline so that a timely
distribution is made. Please note that there is a 50% IRS penalty tax on the
amount of any minimum distribution not made in a timely manner.
You can use the Minimum Distribution option to satisfy the IRS minimum
distribution requirements for this contract without either beginning annuity
payments or surrendering the contract. We will send you a check for this minimum
distribution amount, less any other partial withdrawals that you made during the
year.
PENALTY FOR EARLY WITHDRAWALS
You may owe a 10% tax penalty on the taxable part of distributions received from
an IRA, SEP, SIMPLE-IRA (which may increase to 25%), Roth IRA, TDA or qualified
retirement plan before you attain age 59 1/2. There are only limited exceptions
to this tax, and you should consult your tax adviser for further details.
WITHHOLDING
Unless a distribution is an eligible rollover distribution that is "directly"
rolled over into another qualified plan, IRA (including the IRA variations
described above), SEP, 457 government plan or TDA, we will withhold at the rate
of 20%. This 20% withholding does not apply to distributions from IRAs and Roth
IRAs. For all other distributions, unless you elect otherwise, we will withhold
federal income tax from the taxable portion of such distribution at an
appropriate percentage. The rate of withholding on annuity payments where no
mandatory withholding is required is determined on the basis of the withholding
certificate that you file with us. If you do not file a certificate, we will
automatically withhold federal taxes on the following basis:
- - For any annuity payments not subject to mandatory withholding, you will have
taxes withheld by us as if you are a married individual, with 3 exemptions;
and
- - For all other distributions, we will withhold at a 10% rate.
We will provide you with forms and instructions concerning the right to elect
that no amount be withheld from payments in the ordinary course. However, you
should know that, in any event, you are liable for payment of federal income
taxes on the taxable portion of the distributions, and you should consult with
your tax advisor to find out more information on your potential liability if you
fail to pay such taxes.
ERISA DISCLOSURE/REQUIREMENTS
ERISA (the "Employee Retirement Income Security Act of 1974") and the Code
prevents a fiduciary and other "parties in interest" with respect to a plan
(and, for these purposes, an IRA would also constitute a "plan") from receiving
any benefit from any party dealing with the plan, as a result of the sale of the
contract. Administrative exemptions under ERISA generally permit the sale of
insurance/annuity products to plans, provided that certain information is
disclosed to the person purchasing the contract. This information has to do
primarily with the fees, charges, discounts and other costs related to the
contract, as well as any commissions paid to any agent selling the contract.
Information about any applicable fees, charges, discounts, penalties or
adjustments may be found under "What are the Expenses Associated with the
Strategic Partners Annuity One Contract" starting on page 35.
Information about sales representatives and commissions may be found under
"Other Information" and "Sale and Distribution of the Contract" on page 46.
In addition, other relevant information required by the exemptions is
contained in the contract and accompanying documentation. Please consult your
tax advisor if you have any additional questions.
SPOUSAL CONSENT RULES FOR RETIREMENT PLANS -- QUALIFIED CONTRACTS
If you are married at the time your payments commence, you may be required by
federal law to choose an income option that provides survivor annuity income to
your spouse, unless your spouse waives that right. Similarly, if you are married
at the time of your
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PART II
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death, federal law may require all or a portion of the death benefit to be paid
to your spouse, even if you designated someone else as your beneficiary. A brief
explanation of the applicable rules follows. For more information, consult the
terms of your retirement arrangement.
Defined Benefit Plans, Money Purchase Pension Plans, and ERISA 403(b)
Annuities. If you are married at the time your payments commence, federal law
requires that benefits be paid to you in the form of a "qualified joint and
survivor annuity" ("QJSA"), unless you and your spouse waive that right, in
writing. Generally, this means that you will receive a reduced payment during
your life and, upon your death, your spouse will receive at least one-half of
what you were receiving for life. You may elect to receive another income option
if your spouse consents to the election and waives his or her right to receive
the QJSA. If your spouse consents to the alternative form of payment, your
spouse may not receive any benefits from the plan upon your death. Federal law
also requires that the plan pay a death benefit to your spouse if you are
married and die before you begin receiving your benefit. This benefit must be
available in the form of an annuity for your spouse's lifetime and is called a
"qualified pre-retirement survivor annuity" ("QPSA"). If the plan pays death
benefits to other beneficiaries, you may elect to have a beneficiary other than
your spouse receive the death benefit, but only if your spouse consents to the
election and waives his or her right to receive the QPSA. If your spouse
consents to the alternate beneficiary, your spouse will receive no benefits from
the plan upon your death. Any QPSA waiver prior to your attaining age 35 will
become null and void on the first day of the calendar year in which you attain
age 35, if still employed.
Defined Contribution Plans (including 401(k) Plans). Spousal consent to a
distribution is generally not required. Upon your death, your spouse will
receive the entire death benefit, even if you designated someone else as your
beneficiary, unless your spouse consents in writing to waive this right. Also,
if you are married and elect an annuity as a periodic income option, federal law
requires that you receive a QJSA (as described above), unless you and your
spouse consent to waive this right.
IRAs, non-ERISA 403(b) Annuities, and 457 Plans. Spousal consent to a
distribution is not required. Upon your death, any death benefit will be paid to
your designated beneficiary.
ADDITIONAL INFORMATION
For additional information about federal tax law requirements applicable to tax
favored plans, see the "IRA Disclosure Statement" on page 50.
45
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
9:
OTHER
INFORMATION
- --------------------------------------------------------------------------------
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Pruco Life Insurance Company of New Jersey (Pruco Life of New Jersey) is a stock
life insurance company organized in 1982 under the laws of the State of New
Jersey. It is licensed to sell life insurance and annuities in New Jersey and
New York, and accordingly is subject to the laws of each of those states.
Pruco Life of New Jersey is an indirect, wholly-owned subsidiary of The
Prudential Insurance Company of America (Prudential), a New Jersey stock life
insurance company doing business since 1875. Prudential is an indirect
wholly-owned subsidiary of Prudential Financial, Inc. (Prudential Financial), a
New Jersey insurance holding company. As Pruco Life of New Jersey's ultimate
parent, Prudential Financial exercises significant influence over the operations
and capital structure of Pruco Life of New Jersey and Prudential. However,
neither Prudential Financial, Prudential, nor any other related company has any
legal responsibility to pay amounts that Pruco Life of New Jersey may owe under
the contract.
Pruco Life of New Jersey publishes annual and quarterly reports that are
filed with the SEC. These reports contain financial information about Pruco Life
of New Jersey that is annually audited by independent accountants. Pruco Life of
New Jersey's annual report for the year ended December 31, 2002, together with
subsequent periodic reports that Pruco Life of New Jersey files with the SEC,
are incorporated by reference into this prospectus. You can obtain copies, at no
cost, of any and all of this information, including the Pruco Life of New Jersey
annual report that is not ordinarily mailed to contractholders, the more current
reports and any subsequently filed documents at no cost by contacting us at the
address or telephone number listed on the cover. You may read and copy any
filings made by Pruco Life of New Jersey with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, Washington, D.C. 20549. You can obtain
information on the operation of the Public Reference Room by calling 1-
800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC at http://www.sec.gov.
THE SEPARATE ACCOUNT
We have established a separate account, the Pruco Life of New Jersey Flexible
Premium Variable Annuity Account (the "separate account"), to hold the assets
that are associated with the contracts. The separate account was established
under New Jersey law on May 20, 1996, and is registered with the U.S. Securities
and Exchange Commission under the Investment Company Act of 1940 as a unit
investment trust, which is a type of investment company. The assets of the
separate account are held in the name of Pruco Life of New Jersey and legally
belong to us. These assets are kept separate from all of our other assets and
may not be charged with liabilities arising out of any other business we may
conduct. More detailed information about Pruco Life of New Jersey, including its
audited financial statements, appears in the Statement of Additional
Information.
RISK FACTORS
There are various risks associated with the purchase of the market value
adjustment option that we summarize below.
ISSUER RISK. Your market value adjustment option is issued by Pruco Life of
New Jersey, and thus is backed by the financial strength of that company. If
Pruco Life of New Jersey were to experience significant financial adversity, it
is possible that Pruco Life of New Jersey's ability to pay interest and
principal under the market value adjustment option could be impaired.
RISKS RELATED TO CHANGING INTEREST RATES. You do not participate directly in
the investment experience of the bonds and other instruments that Pruco Life of
New Jersey holds to support the market value adjustment option. Nonetheless, the
market value adjustment formula (which is detailed in the appendix to this
prospectus) reflects the effect that prevailing interest rates have on those
bonds and other instruments. If you need to withdraw your money during a period
in which prevailing interest rates have risen above their level when you made
your purchase, you will experience a
46
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
"negative" market value adjustment. When we impose this market value adjustment,
it could result in the loss of both the interest you have earned and a portion
of your purchase payments. Thus, before you commit to a particular guarantee
period, you should consider carefully whether you have the ability to remain in
the contract throughout the guarantee period. In addition, we cannot, of course,
assure you that the market value adjustment option will perform better than
another investment that you might have made.
RISKS RELATED TO THE WITHDRAWAL CHARGE. We impose withdrawal charges under
the variable annuities that offer the market value adjustment option as a
companion option. If you anticipate needing to withdraw your money prior to the
end of a guarantee period, you should be prepared to pay the withdrawal charge
that we will impose.
SALE AND DISTRIBUTION OF THE CONTRACT
Prudential Investment Management Services LLC ("PIMS"), 100 Mulberry Street,
Newark, New Jersey 07102-4077, acts as the distributor of the contracts under a
"best efforts" underwriting agreement with Pruco Life of New Jersey under which
PIMS is reimbursed for its costs and expenses. PIMS is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. and is a limited liability corporation
organized under Delaware law in 1996. It is a registered broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc.
We pay the broker-dealer whose registered representatives sell the contract
either:
- - a commission of up to 8% of your purchase payments; or
- - a combination of a commission on purchase payments and a "trail"
commission -- which is a commission determined as a percentage of your
contract value that is paid periodically over the life of your contract.
The commission amount quoted above is the maximum amount which is paid. In most
circumstances, the registered representative who sold the contract will receive
significantly less.
From time to time, Prudential or its affiliates may offer and pay non-cash
compensation to registered representatives who sell the contract. For example,
Prudential or an affiliate may pay for a training and education meeting that is
attended by registered representatives of both Prudential-affiliated broker-
dealers and independent broker-dealers. Prudential and its affiliates retain
discretion as to which broker-dealers to offer non-cash (and cash) compensation
arrangements, and will comply with NASD rules and other pertinent laws in making
such offers and payments. Our payment of cash or non-cash compensation in
connection with sales of the contract does not result directly in any additional
charge to you.
ASSIGNMENT
You can assign the contract at any time during your lifetime. If you do so, we
will reset the death benefit to equal the contract value on the date the
assignment occurs. For details, see "What is the Death Benefit," on page 30. We
will not be bound by the assignment until we receive written notice. We will not
be liable for any payment or other action we take in accordance with the
contract if that action occurs before we receive notice of the assignment. An
assignment, like any other change in ownership, may trigger a taxable event.
If the contract is issued under a qualified plan, there may be limitations on
your ability to assign the contract. For further information please speak to
your representative.
FINANCIAL STATEMENTS
The financial statements of the separate account associated with Strategic
Partners Annuity One are included in the Statement of Additional Information.
STATEMENT OF ADDITIONAL INFORMATION
Contents:
- - Company
- - Experts
- - Litigation
- - Principal Underwriter
47
9:
OTHER INFORMATION CONTINUED
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
- - Determination of Accumulation Unit Values
- - Performance Information
- - Comparative Performance Information and Advertising
- - Federal Tax Status
- - Directors and Officers
- - Financial Statements
HOUSEHOLDING
To reduce costs, we now send only a single copy of prospectuses and shareholder
reports to each consenting household, in lieu of sending a copy to each
contractholder that resides in the household. If you are a member of such a
household, you should be aware that you can revoke your consent to householding
at any time, and begin to receive your own copy of prospectuses and shareholder
reports, by calling 1-877-778-5008.
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
MARKET-VALUE
ADJUSTMENT FORMULA
- --------------------------------------------------------------------------------
MARKET-VALUE ADJUSTMENT FORMULA
The general formula under which Pruco Life of New Jersey calculates the market
value adjustment applicable to a full or partial surrender, annuitization, or
settlement under Strategic Partners Annuity One is set forth below. The market
value adjustment is expressed as a multiplier factor. That is, the Contract
Value after the market value adjustment ("MVA"), but before any surrender
charge, is as follows: Contract Value (after MVA) = Contract Value (before MVA)
X (1 + MVA). The MVA itself is calculated as follows:
1 + I
MVA = [(----------------)to the power of (N/12)] -1
1 + J + .0025
<Table>
where: I = the guaranteed credited interest rate
(annual effective) for the given
contract at the time of withdrawal or
annuitization or settlement.
J = the interpolated current credited
interest rate offered on new money at
the time of withdrawal,
annuitization, or settlement. (See
below for the interpolation formula)
N = equals the remaining number of months
in the contract's current guarantee
period (rounded up) at the time of
withdrawal or annuitization or
settlement.
</Table>
The MVA formula with respect to contracts issued in New York is what is depicted
above. The formula uses an interpolated rate "J" as the current credited
interest rate. Specifically, "J" is the interpolated current credited interest
rate offered on new money at the time of withdrawal, annuitization, or
settlement. The interpolated value is calculated using the following formula:
m/365 X (n + 1) year rate + (365 - m)/365 X n year rate,
where "n" equals the number of whole years remaining in the Contract's current
guarantee period, and "m" equals the number of days remaining in year "n" of the
current guarantee period.
MARKET VALUE ADJUSTMENT EXAMPLE
The following will illustrate the application of the Market Value Adjustment.
For simplicity, surrender charges are ignored in this example.
Positive market value adjustment
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2002. At the time, the Contract
Value will have accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
- - On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
period of 3 years (the number of whole years remaining) is 4%, and for a
guarantee period of 4 years (the number of whole years remaining plus 1) is
5%.
The following computations would be made:
1) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = [(61/365) X 0.05] + [((365-61)/365) X 0.04] =
0.0417
</Table>
The MVA factor calculation would be: [(1.06)/(1.0417 + 0.0025)] to the
(38/12) power-1 = 0.04902
2) Multiply the Contract Value by the factor calculated in Step 1.
$11,127.11 X 0.04902 = $545.45
3) Add together the Market Value Adjustment and the Contract Value to get the
total Contract Surrender Value.
$11,127.11 + $545.45 = $11,672.56
The MVA may not always be positive. Here is an example where it is negative.
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2002. At the time, the Contract
Value will have accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
- - On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
period of 3 years (the number
49
MARKET-VALUE ADJUSTMENT FORMULA CONTINUED
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
of whole years remaining) is 7%, and for a guarantee period of 4 years (the
number of whole years remaining plus 1) is 8%.
The following computations would be made:
1) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = [(61/365) X 0.08] + [((365 - 61)/365) X 0.07] =
0.0717
</Table>
The MVA factor calculation would be: [(1.06)/(1.0717 + 0.0025)] to the
(38/12) power-1 = -0.04098
2) Multiply the Contract Value by the factor calculated in Step 1.
$11,127.11 X (-0.04098) = -$455.99
3) Add together the Market Value Adjustment and the Contract Value to get the
total Contract Surrender Value.
$11,127.11 + (-$455.99) = $10,671.12
50
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
IRA DISCLOSURE STATEMENT
- --------------------------------------------------------------------------------
This statement is designed to help you understand the requirements of federal
tax law which apply to your individual retirement annuity (IRA), your Roth IRA,
your simplified employee pension IRA (SEP) for employer contributions, your
Savings Incentive Match Plan for Employees (SIMPLE) IRA, or to one you purchase
for your spouse. You can obtain more information regarding your IRA either from
your sales representative or from any district office of the Internal Revenue
Service. Those are federal tax law rules; state tax laws may vary.
FREE LOOK PERIOD
The annuity contract offered by this prospectus gives you the opportunity to
return the contract for a full refund (less any applicable federal and state
income tax withholding) within 10 days (or whatever period is required by
applicable state law) after it is delivered. This is a more liberal provision
than is required in connection with IRAs. To exercise this "free-look"
provision, return the contract to the representative who sold it you or to the
Prudential Annuity Service Center at the address shown on the first page of this
prospectus.
ELIGIBILITY REQUIREMENTS
IRAs are intended for all persons with earned compensation whether or not they
are covered under other retirement programs. Additionally, if you have a
non-working spouse (and you file a joint tax return), you may establish an IRA
on behalf of your non-working spouse. A working spouse may establish his or her
own IRA. A divorced spouse receiving taxable alimony (and no other income) may
also establish an IRA.
CONTRIBUTIONS AND DEDUCTIONS
Contributions to your IRA will be deductible if you are not an "active
participant" in an employer maintained qualified retirement plan or you have
"Adjusted Gross Income" (as defined under Federal tax laws) which does not
exceed the "applicable dollar limit." IRA (or SEP) contributions must be made by
no later than the due date for filing your income tax return for that year,
excluding extensions (generally by April 15th). For a single taxpayer, the
applicable dollar limitation is $40,000 in 2003, with the amount of IRA
contribution which may be deducted reduced proportionately for Adjusted Gross
Income between $40,000-$50,000. For married couples filing jointly, the
applicable dollar limitation is $60,000, with the amount of IRA contribution
which may be deducted reduced proportionately between $60,000-$70,000. There is
no deduction allowed for IRA contributions when Adjusted Gross Income reaches
$50,000 for individuals and $70,000 for married couples filing jointly. Income
limits are scheduled to increase until 2006 for single taxpayers and 2007 for
married taxpayers.
Contributions made by your employer to your SEP are excludable from your
gross income for tax purposes in the calendar year for which the amount is
contributed. Certain employees who participate in a SEP will be entitled to
elect to have their employer make contributions to their SEP on their behalf or
to receive the contributions in cash. If the employee elects to have
contributions made on the employee's behalf to the SEP, those funds are not
treated as current taxable income to the employee. Elective deferrals under a
SEP are limited to $12,000 in 2003, with a permitted catch-up contribution of
$2,000 for individuals age 50 and above. Contribution limits and catch-up
contribution limits are scheduled to increase through 2006 and are indexed for
inflation thereafter. Salary-reduction SEPs (also called "SARSEPs") are
available only if at least 50% of the employees elect to have amounts
contributed to the SARSEP and if the employer has 25 or fewer employees at all
times during the preceding year. New SARSEPs may not be established after 1996.
The IRA maximum annual contribution is limited to the lesser of: (1) the
maximum amount allowed by law, including catch-up contributions if applicable,
or (2) 100% of your earned compensation. Contributions in excess of these limits
may be subject to penalty. See below.
Under a SEP agreement, the maximum annual contribution which your employer
may make on your behalf to a SEP contract that is excludable from your income is
the lesser of 25% of your salary or $40,000. An employee who is a participant in
a SEP agreement
51
IRA DISCLOSURE STATEMENT CONTINUED
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
may make after-tax contributions to the SEP contract, subject to the
contribution limits applicable to IRAs in general. Those employee contributions
will be deductible subject to the deductibility rules described above.
The maximum tax deductible annual contribution that a divorced spouse with no
other income may make to an IRA is the lesser of (1) the maximum amount allowed
by law, including catch-up contributions if applicable or (2) 100% of taxable
alimony.
If you or your employer should contribute more than the maximum contribution
amount to your IRA or SEP, the excess amount will be considered an "excess
contribution." You are permitted to withdraw an excess contribution from your
IRA or SEP before your tax filing date without adverse tax consequences. If,
however, you fail to withdraw any such excess contribution before your tax
filing date, a 6% excise tax will be imposed on the excess for the tax year of
contribution.
Once the 6% excise tax has been imposed, an additional 6% penalty for the
following tax year can be avoided if the excess is (1) withdrawn before the end
of the following year, or (2) treated as a current contribution for the
following year. (See Premature Distributions below for penalties imposed on
withdrawal when the contribution exceeds the maximum amount allowed by law,
including catch-up contributions if applicable.)
IRA FOR NON-WORKING SPOUSE
If you establish an IRA for yourself, you may also be eligible to establish an
IRA for your "non-working" spouse. In order to be eligible to establish such a
spousal IRA, you must file a joint tax return with your spouse and, if your
non-working spouse has compensation, his/her compensation must be less than your
compensation for the year. Contributions of up to the maximum amount allowed by
law, including catch-up contributions if applicable, may be made to your IRA and
the spousal IRA if the combined compensation of you and your spouse is at least
equal to the amount contributed. If requirements for deductibility (including
income levels) are met, you will be able to deduct an amount equal to the least
of (i) the amount contributed to the IRAs; (ii) twice the maximum amount allowed
by law, including catch-up contributions if applicable; or (iii) 100% of your
combined gross income.
Contributions in excess of the contribution limits may be subject to penalty.
See page 50 under "Contributions and Deductions." If you contribute more than
the allowable amount, the excess portion will be considered an excess
contribution. The rules for correcting it are the same as discussed above for
regular IRAs.
Other than the items mentioned in this section, all of the requirements
generally applicable to IRAs are also applicable to IRAs established for
non-working spouses.
ROLLOVER CONTRIBUTION
Once every year, you are permitted to withdraw any portion of the value of your
IRA or SEP and reinvest it in another IRA or bond. Withdrawals may also be made
from other IRAs and contributed to this contract. This transfer of funds from
one IRA to another is called a "rollover" IRA. To qualify as a rollover
contribution, the entire portion of the withdrawal must be reinvested in another
IRA within 60 days after the date it is received. You will not be allowed a
tax-deduction for the amount of any rollover contribution.
A similar type of rollover to an IRA can be made with the proceeds of a
qualified distribution from a qualified retirement plan or tax-sheltered
annuity. Properly made, such a distribution will not be taxable until you
receive payments from the IRA created with it. You may later roll over such a
contribution to another qualified retirement plan. (You may roll less than all
of a qualified distribution into an IRA, but any part of it not rolled over will
be currently includable in your income without any capital gains treatment.)
Funds can also be rolled over from an IRA or SEP to another IRA or SEP or to
another qualified retirement plan or 457 government plan.
DISTRIBUTIONS
(a) PREMATURE DISTRIBUTIONS
At no time can your interest in your IRA or SEP be forfeited. To insure that
your contributions will be used for retirement, the federal tax law does not
permit you
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
to use your IRA or SEP as security for a loan. Furthermore, as a general rule,
you may not sell or assign your interest in your IRA or SEP to anyone. Use of an
IRA (or SEP) as security or assignment of it to another will invalidate the
entire annuity. It then will be includable in your income in the year it is
invalidated and will be subject to a 10% tax penalty if you are not at least age
59 1/2 or totally disabled. (You may, however, assign your IRA or SEP without
penalty to your former spouse in accordance with the terms of a divorce decree.)
You may surrender any portion of the value of your IRA (or SEP). In the case
of a partial surrender which does not qualify as a rollover, the amount
withdrawn will be includable in your income and subject to the 10% penalty if
you are not at least age 59 1/2 or totally disabled unless you comply with
special rules requiring distributions to be made at least annually over your
life expectancy.
The 10% tax penalty does not apply to the withdrawal of an excess
contribution as long as the excess is withdrawn before the due date of your tax
return. Withdrawals of excess contributions after the due date of your tax
return will generally be subject to the 10% penalty unless the excess
contribution results from erroneous information from a plan trustee making an
excess rollover contribution or unless you are over age 59 1/2 or are disabled.
(b) DISTRIBUTION AFTER AGE 59 1/2
Once you have attained age 59 1/2 (or have become totally disabled), you may
elect to receive a distribution of your IRA (or SEP) regardless of when you
actually retire. In addition, you must commence distributions from your IRA by
April 1 following the year you attain age 70 1/2. You may elect to receive the
distribution under any one of the periodic payment options available under the
contract. The distributions from your IRA under any one of the periodic payment
options or in one sum will be treated as ordinary income as you receive them to
the degree that you have made deductible contributions. If you have made both
deductible and nondeductible contributions, the portion of the distribution
attributable to the nondeductible contribution will be tax-free.
(c) INADEQUATE DISTRIBUTIONS--50% TAX
Your IRA or SEP is intended to provide retirement benefits over your lifetime.
Thus, federal tax law requires that you either (1) receive a lump-sum
distribution of your IRA by April 1 of the year following the year in which you
attain age 70 1/2 or (2) start to receive periodic payments by that date. If you
elect to receive periodic payments, those payments must be sufficient to pay out
the entire value of your IRA during your life expectancy (or over the joint life
expectancies of you and your spouse/beneficiary). The calculation method is
revised under the IRS regulations issued in April 2002 for distributions
beginning in 2003 and were optional for distribution in 2002. If the payments
are not sufficient to meet these requirements, an excise tax of 50% will be
imposed on the amount of any underpayment.
(d) DEATH BENEFITS
If you (or your surviving spouse) die before receiving the entire value of your
IRA (or SEP), the remaining interest must be distributed to your beneficiary (or
your surviving spouse's beneficiary) in one lump-sum by December 31st of the
fifth year after your (or your surviving spouse's) death, or applied to purchase
an immediate annuity for the beneficiary. This annuity must be payable over the
life expectancy of the beneficiary beginning by December 31st of the year
following the year after your or your spouse's death. If your spouse is the
designated beneficiary, he or she is treated as the owner of the IRA. If minimum
required distributions have begun, and no designated beneficiary is identified
by December 31st of the year following the year of death, the entire amount must
be distributed based on the life expectancy of the owner using the owner's age
prior to death. A distribution of the balance of your IRA upon your death will
not be considered a gift for federal tax purposes, but will be included in your
gross estate for purposes of federal estate taxes.
53
IRA DISCLOSURE STATEMENT CONTINUED
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PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
ROTH IRAS
Section 408A of the Code permits eligible individuals to contribute to a type of
IRA known as a "Roth IRA." Contributions may be made to a Roth IRA by taxpayers
with adjusted gross incomes of less than $160,000 for married individuals filing
jointly and less than $110,000 for single individuals. Married individuals
filing separately are not eligible to contribute to a Roth IRA. The maximum
amount of contributions allowable for any taxable year to all IRAs maintained by
an individual is generally the lesser of the maximum amount allowed by law and
100% of compensation for that year (the maximum amount allowed by law is phased
out for incomes between $150,000 and $160,000 for married and between $95,000
and $110,000 for singles). The contribution limit is reduced by the amount of
any contributions made to a traditional IRA. Contributions to a Roth IRA are not
deductible.
For taxpayers with adjusted gross income of $100,000 or less, all or part of
amounts in a traditional IRA may be converted, transferred or rolled over to a
Roth IRA. Some or all of the IRA value will typically be includable in the
taxpayer's gross income. Provided a rollover contribution meets the requirements
of IRAs under Section 408(d)(3) of the Code, a rollover may be made from a Roth
IRA to another Roth IRA.
UNDER SOME CIRCUMSTANCES, IT MAY NOT BE ADVISABLE TO ROLL OVER, TRANSFER OR
CONVERT ALL OR PART OF A TRADITIONAL IRA TO A ROTH IRA. PERSONS CONSIDERING A
ROLLOVER, TRANSFER OR CONVERSION SHOULD CONSULT THEIR OWN TAX ADVISOR.
"Qualified distributions" from a Roth IRA are excludable from gross income. A
"qualified distribution" is a distribution that satisfies two requirements: (1)
the distribution must be made (a) after the owner of the IRA attains age 59 1/2;
(b) after the owner's death; (c) due to the owner's disability; or (d) for a
qualified first time homebuyer distribution within the meaning of Section
72(t)(2)(F) of the Code; and (2) the distribution must be made in the year that
is at least five tax years after the first year for which a contribution was
made to any Roth IRA established for the owner or five years after a rollover,
transfer, or conversion was made from a traditional IRA to a Roth IRA.
Distributions from a Roth IRA that are not qualified distributions will be
treated as made first from contributions and then from earnings, and taxed
generally in the same manner as distributions from a traditional IRA.
Distributions from a Roth IRA need not commence at age 70 1/2. However, if
the owner dies before the entire interest in a Roth IRA is distributed, any
remaining interest in the contract must be distributed under the same rules
applied to traditional IRAs where death occurs before the required beginning
date.
REPORTING TO THE IRS
Beginning with Forms 5498 issued in January 2004, we will indicate to you and to
the IRS that your account is subject to minimum required distributions if you
were at least 70 1/2 at the end of the prior year.
Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions or 50% for underpayments),
you must file Form 5329 with the Internal Revenue Service. The form is to be
attached to your federal income tax return for the tax year in which the penalty
applies. Normal contributions and distributions must be shown on your income tax
return for the year to which they relate.
54
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
APPENDIX
ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
As we have indicated throughout this prospectus, the Strategic Partners Annuity
One Variable Annuity is a contract that allows you to select or decline any of
several features that carries with it a specific asset-based charge. We maintain
a unique unit value corresponding to each combination of such Contract features.
Here we depict the historical unit values corresponding to the contract features
bearing the highest and lowest combinations of asset-based charges during the
periods September 24, 2001 to December 31, 2001 and January 1, 2002 to December
31, 2002. During those periods, the highest combination of asset-based charges
amounted to 1.60%, and the lowest combination of asset-based charges amounted to
1.40%. Under the version of the contracts described in this prospectus, the
highest combinations of asset-based charges now amounts to 1.75%, while the
lowest combination of asset-based charges remains at 1.40%. In the Statement of
Additional Information, we set out historical unit values corresponding to the
other combinations of asset-based charges available during those prior periods.
You can obtain a copy of the Statement of Additional Information without charge,
by calling (888) PRU-2888 or by writing to us at Prudential Annuity Service
Center, P.O. Box 7960, Philadelphia, PA 19101.
55
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
<Table>
<Caption>
ACCUMULATION UNIT VALUES:
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (BASE DEATH BENEFIT 1.40)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
JENNISON PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54236 $0.65768 17,289
1/1/2002 to 12/31/2002 $0.65768
PRUDENTIAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002 $ $
PRUDENTIAL GLOBAL PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.59967 $0.71233 39,194
1/1/2002 to 12/31/2002 $0.71233
PRUDENTIAL MONEY MARKET PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.03702 $1.04061 113,402
1/1/2002 to 12/31/2002 $1.04061
PRUDENTIAL STOCK INDEX PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.69176 $0.79064 264,980
1/1/2002 to 12/31/2002 $0.79064
PRUDENTIAL VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002 $ $
SP AGGRESSIVE GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.64672 $0.75207 0
1/1/2002 to 12/31/2002 $0.75207
SP AIM AGGRESSIVE GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54732 $0.63765 10,365
1/1/2002 to 12/31/2002 $0.63765
SP AIM CORE EQUITY INCOME PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54178 $0.64005 14,982
1/1/2002 to 12/31/2002 $0.64005
SP ALLIANCE LARGE CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.60919 $0.71906 66,232
1/1/2002 to 12/31/2002 $0.71906
SP ALLIANCE TECHNOLOGY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.43439 $0.56163 2,183
1/1/2002 to 12/31/2002 $0.56163
SP BALANCED ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.82277 $0.91008 22,347
1/1/2002 to 12/31/2002 $0.91008
</Table>
* COMMENCEMENT OF BUSINESS THIS CHART CONTINUES ON THE NEXT PAGE
56
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (BASE DEATH BENEFIT 1.40)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
SP CONSERVATIVE ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.91719 $0.98804 203,977
1/1/2002 to 12/31/2002 $0.98804
SP DAVIS VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.77575 $0.89451 278,355
1/1/2002 to 12/31/2002 $0.89451
SP DEUTSCHE INTERNATIONAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.64820 $0.72585 68,974
1/1/2002 to 12/31/2002 $0.72585
SP GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.72844 $0.82679 64,201
1/1/2002 to 12/31/2002 $0.82679
SP INVESCO SMALL COMPANY GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54633 $0.68188 70,633
1/1/2002 to 12/31/2002 $0.68188
SP JENNISON INTERNATIONAL GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.48213 $0.53757 115,055
1/1/2002 to 12/31/2002 $0.53757
SP LARGE CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.84297 $0.94081 155,729
1/1/2002 to 12/31/2002 $0.94081
SP MFS CAPITAL OPPORTUNITIES PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.57978 $0.69040 2,396
1/1/2002 to 12/31/2002 $0.69040
SP MID CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.60415 $0.75936 14,528
1/1/2002 to 12/31/2002 $0.75936
SP PIMCO HIGH YIELD PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.00341 $1.04100 52,379
1/1/2002 to 12/31/2002 $1.04100
SP PIMCO TOTAL RETURN PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.12213 $1.12247 337,616
1/1/2002 to 12/31/2002 $1.12247
SP PRUDENTIAL US EMERGING GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.55673 $0.67759 127,630
1/1/2002 to 12/31/2002 $0.67759
</Table>
* COMMENCEMENT OF BUSINESS THIS CHART CONTINUES ON THE NEXT PAGE
57
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (BASE DEATH BENEFIT 1.40)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
SP SMALL/MID CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.94433 $1.12776 118,985
1/1/2002 to 12/31/2002 $1.12776
SP STRATEGIC PARTNERS FOCUSED GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.56746 $0.66171 103,999
1/1/2002 to 12/31/2002 $0.66171
JANUS ASPEN SERIES--GROWTH PORTFOLIO SERVICE SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.53146 $0.61510 39,883
1/1/2002 to 12/31/2002 $0.61510
</Table>
* COMMENCEMENT OF BUSINESS
58
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES:
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (GMDB STEP-UP 1.60)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
JENNISON PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54132 $0.65613 21,838
1/1/2002 to 12/31/2002 $0.65613
PRUDENTIAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002 $ $
PRUDENTIAL GLOBAL PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.59848 $0.71047 60,169
1/1/2002 to 12/31/2002 $0.71047
PRUDENTIAL MONEY MARKET PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.03505 $1.03811 298,500
1/1/2002 to 12/31/2002 $1.03811
PRUDENTIAL STOCK INDEX PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.69027 $0.78853 225,427
1/1/2002 to 12/31/2002 $0.78853
PRUDENTIAL VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002 $ $
SP AGGRESSIVE GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.64539 $0.75015 0
1/1/2002 to 12/31/2002 $0.75015
SP AIM AGGRESSIVE GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54622 $0.63604 40,490
1/1/2002 to 12/31/2002 $0.63604
SP AIM CORE EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54069 $0.63843 39,995
1/1/2002 to 12/31/2002 $0.63843
SP ALLIANCE LARGE CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.60796 $0.71726 86,888
1/1/2002 to 12/31/2002 $0.71726
SP ALLIANCE TECHNOLOGY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.43357 $0.56029 40,365
1/1/2002 to 12/31/2002 $0.56029
SP BALANCED ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.82123 $0.90789 68,280
1/1/2002 to 12/31/2002 $0.90789
</Table>
* COMMENCEMENT OF BUSINESS THIS CHART CONTINUES ON THE NEXT PAGE
59
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (GMDB STEP-UP 1.60)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
SP CONSERVATIVE ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.91564 $0.98589 403,833
1/1/2002 to 12/31/2002 $0.98589
SP DAVIS VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.77429 $0.89231 363,816
1/1/2002 to 12/31/2002 $0.89231
SP DEUTSCHE INTERNATIONAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.64692 $0.72410 100,007
1/1/2002 to 12/31/2002 $0.72410
SP GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.72697 $0.82464 124,984
1/1/2002 to 12/31/2002 $0.82464
SP INVESCO SMALL COMPANY GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.54523 $0.68010 32,857
1/1/2002 to 12/31/2002 $0.68010
SP JENNISON INTERNATIONAL GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.48111 $0.53612 96,107
1/1/2002 to 12/31/2002 $0.53612
SP LARGE CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.84130 $0.93845 207,057
1/1/2002 to 12/31/2002 $0.93845
SP MFS CAPITAL OPPORTUNITIES PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.57869 $0.68879 36,380
1/1/2002 to 12/31/2002 $0.68879
SP MID CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.60297 $0.75748 119,204
1/1/2002 to 12/31/2002 $0.75748
SP PIMCO HIGH YIELD PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.00162 $1.03861 132,714
1/1/2002 to 12/31/2002 $1.03861
SP PIMCO TOTAL RETURN PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.11989 $1.11959 610,106
1/1/2002 to 12/31/2002 $1.11959
SP PRUDENTIAL US EMERGING GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.55569 $0.67599 106,297
1/1/2002 to 12/31/2002 $0.67599
</Table>
* COMMENCEMENT OF BUSINESS THIS CHART CONTINUES ON THE NEXT PAGE
60
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS ANNUITY ONE PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (GMDB STEP-UP 1.60)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
SP SMALL/MID CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.94250 $1.12495 229,314
1/1/2002 to 12/31/2002 $1.12495
SP STRATEGIC PARTNERS FOCUSED GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.56634 $0.66006 116,783
1/1/2002 to 12/31/2002 $0.66006
JANUS ASPEN SERIES--GROWTH PORTFOLIO SERVICE SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.67664 $0.61352 71,266
1/1/2002 to 12/31/2002 $0.61352
</Table>
* COMMENCEMENT OF BUSINESS
61
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PART III PROSPECTUSES
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
This page intentionally left blank
STRATEGIC PARTNERS(SM)
PLUS
VARIABLE ANNUITY
- --------------------------------------------------------------------------------
PROSPECTUS: MAY 1, 2003
THIS PROSPECTUS DESCRIBES AN INDIVIDUAL VARIABLE ANNUITY CONTRACT OFFERED BY
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY (PRUCO LIFE OF NEW JERSEY). PRUCO
LIFE OF NEW JERSEY IS AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA.
THE FUNDS
- ------------------------------------------------------------
Strategic Partners Plus offers a wide variety of investment choices, including
40 variable investment options that invest in mutual funds managed by these
leading asset managers:
PRUDENTIAL INVESTMENTS LLC
JENNISON ASSOCIATES LLC
A I M CAPITAL MANAGEMENT, INC.
ALLIANCE CAPITAL MANAGEMENT, L.P.
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED
CALAMOS ASSET MANAGEMENT, INC.
DAVIS ADVISORS
DEUTSCHE ASSET MANAGEMENT INVESTMENT
SERVICES LIMITED
EARNEST PARTNERS LLC
EVERGREEN INVESTMENT MANAGEMENT COMPANY
FIDELITY MANAGEMENT & RESEARCH COMPANY
FURMAN SELZ CAPITAL MANAGEMENT LLC
GE ASSET MANAGEMENT, INCORPORATED
INVESCO FUNDS GROUP, INC.
JANUS CAPITAL MANAGEMENT LLC
LORD, ABBETT & CO. LLC
MASSACHUSETTS FINANCIAL SERVICES COMPANY (MFS)
NATIONAL CITY INVESTMENT MANAGEMENT COMPANY
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC (PIMCO)
SALOMON BROTHERS ASSET MANAGEMENT INC.
WELLINGTON MANAGEMENT COMPANY LLP
You may choose between two basic versions of Strategic Partners Plus. One
version, the Contract With Credit, provides for a bonus credit that we add to
each purchase payment you make. If you choose this version of Strategic Partners
Plus, some charges and expenses may be higher than if you choose the version
without the credit. Those higher charges could exceed the amount of the credit
under some circumstances,
particularly if you withdraw purchase payments within a few years of making
those purchase payments.
PLEASE READ THIS PROSPECTUS
- ------------------------------------------------------------
Please read this prospectus before purchasing a Strategic Partners Plus variable
annuity contract, and keep it for future reference. Current prospectuses for the
underlying mutual funds accompany this prospectus. These prospectuses contain
important information about the mutual funds. Please read these prospectuses and
keep them for reference as well.
TO LEARN MORE ABOUT STRATEGIC PARTNERS PLUS
- ------------------------------------------------------------
To learn more about the Strategic Partners Plus variable annuity, you can
request a copy of the Statement of Additional Information (SAI) dated May 1,
2003. The SAI has been filed with the Securities and Exchange Commission (SEC)
and is legally a part of this prospectus. Pruco Life of New Jersey also files
other reports with the SEC. All of these filings can be reviewed and copied at
the SEC's offices, and can also be obtained from the SEC's Public Reference
Section, 450 5th Street N.W., Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC at (800)
SEC-0330. The SEC maintains a Web site (http://www.sec.gov) that contains the
Strategic Partners Plus SAI, material incorporated by reference, and other
information regarding registrants that file electronically with the SEC. The
Table of Contents of the SAI is on Page 47 of this prospectus.
FOR A FREE COPY OF THE SAI CALL US AT:
- ------------------------------------------------------------
- - (888) PRU-2888 or write to us at:
- - Prudential Annuity Service Center
P.O. Box 7960
Philadelphia, PA 19101
THE SEC HAS NOT DETERMINED THAT THIS CONTRACT IS A GOOD INVESTMENT, NOR HAS THE
SEC DETERMINED THAT THIS PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL
OFFENSE TO STATE OTHERWISE. INVESTMENT IN A VARIABLE ANNUITY CONTRACT IS SUBJECT
TO RISK, INCLUDING THE POSSIBLE LOSS OF YOUR MONEY. AN INVESTMENT IN STRATEGIC
PARTNERS PLUS IS NOT A BANK DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
CONTENTS
- --------------------------------------------------------------------------------
<Table>
PART I: STRATEGIC PARTNERS PLUS PROSPECTUS
-------------------------------------------------
SUMMARY
-------
Glossary........................................... 6
Summary............................................ 9
Summary of Contract Expenses....................... 13
Expense Examples................................... 15
PART II: STRATEGIC PARTNERS PLUS PROSPECTUS
------------------------------------------------------------
SECTIONS 1-9
------------------------------------------------------------
Section 1: What is the Strategic Partners Plus Variable
Annuity?.............................................. 21
Short Term Cancellation Right or "Free Look"....... 22
Section 2: What Investment Options Can I Choose?........ 23
Variable Investment Options........................ 23
Fixed Interest Rate Options........................ 24
Market Value Adjustment Option..................... 25
Transfers Among Options............................ 27
Other Available Features........................... 27
Voting Rights...................................... 28
Substitution....................................... 28
Section 3: What Kind of Payments Will I Receive During
the Income Phase? (Annuitization)..................... 29
Option 1: Annuity Payments for a Fixed Period...... 29
Option 2: Life Income Annuity Option............... 29
Other Annuity Options.............................. 29
Tax Considerations................................. 29
Section 4: What is the Death Benefit?................... 30
Beneficiary........................................ 30
Calculation of the Death Benefit................... 30
Guaranteed Minimum Death Benefit................... 30
Special Rules If Joint Owners...................... 31
Payout Options..................................... 31
Spousal Continuance Benefit........................ 31
Section 5: How Can I Purchase a Strategic Partners Plus
Contract?............................................. 33
Purchase Payments.................................. 33
Allocation of Purchase Payments.................... 33
Credits............................................ 33
Calculating Contract Value......................... 34
Section 6: What are the Expenses Associated with the
Strategic Partners Plus Contract?..................... 35
Insurance and Administrative Cost.................. 35
Contract Maintenance Charge........................ 35
Withdrawal Charge.................................. 35
Taxes Attributable to Premium...................... 36
Transfer Fee....................................... 37
Company Taxes...................................... 37
</Table>
2
- --------------------------------------------------------------------------------
<Table>
Section 7: How Can I Access My Money?................... 38
Withdrawals During the Accumulation Phase.......... 38
Automated Withdrawals.............................. 38
Suspension of Payments or Transfers................ 38
Section 8: What are the Tax Considerations Associated
with the Strategic Partners Plus Contract?............ 40
Contracts Owned by Individuals (Not Associated with
Tax-Favored Retirement Plans).................... 40
Contracts Held by Tax-Favored Plans................ 42
Section 9: Other Information............................ 46
Pruco Life Insurance Company of New Jersey......... 46
The Separate Account............................... 46
Risk Factors....................................... 46
Sale and Distribution of the Contract.............. 46
Assignment......................................... 47
Financial Statements............................... 47
Statement of Additional Information................ 47
Householding....................................... 47
Market Value Adjustment Formula.................... 48
IRA Disclosure Statement........................... 50
Appendix................................................ 54
Accumulation Unit Values........................... 54
</Table>
<Table>
PART III: PROSPECTUSES
----------------------
VARIABLE INVESTMENT OPTIONS
---------------------------
THE PRUDENTIAL SERIES FUND, INC.
EVERGREEN VARIABLE ANNUITY TRUST
JANUS ASPEN SERIES
</Table>
3
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4
PART I SUMMARY
- --------------------------------------------------------------------------------
STRATEGIC PARTNERS PLUS PROSPECTUS
5
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
GLOSSARY
- --------------------------------------------------------------------------------
WE HAVE TRIED TO MAKE THIS PROSPECTUS AS EASY TO READ AND UNDERSTAND AS
POSSIBLE. BY THE NATURE OF THE CONTRACT, HOWEVER, CERTAIN TECHNICAL WORDS OR
TERMS ARE UNAVOIDABLE. WE HAVE IDENTIFIED THE FOLLOWING AS SOME OF THESE WORDS
OR TERMS.
ACCUMULATION PHASE
The period that begins with the contract date (which we define below) and ends
when you start receiving income payments, or earlier if the contract is
terminated through a full withdrawal or payment of a death benefit.
ADJUSTED CONTRACT VALUE
When you begin receiving income payments, the value of your contract minus any
charge we impose for any type of tax based on the amount of purchase payments.
ANNUITANT
The person whose life determines the amount of income payments that we will pay.
ANNUITY DATE
The date when income payments are scheduled to begin.
BENEFICIARY
The person(s) or entity you have chosen to receive a death benefit.
CONTRACT DATE
The date on which we credit your initial purchase payment. We will credit the
initial purchase payment to your contract within two business days from the day
on which we receive your payment and all necessary paperwork in good order at
the Prudential Annuity Service Center. Contract anniversaries are measured from
the contract date. A contract year starts on the contract date or on a contract
anniversary.
CONTRACT OWNER, OWNER, OR YOU
The person entitled to the ownership rights under the contract.
CONTRACT VALUE
This is the total value of your contract, equal to the sum of the values of your
investment in each investment option you have chosen. Your contract value will
go up or down based on the performance of the investment options you choose.
CONTRACT WITH CREDIT
A version of the annuity contract that provides for a bonus credit with each
purchase payment that you make and has different withdrawal charges and
insurance and administrative costs than the Contract Without Credit.
CONTRACT WITHOUT CREDIT
A version of the annuity contract that does not provide a credit and has
different withdrawal charges and insurance and administrative costs than the
Contract With Credit.
CREDIT
If you choose the Contract With Credit, this is the bonus amount that we
allocate to your account each time you make a purchase payment. The amount of
the credit is a percentage of the purchase payment. Bonus credits generally are
not recaptured once the free look period expires. Our reference in the preceding
sentence to "generally are not recaptured" refers to the fact that we have the
contractual right to deduct, from the death benefit we pay, the amount of any
credit corresponding to a purchase payment made within one year of death.
DEATH BENEFIT
If the sole owner dies, or if jointly owned, the first to die of the owner or
joint owner, the beneficiary you designate will receive, at a minimum, the total
amount invested, reduced by withdrawals or a potentially greater amount related
to market appreciation. The guaranteed minimum death benefit is available for an
additional charge.
DOLLAR COST AVERAGING FIXED RATE OPTION (DCA FIXED RATE OPTION)
An investment option that offers a fixed rate of interest for a selected period
during which periodic transfers are automatically made to selected variable
investment
6
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
options or to the one-year fixed rate option. We guarantee your money will earn
at least 3% while it is allocated to this option. Payments you allocate to the
DCA Fixed Rate Option become part of Pruco Life of New Jersey's general assets
until they are transferred.
FIXED INTEREST RATE OPTIONS
Investment options that offer a fixed rate of interest for either a one-year
period (fixed rate option) or a selected period during which periodic transfers
are made to selected variable investment options or to the one-year fixed rate
option (dollar cost averaging fixed rate option).
GMDB PROTECTED VALUE
The guaranteed amount of the guaranteed minimum death benefit, which may equal
the GMDB step-up value. The protected value will be subject to certain age
restrictions and time durations, however it will still increase by subsequent
invested purchase payments and reduce by withdrawals.
GMDB STEP-UP
We may use the GMDB step-up value to compute the GMDB protected value of the
guaranteed minimum death benefit.
If the sole owner or the older of the owner and joint owner is less than
age 80 on the contract date, the GMDB step-up before the first contract
anniversary is the initial invested purchase payment increased by subsequent
invested purchase payments and reduced by the effect of withdrawals. The GMDB
step-up on each contract anniversary will be the greater of the previous GMDB
step-up and the contract value as of such contract anniversary. Between contract
anniversaries, the GMDB step-up will be increased by invested purchase payments
and reduced by the effect of withdrawals.
If the sole owner or the older of the owner and joint owner is between age
80 and 85 on the contract date, the GMDB step-up before the third contract
anniversary is the sum of invested purchase payments, reduced by the effect of
withdrawals. On the third contract anniversary the GMDB step-up will be adjusted
to the greater of the then current GMDB step-up or the contract value as of that
contract anniversary.
GOOD ORDER
An instruction received at the Prudential Annuity Service Center, utilizing such
forms, signatures and dating as we require, which is sufficiently clear that we
do not need to exercise any discretion to follow such instructions.
GUARANTEED MINIMUM DEATH BENEFIT (GMDB)
An optional feature available for an additional charge, which guarantees that
the death benefit that the beneficiary receives will be no less than a certain
GMDB protected value.
GUARANTEE PERIOD
A period of time during which your invested purchase payment in the market value
adjustment option earns interest at the declared rate. We have the right to
offer one or more of several guarantee periods equal to any or all of the
following: 1 year (currently available only as a renewal option), 2 years, 3
years, 4 years, 5 years, 6 years, 7 years, 8 years, 9 years, and 10 years.
INCOME OPTIONS
Options under the contract that define the frequency and duration of income
payments. In your contract, we also refer to these as payout or annuity options.
INCOME PHASE
The period in which you receive income payments under the contract.
INVESTED PURCHASE PAYMENTS
Your purchase payments less any deduction we make for any tax charge.
JOINT OWNER
The person named as the joint owner, who shares ownership rights with the owner
as defined in the contract. A joint owner may be the owner's spouse, but need
not be.
MARKET VALUE ADJUSTMENT OPTION
Under both the Contract With Credit and the Contract Without Credit, an
investment option that offers guarantee periods from one to ten years in length,
and pays a fixed
7
GLOSSARY CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
rate of interest with respect to each guarantee period. We impose a market value
adjustment on withdrawals or transfers that you make from this option prior to
the end of a guarantee period.
NET PURCHASE PAYMENTS
Your total purchase payments less any withdrawals you have made.
PRUDENTIAL ANNUITY SERVICE CENTER
For general correspondence: P.O. Box 7960, Philadelphia, PA 19101. For express
overnight mail: 2101 Welsh Road, Dresher, PA 19025. The telephone number is
888-PRU-2888. Prudential's Web site is www.prudential.com.
PURCHASE PAYMENTS
The amount of money you pay us to purchase the contract. With some restrictions,
you can make additional purchase payments at any time during the accumulation
phase.
SEPARATE ACCOUNT
We hold your purchase payments allocated to the variable investment options in a
separate account called the Pruco Life of New Jersey Flexible Premium Variable
Annuity Account. The separate account is set apart from all of the general
assets of Pruco Life of New Jersey.
STATEMENT OF ADDITIONAL INFORMATION
A document containing certain additional information about the Strategic
Partners Plus variable annuity. We have filed the Statement of Additional
Information with the Securities and Exchange Commission and it is legally a part
of this prospectus. To learn how to obtain a copy of the Statement of Additional
Information, see the front cover of this prospectus.
TAX DEFERRAL
This is a way to increase your assets without currently being taxed. Generally,
you do not pay taxes on your contract earnings until you take money out of your
contract. You should be aware that tax favored plans (such as IRAs) already
provide tax deferral regardless of whether they invest in annuity contracts. See
"What Are the Tax Considerations Associated with the Strategic Partners Plus
Contract," on page 40.
VARIABLE INVESTMENT OPTION
When you choose a variable investment option, we purchase shares of the mutual
fund which are held as an investment for that option. We hold these shares in
the separate account. The division of the separate account of Pruco Life of New
Jersey that invests in a particular mutual fund is referred to in your contract
as a subaccount.
8
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
SUMMARY FOR SECTIONS 1-9
- --------------------------------------------------------------------------------
FOR A MORE COMPLETE DISCUSSION OF THE FOLLOWING TOPICS, SEE THE CORRESPONDING
SECTION IN PART II OF THE PROSPECTUS.
SECTION 1
WHAT IS THE STRATEGIC PARTNERS PLUS VARIABLE ANNUITY?
The Strategic Partners Plus variable annuity is a contract between you, the
owner, and us, the insurance company, Pruco Life Insurance Company of New Jersey
(Pruco Life of New Jersey, we or us). The contract allows you to invest on a
tax-deferred basis in one or more of 40 variable investment options, two fixed
interest rate options and the market value adjustment option. The contract is
intended for retirement savings or other long-term investment purposes and
provides for a death benefit.
There are two basic versions of the Strategic Partners Plus variable annuity.
Contract With Credit.
- - provides for a bonus credit that we add to each purchase payment that you
make,
- - has higher withdrawal charges and insurance and administrative costs than the
Contract Without Credit,
- - may provide lower interest rates for fixed rate options than the Contract
Without Credit,
- - does not provide the market value adjustment option.
Contract Without Credit.
- - does not provide a credit,
- - has lower withdrawal charges and insurance and administrative costs than the
Contract With Credit.
- - may provide higher interest rates for fixed rate options than the Contract
With Credit,
- - provides the market value adjustment option.
The variable investment options available under the contract offer the
opportunity for a favorable return. However, this is NOT guaranteed. It is
possible, due to market changes, that your investments may decrease in value.
The fixed interest rate options offer a guaranteed interest rate. While your
money is allocated to one of these options, your principal amount will not
decrease and we guarantee that your money will earn at least a minimum interest
rate annually. Under the market value adjustment option, while your money
remains in the contract for the full guarantee period, your principal amount is
guaranteed and the interest amount that your money will earn is guaranteed by us
to always be at least 3%.
Payments allocated to the fixed interest rate options became part of Pruco
Life of New Jersey's general assets. Payments allocated to the market value
adjustment option are held as a separate pool of assets, but the income, gains
or losses experienced by these assets are not directly credited or charged
against the contracts. As a result, the strength of our guarantees under these
options is based on the overall financial strength of Pruco Life of New Jersey.
You can invest your money in any or all of the variable investment options,
the fixed interest rate options and one of more guarantee periods available
under the market value adjustment option. You may make up to 12 free transfers
each contract year among the variable investment options. Certain restrictions
apply to transfers involving the fixed interest rate options.
The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase.
- - During the accumulation phase, any earnings grow on a tax-deferred basis and
are generally only taxed as income when you make a withdrawal.
- - The income phase starts when you begin receiving regular payments from your
contract.
The amount of money you are able to accumulate in your contract during the
accumulation phase will help determine the amount you will receive during the
income phase. Other factors will affect the amount of your payments, such as
age, gender, and the payout option you select.
9
SUMMARY FOR SECTIONS 1-9 CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
The contract offers a choice of annuity payout and death benefit options,
which may also be available to you.
If you change your mind about owning Strategic Partners Plus, you may cancel
your contract within 10 days after receiving it (or whatever period is required
by applicable law). We call this the "Free Look" period.
SECTION 2
WHAT INVESTMENT OPTIONS CAN I CHOOSE?
You can invest your money in any or all of the following variable investment
options:
The Prudential Series Fund, Inc.
Jennison Portfolio (domestic equity)
Prudential Equity Portfolio
Prudential Global Portfolio
Prudential Money Market Portfolio
Prudential Stock Index Portfolio
Prudential Value Portfolio (domestic equity)
SP Aggressive Growth Asset Allocation Portfolio
SP AIM Aggressive Growth Portfolio
SP AIM Core Equity Portfolio
SP Alliance Large Cap Growth Portfolio
SP Alliance Technology Portfolio
SP Balanced Asset Allocation Portfolio
SP Conservative Asset Allocation Portfolio
SP Davis Value Portfolio
SP Deutsche International Equity Portfolio
SP Fundamental Value Portfolio
SP Growth Asset Allocation Portfolio
SP International Value Portfolio
SP INVESCO Small Company Growth Portfolio
SP Jennison International Growth Portfolio
SP Large Cap Growth Portfolio
SP Large Cap Value Portfolio
SP MFS Capital Opportunities Portfolio
(domestic and foreign equity)
SP Mid Cap Growth Portfolio
SP Mid Cap Value Portfolio
SP PIMCO High Yield Portfolio
SP PIMCO Total Return Portfolio
SP Prudential U.S. Emerging Growth Portfolio
SP Small Cap Value Portfolio
SP Small/Mid Cap Value Portfolio
SP Strategic Partners Focused Growth Portfolio
Evergreen Variable Annuity Trust
Evergreen VA Blue Chip Fund
Evergreen VA Capital Growth Fund
Evergreen VA Foundation Fund
(domestic balanced/equity and fixed income)
Evergreen VA Global Leaders
(international and global growth/equity)
Evergreen VA Growth Fund
Evergreen VA Masters Fund
(domestic growth/all cap/equity)
Evergreen VA Omega Fund
(domestic growth/all cap/equity)
Evergreen VA Small Cap Value Fund
Janus Aspen Series
Growth Portfolio -- Service Shares
Depending upon market conditions, you may earn or lose money in any of these
options. The value of your contract will fluctuate depending upon the
performance of the mutual fund portfolios used by the variable investment
options that you choose. Performance information for the variable investment
options appears in the Statement of Additional Information (SAI). Past
performance is not a guarantee of future results.
Two guaranteed fixed interest rate options are also available:
- - The one-year fixed interest rate option offers a base interest rate that is
guaranteed by us for one year, and will always be at least 3% per year. We
may also offer a higher interest rate on each purchase payment allocated to
this option for the first year after the payment.
- - The dollar cost averaging fixed rate option offers an interest rate that is
guaranteed by us for a selected period during which we make periodic
transfers from this option to the variable investment options you select or
to the one-year fixed interest rate option. We guarantee that the interest
rate for the dollar cost averaging fixed rate option will always be at least
3% per year.
10
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
You may also invest your money in a market value adjustment option if you
purchase a Contract With Credit.
You can allocate purchase payments or transfer contract value to one or more
guarantee periods available under the market value adjustment option. Available
guarantee periods will include one or more of the following periods: 1 year
(currently available only as a renewal option), 2 years, 3 years, 4 years, 5
years, 6 years, 7 years, 8 years, 9 years and 10 years in length. Allocation or
transfers must be at least $1,000.
SECTION 3
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)
If you want to receive regular income from your annuity, you can choose one of
several options, including guaranteed payments for the annuitant's lifetime.
Generally, once you begin receiving regular payments, you cannot change your
payment plan.
SECTION 4
WHAT IS THE DEATH BENEFIT?
In general, if the sole owner or first to die of the owner or joint owner dies
before the income phase of the contract begins, the person(s) or entity that you
have chosen as your beneficiary will receive, at a minimum, the greater of (i)
the contract value, (ii) either the base death benefit or, for a higher
insurance and administrative cost, a potentially larger guaranteed minimum death
benefit. The base death benefit equals the total invested purchase payments
proportionally reduced by withdrawals. The guaranteed minimum death benefit is
equal to the "GMDB protected value". If on the date we receive due proof of
death, (1) there is only one owner of the contract and there is only one
beneficiary who is the owner's spouse; or (2) there are an owner and joint owner
of the contract, and the owner's spouse is both the joint owner and the
beneficiary under the contract and certain other conditions are met, then in
lieu of paying a death benefit, we will allow the surviving spouse to continue
the contract by exercising the Spousal Continuance Benefit, which we describe on
page 31.
SECTION 5
HOW CAN I PURCHASE A STRATEGIC PARTNERS PLUS CONTRACT?
Under most circumstances, you can purchase this contract with a minimum initial
purchase payment of $10,000. Generally, you can make additional purchase
payments of $500 or more at any time during the accumulation phase of the
contract. Your representative can help you fill out the proper forms. The
Contract With Credit provides for the allocation of a credit with each purchase
payment.
You may purchase this contract only if you are age 85 or younger. Certain age
limits apply to certain features and benefits described herein.
SECTION 6
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS PLUS CONTRACT?
The contract has insurance features and investment features, both of which have
related costs and charges.
- - Each year (or upon full surrender) we deduct a contract maintenance charge of
$30 if your contract value is less than $75,000 (or 2% of your contract
value, if that amount is less than $30). We do not impose the contract
maintenance charge if your contract value is $75,000 or more.
- - For insurance and administrative costs, we also deduct a daily charge based
on the average daily value of all assets allocated to the variable investment
options, depending on the death benefit option that you choose. The daily
cost is equivalent to an annual charge, as follows:
-- 1.40% if you do not choose the guaranteed minimum death benefit,
-- 1.65% if you choose the step-up guaranteed minimum death benefit option.
We impose an additional insurance and administrative cost of 0.10% annually
for the Contract With Credit.
- - The mutual funds in which the variable investment options invest also incur
fees and expenses. For the year 2002, these daily charges ranged on an annual
basis from 0.39% to 1.30% of a fund's average daily net assets.
11
SUMMARY FOR SECTIONS 1-9 CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
- - If you withdraw money less than seven contract anniversaries after making a
purchase payment, then you may have to pay a withdrawal charge on all or part
of the withdrawal. This charge ranges from 1-7% for the Contract Without
Credit and 5-8% for the Contract With Credit.
For more information, including details about other possible charges under
the contract, see "Summary of Contract Expenses" on page 13 and "What Are The
Expenses Associated With The Strategic Partners Plus Contract?" on page 35.
SECTION 7
HOW CAN I ACCESS MY MONEY?
You may withdraw money at any time during the accumulation phase. If you do so,
however, you may be subject to income tax and, if you make a withdrawal prior to
age 59 1/2, an additional tax penalty as well. For the Contract Without Credit,
if you withdraw money less than seven contract anniversaries after making a
purchase payment, we may impose a withdrawal charge ranging from 1 to 7%. For
the version of the Contract With Credit, we may impose a withdrawal charge
ranging from 5-8%. Under the market value adjustment option, you will be subject
to a market value adjustment if you make a withdrawal or transfer from the
option prior to the end of a guarantee period.
SECTION 8
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS PLUS
CONTRACT?
Your earnings are generally not taxed until you withdraw them. If you take money
out during the accumulation phase, the tax laws treat the withdrawal as first a
withdrawal of earnings, which are taxed as ordinary income. If you are younger
than age 59 1/2 when you take money out, you may be charged a 10% federal tax
penalty on the earnings in addition to ordinary taxation. A portion of the
payments you receive during the income phase is considered a return of your
original investment and therefore will not be taxable as income. Generally, all
amounts withdrawn from an Individual Retirement Annuity (IRA) contract
(excluding Roth IRAs) prior to age 59 1/2 are taxable and subject to the 10%
penalty.
SECTION 9
OTHER INFORMATION
This contract is issued by Pruco Life of New Jersey, an indirect subsidiary of
the Prudential Insurance Company of America, and sold by registered
representatives of affiliated and unaffiliated broker/dealers.
12
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
SUMMARY OF CONTRACT EXPENSES
- --------------------------------------------------------------------------------
THE PURPOSE OF THIS SUMMARY IS TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES
YOU WILL PAY FOR STRATEGIC PARTNERS PLUS. THE FOLLOWING TABLES DESCRIBE THE
MAXIMUM FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING, AND
SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT
YOU WILL PAY AT THE TIME THAT YOU BUY THE CONTRACT, SURRENDER THE CONTRACT, OR
TRANSFER CASH VALUE BETWEEN INVESTMENT OPTIONS. STATE PREMIUM TAXES MAY ALSO BE
DEDUCTED.
For more detailed information, including additional information about current
and maximum charges, see "What Are The Expenses Associated With The Strategic
Partners Plus Contract?" on page 35. For more detailed expense information about
the mutual funds, please refer to the individual fund prospectuses, which you
will find attached at the back of this prospectus. Historical unit values appear
in the appendix to this prospectus.
CONTRACTOWNER TRANSACTION EXPENSES
<Table>
<Caption>
WITHDRAWAL CHARGE(1)
- -----------------------------------------------
CONTRACT CONTRACT CONTRACT
ANNIVERSARIES SINCE WITH WITHOUT
PURCHASE PAYMENT CREDIT CREDIT
- ------------------- --------- --------------
0 8% 7%
1 8% 6%
2 8% 5%
3 8% 4%
4 7% 3%
5 6% 2%
6 5% 1%
7 0% 0%
--- --
</Table>
<Table>
<Caption>
MAXIMUM TRANSFER FEE
- --------------------
First 12 transfers per year $ 0.00
Each transfer after 12(2) $25.00
</Table>
NOTE 1: Each contract year, you may withdraw a specified amount of your contract
value without incurring a withdrawal charge. We will waive the withdrawal fee if
we pay a death benefit or under certain other circumstances. See "Withdrawal
Charge" on page 35.
NOTE 2: We will not charge you for transfers made in connection with Dollar Cost
Averaging and Auto-Rebalancing and do not count them toward the limit of 12 free
transfers per year.
13
SUMMARY OF CONTRACT EXPENSES CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
The next table describes the fees and expenses that you will pay periodically
during the time that you own the contract, not including underlying mutual fund
fees and expenses.
<Table>
MAXIMUM CONTRACT MAINTENANCE CHARGE AND CONTRACT CHARGE UPON FULL
WITHDRAWAL(3)
- ------------------------------------------------------------------
$ 30
INSURANCE AND ADMINISTRATIVE EXPENSES
- -------------------------------------
AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE ALLOCATED
TO VARIABLE INVESTMENT OPTIONS
Base Death Benefit: 1.40%
Guaranteed Minimum Death Benefit Option--Step-Up: 1.65%
Additional Charge for Contract With Credit(4) 0.10%
</Table>
NOTE 3: We currently assess a fee of $30 against contracts valued less than
$75,000 (or 2% of contract value, if less).
NOTE 4: We impose this additional charge of 0.10% on the Contract With Credit,
irrespective of which death benefit option you choose.
The next item shows the minimum and maximum total operating expenses charged by
the underlying mutual funds that you may pay periodically during the time that
you own the contract. More detail concerning each underlying mutual fund's fees
and expenses is contained in the prospectus for each underlying mutual fund. The
minimum and maximum total operating expenses depicted below are based on
historical fund expenses for the year ended December 31, 2002. Fund expenses are
not fixed or guaranteed by the Strategic Partners Plus contract, and may vary
from year to year.
TOTAL ANNUAL MUTUAL FUND OPERATING EXPENSES (expenses that are deducted from
underlying mutual fund assets, including management fees, distribution and/or
service (12b-1) fees, and other expenses).
<Table>
<Caption>
Minimum Maximum
Total Annual Underlying Mutual Fund Operating
Expenses % %
</Table>
14
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
EXPENSE EXAMPLES
- --------------------------------------------------------------------------------
THESE EXAMPLES ARE 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 MUTUAL FUND FEES AND EXPENSES.
THE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS
INDICATED. THE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH
YEAR AND ASSUMES THE MAXIMUM FEES AND EXPENSES OF ANY OF THE MUTUAL FUNDS.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, BASED ON THESE ASSUMPTIONS,
YOUR COSTS WOULD BE AS INDICATED IN THE TABLES THAT FOLLOW.
EXAMPLE 1A: Contract Without Credit: Base Death Benefit; and You Withdraw All
Your Assets
This example assumes that:
- - You invest $10,000 in the Contract Without Credit;
- - You choose the Base Death Benefit;
- - You allocate all of your assets to the variable investment option having the
maximum total operating expenses;
- - The investment has a 5% return each year;
- - The mutual fund's total operating expenses remain the same each year; and
- - You withdraw all your assets at the end of the indicated period.
EXAMPLE 1B: Contract Without Credit: Base Death Benefit; and You Do Not Withdraw
Your Assets
This example makes exactly the same assumptions as Example 1a except that it
assumes that you do not withdraw any of your assets at the end of the indicated
period.
EXAMPLE 2A: Contract Without Credit: Step-Up Guaranteed Minimum Death Benefit;
and You Withdraw All Your Assets
This example assumes that:
- - You invest $10,000 in the Contract Without Credit;
- - You choose the Step-Up Guaranteed Minimum Death Benefit;
- - You allocate all of your assets to the variable investment option having the
maximum total operating expenses;
- - The investment has a 5% return each year;
- - The mutual fund's total operating expenses remain the same each year; and
- - You withdraw all your assets at the end of the indicated period.
15
EXPENSE EXAMPLES CONTINUED
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
Example 2b: Contract Without Credit: Step-Up Guaranteed Minimum Death Benefit;
and You Do Not Withdraw Your Assets
This example makes exactly the same assumptions as Example 2a except that it
assumes that you do not withdraw any of your assets at the end of the indicated
period.
Example 3a: Contract With Credit: Base Death Benefit; and You Withdraw All Your
Assets
This example makes exactly the same assumptions as Example 1a except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
Example 3b: Contract With Credit: Base Death Benefit; and You Do Not Withdraw
Your Assets
This example makes exactly the same assumptions as Example 1b except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
Example 4a: Contract With Credit: Step-Up Guaranteed Minimum Death Benefit; and
You Withdraw All Your Assets
This example makes exactly the same assumptions as Example 2a except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
Example 4b: Contract With Credit: Step-Up Guaranteed Minimum Death Benefit; and
You Do Not Withdraw Your Assets
This example makes exactly the same assumptions as Example 2b except that it
assumes that you invest in the version of the Contract With Credit under which
bonus credits are generally not recapturable after expiration of the free look
period.
In these expense examples, we set out projected expenses that are based on
versions of the contract that carry the highest and lowest overall charges. We
do not depict projected expenses for every possible combination of contract
charges. The actual expenses under the contract with the insurance features and
underlying funds that you have selected, and the purchase payments that you have
made, may vary from the figures we depict here.
NOTES FOR EXPENSE EXAMPLES:
THESE EXAMPLES DO NOT SHOW PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE HIGHER OR LOWER. THESE
EXAMPLES DO NOT DEPICT EVERY
POSSIBLE COMBINATION OF CHARGES
UNDER THE CONTRACTS.
The values shown in the 10 year
column are the same for Example 1a
and Example 1b, the same for
Example 2a and 2b, the same for
Example 3a and 3b, and the same for
Example 4a and 4b. This is because
if 10 years have elapsed since your
last purchase payment, we would no
longer deduct withdrawal charges
when you make a withdrawal.
Examples 3a, 3b, 4a and 4b reflect
the maximum withdrawal charges.
The examples use an average
contract maintenance charge, which
we calculated based on our estimate
of the total contract fees we
expect to collect. Based on these
estimates, the contract maintenance
charge is included as an annual
charge of 0.05% of contract value.
Your actual fees will vary based on
the amount of your contract and
your specific allocation among the
investment options.
16
- --------------------------------------------------------------------------------
PART I
STRATEGIC PARTNERS PLUS PROSPECTUS SUMMARY
<Table>
<Caption>
CONTRACT WITHOUT CREDIT: BASE DEATH BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
EXAMPLE 1a: EXAMPLE 1b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
--------------------------------------------------------------------
</Table>
<Table>
<Caption>
CONTRACT WITHOUT CREDIT: STEP-UP GUARANTEED MINIMUM DEATH BENEFIT OPTION
- ---------------------------------------------------------------------------------------------------------------------------
EXAMPLE 2a: EXAMPLE 2b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
--------------------------------------------------------------------
</Table>
<Table>
<Caption>
CONTRACT WITH CREDIT: BASE DEATH BENEFIT
- ------------------------------------------------------------------------------------------------------------------------------
EXAMPLE 3a: EXAMPLE 3b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
----------------------------------------------------------------------
</Table>
<Table>
<Caption>
CONTRACT WITH CREDIT: STEP-UP GUARANTEED MINIMUM DEATH BENEFIT OPTION
- ---------------------------------------------------------------------------------------------------------------------------
EXAMPLE 4a: EXAMPLE 4b:
IF YOU WITHDRAW YOUR ASSETS IF YOU DO NOT WITHDRAW YOUR ASSETS
-----------------------------------------------------------------------
</Table>
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18
PART II SECTIONS 1-9
- --------------------------------------------------------------------------------
STRATEGIC PARTNERS PLUS PROSPECTUS
19
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20
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
1:
WHAT IS THE STRATEGIC PARTNERS PLUS
VARIABLE ANNUITY?
- --------------------------------------------------------------------------------
THE STRATEGIC PARTNERS PLUS VARIABLE ANNUITY IS A CONTRACT BETWEEN YOU, THE
OWNER, AND US, PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY (PRUCO LIFE OF NEW
JERSEY, WE OR US).
Under our contract, in exchange for your payment to us, we promise to pay you a
guaranteed income stream that can begin any time on or after the first contract
anniversary. Your annuity is in the accumulation phase until you decide to begin
receiving annuity payments. The date you begin receiving annuity payments is the
annuity date. On the annuity date, your contract switches to the income phase.
This annuity contract benefits from tax deferral. Tax deferral means that you
are not taxed on earnings or appreciation on the assets in your contract until
you withdraw money from your contract. (If you hold the annuity contract in a
tax-favored plan such as an IRA, that plan generally provides tax deferral even
without investing in an annuity contract.)
There are two basic versions of Strategic Partners Plus variable annuity.
Contract With Credit.
- - provides for a bonus credit that we add to each purchase payment that you
make,
- - has higher withdrawal charges and insurance and administrative costs than the
Contract Without Credit,
- - may provide a lower interest rate for fixed rate option than Contract Without
Credit,
- - does not provide the market value adjustment option.
Contract Without Credit.
- - does not provide a credit, and
- - has lower withdrawal charges and insurance and administrative costs than the
Contract With Credit.
- - may provide higher interest rates for fixed rate options than the Contract
With Credit,
- - provides the market value adjustment option.
Unless we state otherwise, when we use the word contract, it applies to both
versions.
Because of the higher withdrawal charges, if you choose the Contract With
Credit and you withdraw a purchase payment, depending upon the performance of
the investment options you choose, you may be worse off than if you had chosen
the Contract Without Credit. We do not recommend purchase of either version of
Strategic Partners Plus if you anticipate having to withdraw a significant
amount of your purchase payments within a few years of making those purchase
payments.
Strategic Partners Plus is a variable annuity contract. This means that
during the accumulation phase, you can allocate your assets among 40 variable
investment options, two guaranteed fixed interest rate options and a market
value adjustment option. If you select variable investment options, the amount
of money you are able to accumulate in your contract during the accumulation
phase depends upon the investment performance of the mutual funds associated
with those variable investment options. Because the mutual funds' portfolios
fluctuate in value depending upon market conditions, your contract value can
either increase or decrease. This is important, since the amount of the annuity
payments you receive during the income phase depends upon the value of your
contract at the time you begin receiving payments.
As mentioned above, two guaranteed fixed interest rate options are available:
- - The one-year fixed interest rate option offers a base interest rate that is
guaranteed by us for one year and will always be at least a minimum interest
rate of 3%. We may also offer a higher interest rate on each purchase payment
allocated to this option for the first year after the payment.
- - The dollar cost averaging fixed rate option offers an interest rate that is
guaranteed by us for a selected period during which periodic transfers are
made to
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WHAT IS THE STRATEGIC PARTNERS PLUS VARIABLE ANNUITY? CONTINUED
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
selected variable investment options and/or to the one-year fixed interest
rate option. We guarantee your money will earn at least 3% while it is
allocated to this option.
Additionally, you may allocate purchase payments or transfer contract value
to the market value adjustment option. Under this option, we will offer one or
more of the following guarantee periods: 1 year (currently available only as a
renewal option), 2 years, 3 years, 4 years, 5 years, 6 years, 7 years, 8 years,
9 years, and 10 years in length. However, we will not allow purchase payments or
transfers into a guarantee period unless that guarantee period offers 3% annual
interest or greater.
As the owner of the contract, you have all of the decision-making rights
under the contract. You will also be the annuitant unless you designate someone
else. The annuitant is the person whose life is used to determine how much and
how long the annuity payments will continue once the annuity phase begins. On or
after the annuity date, the annuitant may not be changed.
The beneficiary is the person(s) or entity you designate to receive any death
benefit. You may change the beneficiary any time prior to the annuity date by
making a written request to us.
SHORT TERM CANCELLATION RIGHT OR "FREE LOOK"
If you change your mind about owning Strategic Partners Plus, you may cancel
your contract within 10 days after receiving it (or whatever period is required
by applicable law). You can request a refund by returning the contract either to
the representative who sold it to you, or to the Prudential Annuity Service
Center at the address shown on the first page of this prospectus. You will
receive:
- - the amount equal to the portion of the purchase payments, including any fees
or other charges, allocated to any of the fixed interest rate options, and
- - the sum of (i) the difference between purchase payments received, including
any fees or other charges, and the amounts allocated to the variable
investment options, and (ii) the contract value as of the date the contract
is mailed or delivered to us or to the representative who sold it to you.
This amount will be reduced by any applicable federal and state income tax
withholding and may be more or less than your original payment. If you have
purchased the Contract With Credit, we will deduct any credit we had added to
your contract value. We will not, unless and until we obtain SEC exemptive
relief, recoup for our own assets the full amount of the 6% bonus credit
applicable to purchase payments of $1 million or greater that we had given to
you. Rather, we will recoup an amount equal to the value of the credit as of the
business day on which we receive your request, less any charges attributable to
that credit. We reserve the right to recapture the entire amount of the credit
upon obtaining appropriate approval of the SEC with regard to that bonus credit.
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
2:
WHAT INVESTMENT OPTIONS
CAN I CHOOSE?
- --------------------------------------------------------------------------------
THE CONTRACT GIVES YOU THE CHOICE OF ALLOCATING YOUR PURCHASE PAYMENTS TO ANY
ONE OR MORE OF 40 VARIABLE INVESTMENT OPTIONS, 2 FIXED INTEREST RATE OPTIONS,
AND A MARKET VALUE ADJUSTMENT OPTION.
The 40 variable investment options invest in mutual funds managed by leading
investment advisers. Separate prospectuses for these funds are attached to this
prospectus. You should read a mutual fund's prospectus before you decide to
allocate your assets to the variable investment option using that fund.
VARIABLE INVESTMENT OPTIONS
Listed below are the mutual funds in which the variable investment options
invest. Each variable investment option has a separate investment objective.
The Prudential Series Fund, Inc.
- - Jennison Portfolio (domestic equity)
- - Prudential Equity Portfolio
- - Prudential Global Portfolio
- - Prudential Money Market Portfolio
- - Prudential Stock Index Portfolio
- - Prudential Value Portfolio (domestic equity)
- - SP Aggressive Growth Asset Allocation Portfolio
- - SP AIM Aggressive Growth Portfolio
- - SP AIM Core Equity Portfolio
- - SP Alliance Large Cap Growth Portfolio
- - SP Alliance Technology Portfolio
- - SP Balanced Asset Allocation Portfolio
- - SP Conservative Asset Allocation Portfolio
- - SP Davis Value Portfolio
- - SP Deutsche International Equity Portfolio
- - SP Fundamental Value Portfolio
- - SP Growth Asset Allocation Portfolio
- - SP International Value Portfolio
- - SP INVESCO Small Company Growth Portfolio
- - SP Jennison International Growth Portfolio
- - SP Large Cap Growth Portfolio
- - SP Large Cap Value Portfolio
- - SP MFS Capital Opportunities Portfolio
(domestic and foreign equity)
- - SP Mid Cap Growth Portfolio (formerly SP MFS Mid-Cap Growth Portfolio)
- - SP Mid Cap Value Portfolio
- - SP PIMCO High Yield Portfolio
- - SP PIMCO Total Return Portfolio
- - SP Prudential U.S. Emerging Growth Portfolio
- - SP Small Cap Value Portfolio
- - SP Small/Mid Cap Value Portfolio
- - SP Strategic Partners Focused Growth Portfolio
The Jennison Portfolio, Prudential Equity Portfolio, Prudential Global
Portfolio, Prudential Money Market Portfolio, Prudential Stock Index Portfolio
and Prudential Value Portfolio, and each "SP" Portfolio of the Prudential Series
Fund, are managed by an indirect wholly-owned subsidiary of Prudential
Financial, Inc. called Prudential Investments LLC (PI). In addition, the
portfolios listed below also have subadvisers, which are listed below and which
have day-to-day responsibility for managing the portfolio, subject to the
oversight of PI using a manager-of-managers approach.
Prudential Money Market Portfolio and Prudential Stock Index Portfolio:
Prudential Investment Management, Inc.
Jennison Portfolio, Prudential Global Portfolio, SP Jennison
International Growth Portfolio, SP Prudential U.S. Emerging Growth
Portfolio and Prudential Value Portfolio: Jennison Associates LLC
Prudential Equity Portfolio: GE Asset Management, Incorporated, Jennison
Associates LLC, and Salomon Brothers Asset Management Inc.
SP Strategic Partners Focused Growth Portfolio: Jennison Associates LLC
and Alliance Capital Management, L.P.
SP AIM Aggressive Growth Portfolio and SP AIM Core Equity Portfolio: A I
M Capital Management, Inc.
SP Alliance Large Cap Growth Portfolio and SP Alliance Technology
Portfolio: Alliance Capital Management, L.P.
SP Davis Value Portfolio: Davis Advisors
SP Deutsche International Equity Portfolio: Deutsche Asset Management
Investment Services Limited, a wholly-owned subsidiary of Deutsche Bank
AG
SP Fundamental Value Portfolio: Wellington Management Company, LLP
SP International Value Portfolio: Bank of Ireland Asset Management
(U.S.) Limited
SP INVESCO Small Company Growth Portfolio: INVESCO Funds Group, Inc.
SP Large Cap Growth Portfolio: Furman Selz Capital Management LLC
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WHAT INVESTMENT OPTIONS CAN I CHOOSE? CONTINUED
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
SP Large Cap Value Portfolio and SP Small/Mid Cap Value Portfolio:
Fidelity Management and Research Company
SP MFS Capital Opportunities Portfolio: Massachusetts Financial Services
Company
SP Mid Cap Growth Portfolio (formerly SP MFS Mid-Cap Growth Portfolio):
Calamos Asset Management, Inc.
SP Mid Cap Value Portfolio: Lord, Abbett & Co. LCC
SP PIMCO High Yield Portfolio and SP PIMCO Total Return Portfolio:
Pacific Investment Management Company
SP Small Cap Value Portfolio: EARNEST Partners LLC and National City
Investment Management Company
Evergreen Variable Annuity Trust
- - Evergreen VA Blue Chip Fund
- - Evergreen VA Capital Growth Fund
- - Evergreen VA Foundation Fund (domestic balanced/equity and fixed income)
- - Evergreen VA Global Leaders Fund (international and global growth/equity)
- - Evergreen VA Growth Fund
- - Evergreen VA Masters Fund (domestic growth/all cap/equity)
- - Evergreen VA Omega Fund (domestic growth/all cap/equity)
- - Evergreen VA Small Cap Value Fund
Evergreen Investment Management Company, LLC serves as investment adviser to the
above-listed Evergreen Variable Annuity Trust Funds.
Janus Aspen Series
- - Growth Portfolio--Service Shares
Janus Capital Management LLC serves as investment adviser to the Growth
Portfolio--Service Shares of Janus Aspen Series.
A fund or portfolio may have a similar name or an investment objective and
investment policies closely resembling those of a mutual fund managed by the
same investment adviser that is sold directly to individual investors. Despite
such similarities, there can be no assurance that the investment performance of
any such fund or portfolio will resemble that of its retail fund counterpart.
An affiliate of each of the funds may compensate Pruco Life of New Jersey
based upon an annual percentage of the average assets held in the fund by Pruco
Life of New Jersey under the contracts. These percentages may vary by fund
and/or portfolio, and reflect administrative and other services we provide.
FIXED INTEREST RATE OPTIONS
We offer two fixed interest rate options:
- - a one-year fixed interest rate option, and
- - a dollar cost averaging fixed rate option ("DCA Fixed Rate Option").
When you select one of these options, your payment will earn interest at the
established rate for the applicable interest rate period. A new interest rate
period is established every time you allocate or transfer money into a fixed
interest rate option. (You may not transfer amounts from other investment
options into the DCA Fixed Rate Option.) You may have money allocated in more
than one interest rate period at the same time. This could result in your money
earning interest at different rates and each interest rate period maturing at a
different time. While these interest rates may change from time to time, they
will never be less than 3%. We may offer lower interest rates for Contracts With
Credit than for Contracts Without Credit.
ONE-YEAR FIXED INTEREST RATE OPTION
We set a one-year base guaranteed annual interest rate for the one-year fixed
interest rate option. Additionally, we may provide a higher interest rate on
each purchase payment allocated to this option for the first year after the
payment. This higher interest rate will not apply to amounts transferred from
other investment options within the contract or amounts remaining in this option
for more than one year.
DOLLAR COST AVERAGING FIXED RATE OPTION
You may allocate all or part of any purchase payment to the DCA Fixed Rate
Option. For this option, the interest rate is guaranteed for the applicable
period of time for
24
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
which transfers are made. Under this option, you automatically transfer amounts
over a stated period (currently, six or twelve months) from the DCA Fixed Rate
Option to the variable investment options and/or to the one-year fixed interest
rate option, as you select. We will invest the assets you allocate to the DCA
Fixed Rate Option in our general account until they are transferred. You may not
transfer from other investment options to the DCA Fixed Rate Option.
If you choose to allocate all or part of a purchase payment to the DCA Fixed
Rate Option, the minimum amount of the purchase payment you may allocate is
$2,000. The first periodic transfer will occur on the date you allocate your
purchase payment to the DCA Fixed Rate Option. Subsequent transfers will occur
on the monthly anniversary of the first transfer. Currently, you may choose to
have the purchase payments allocated to the DCA Fixed Rate Option transferred to
the other options in either six or twelve monthly installments, and you may not
change that number of monthly installments after you have chosen the DCA Fixed
Rate Option. You may allocate to both the six-month and twelve-month options.
(In the future, we may make available other numbers of transfers and other
transfer schedules--for example, quarterly as well as monthly.) If you choose a
six-payment transfer schedule, each transfer generally will equal 1/6th of the
amount you allocated to the DCA Fixed Rate Option, and if you choose a
twelve-payment transfer schedule, each transfer generally will equal 1/12th of
the amount you allocated to the DCA Fixed Rate Option. In either case, the final
transfer amount generally will also include the credited interest. You may
change at any time the options into which the DCA Fixed Rate Option assets are
transferred. You may make a one time transfer of the remaining value out of your
DCA Fixed Rate Option, if you so choose. Transfers from the DCA Fixed Rate
Option do not count toward the maximum number of free transfers allowed under
the contract.
If you make a withdrawal or have a fee assessed from your contract, and all
or part of that withdrawal or fee comes out of the DCA Fixed Rate Option, we
will recalculate the periodic transfer amount to reflect the change. This
recalculation may include some or all of the interest credited to the date of
the next scheduled transfer. If a withdrawal or fee assessment reduces the
monthly transfer amount below $100, we will transfer the remaining balance in
the DCA Fixed Rate Option on the next scheduled transfer date.
By investing amounts on a regular basis instead of investing the total amount
at one time, the DCA Fixed Rate Option may decrease the effect of market
fluctuation on the investment of your purchase payment. Of course, dollar cost
averaging cannot ensure a profit or protect against loss in a declining market.
MARKET VALUE ADJUSTMENT OPTION
Under the market value adjustment option, we have the right to offer one or more
of several guarantee periods. These guarantee periods are 1 year (currently
available only as a renewal option), 2 years, 3 years, 4 years, 5 years, 6
years, 7 years, 8 years, 9 years, or 10 years in length.
We declare the interest rate for each available guarantee period
periodically, but we guarantee that we will declare no less than 3% interest
with respect to any guarantee period. You will earn interest on your invested
purchase payment at the rate that we have declared for the guarantee period you
have chosen. You must invest at least $1,000.
We may offer lower interest rates for Contracts With Credit than for
Contracts Without Credit.
We express interest rates as annual rates, although we credit interest within
each guarantee period on a daily basis. The daily interest that we credit is
equal to the pro rated portion of the interest that would be earned on an annual
basis. We credit interest from the business day on which your purchase payment
is received in good order at the Prudential Annuity Service Center until the
earliest to occur of any of the following events: (a) full surrender of the
Contract, (b) commencement of annuity payments or settlement, (c) cessation of
the guarantee period, (d) withdrawal or transfer the value of the guarantee
period, or (e) death of the first to die of the owner and joint owner (or
annuitant, for entity-owned contracts) unless the contract is continued under
the spousal continuences provision.
25
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WHAT INVESTMENT OPTIONS CAN I CHOOSE? CONTINUED
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
During the 30 day period immediately following the end of a guarantee period,
we allow you to do any of the following, without the imposition of the market
value adjustment:
(a) withdrawal or transfer the value of the guarantee period,
(b) allocate the value in the guarantee period to another guarantee period or
other investment option (provided that the new guarantee period ends prior
to the annuity date, if earlier). You will receive the interest rate
applicable on the date we receive your instruction, or
(c) apply the value in the guarantee period to the annuity or settlement option
of your choice.
If we do not receive instructions from you concerning the disposition of the
contract value in your maturing guarantee period, we will reinvest the contract
value in The Prudential Money Market Portfolio investment option.
During the 30 day period immediately following the end of the guarantee
period, or until you elect to do either a, b or c delineated immediately above,
you will receive the current interest rate applicable to the guarantee period
having the same duration as the guarantee period that just matured, which is
offered on the day immediately following the end of the matured guarantee
period. However, if at that time we do not offer a guarantee period with the
same duration as that which matured, you will then receive the current interest
rate applicable to the shortest guarantee period then offered.
Under the market value adjustment option, while your money remains in the
contract for the full guarantee period, your principal amount is guaranteed and
the interest amount that your money will earn is guaranteed by us to always be
at least 3%.
Payments allocated to the fixed interest rate options become part of Pruco
Life's general assets. Payments allocated to the market value adjustment option
are held as a separate pool of assets, but the income, gains or losses
experienced by these assets are not directly credited or charged against the
contracts. As a result, the strength of our guarantees under these options are
based on the overall financial strength of Pruco Life.
MARKET VALUE ADJUSTMENT
When you allocate a purchase payment or transfer contract value to a guarantee
period, we use that money to buy and sell securities and other instruments to
support our obligation to pay interest. Generally, we buy bonds for this
purpose. The duration of the bonds and other instruments that we buy with
respect to a particular guarantee period is influenced significantly by the
length of the guarantee period. Thus, for example, we typically would acquire
longer-duration bonds with respect to the 10 year guarantee period than we do
for the 3 year guarantee period. The value of these bonds is affected by changes
in interest rates, among other factors. The market value adjustment that we
assess against your contract value if you withdraw or transfer prior to the end
of a guarantee period involves our attributing to you a portion of our
investment experience on these bonds and other instruments. For example, if you
make a full withdrawal when interest rates have risen since the time of your
investment, the bonds and other investments in the guarantee period likely would
have decreased in value, meaning that we would impose a "negative" market value
adjustment on you (i.e., one that results in a reduction of the withdrawal
proceeds that you receive). For a partial withdrawal, we would deduct a negative
market value adjustment from your remaining contract value. Conversely, if
interest rates have decreased, the market value adjustment would be positive.
Other things you should know about the market value adjustment include the
following:
- - We determine the market value adjustment according to a mathematical formula,
which is set forth at the end of this prospectus under the heading
"Market-Value Adjustment Formula." In that section of the prospectus, we also
provide hypothetical examples of how the formula works.
- - In addition to imposing a market value adjustment on withdrawals, we also
will impose a market value adjustment on the contract value you apply to an
annuity or settlement option, unless you annuitize
26
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
after the end of a guarantee period. The laws of certain states may prohibit
us from imposing a market value adjustment on the annuity date.
YOU SHOULD REALIZE, HOWEVER, THAT APART FROM THE MARKET VALUE ADJUSTMENT, THE
VALUE OF THE BENEFIT IN YOUR GUARANTEE PERIOD UNDER YOUR CONTRACT DOES NOT
DEPEND ON THE INVESTMENT PERFORMANCE OF THE BONDS AND OTHER INSTRUMENTS THAT WE
HOLD WITH RESPECT TO YOUR GUARANTEE PERIOD. APART FROM THE EFFECT OF ANY MARKET
VALUE ADJUSTMENT, WE DO NOT PASS THROUGH TO YOU THE GAINS OR LOSSES ON THE BONDS
AND OTHER INSTRUMENTS THAT WE HOLD IN CONNECTION WITH A GUARANTEE PERIOD.
TRANSFERS AMONG OPTIONS
You can transfer money among the variable investment options and the one-year
fixed interest rate option. In addition, you can transfer contract value out of
a market value adjustment guarantee period into another market value adjustment
guarantee period, a variable investment option, or the one-year fixed interest
rate option, although a market value adjustment will apply to any transfer you
make prior to the end of a guarantee period. You may transfer contract value
into the market value adjustment option at any time, provided it is at least
$1,000.
You may make your transfer request by telephone, electronically, or otherwise
in paper form to the Prudential Annuity Service Center. You may make up to two
telephone and electronic transfer requests per month. You must make any
additional transfer requests during that month in writing with an original
signature. We have procedures in place to confirm that instructions received by
telephone or electronically are genuine. We will not be liable for following
telephone or electronic instructions that we reasonably believe to be genuine.
We require any transfer request that you submit by fax to be accompanied by a
confirming telephone call to the Prudential Annuity Service Center. Your
transfer request will take effect at the end of the business day on which we
receive it. Our business day generally closes at 4:00 p.m. Eastern time, and
requests received after that time will take effect at the end of the next
business day.
YOU CAN MAKE TRANSFERS OUT OF A FIXED INTEREST-RATE OPTION, OTHER THAN THE
DCA OPTION, ONLY DURING THE 30-DAY PERIOD FOLLOWING THE END OF THE ONE YEAR
INTEREST RATE PERIOD. TRANSFERS FROM THE DCA OPTION ARE MADE ON A PERIODIC BASIS
FOR THE PERIOD THAT YOU SELECT.
During the contract accumulation phase, you can make up to 12 transfers each
contract year without charge. We charge $25 for each transfer after the twelfth
in a contract year. (Dollar Cost Averaging and Auto-Rebalancing transfers
whether or not part of the DCA fixed rate option are always free, and do not
count toward the 12 free transfers per year.)
OTHER AVAILABLE FEATURES
DOLLAR COST AVERAGING
The dollar cost averaging (DCA) feature (which is distinct from the DCA Fixed
Rate Option) allows you to systematically transfer either a fixed dollar amount
or a percentage out of any variable investment option and into one or more other
variable investment options or the one-year fixed rate option. You can have
these automatic transfers occur monthly, quarterly, semiannually or annually. By
investing amounts on a regular basis instead of investing the total amount at
one time, dollar cost averaging may decrease the effect of market fluctuation on
the investment of your purchase payment. Of course, dollar cost averaging cannot
ensure a profit or protect against loss in a declining market.
Each dollar cost averaging transfer must be at least $100. Transfers will be
made automatically on the schedule you choose until the entire amount you chose
to have transferred has been transferred or until you tell us to discontinue the
transfers. If the remaining amount to be transferred drops below $100, the
entire remaining balance will be transferred on the next transfer date. You can
allocate additional amounts to be transferred at any time.
Your transfers will occur on the last calendar day of each transfer period
you have selected, provided that the New York Stock Exchange is open on that
date. If the New York Stock Exchange is not open on a particular transfer date,
the transfer will take effect on the next business day.
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WHAT INVESTMENT OPTIONS CAN I CHOOSE? CONTINUED
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
Any dollar cost averaging transfers you make do not count toward the 12 free
transfers you are allowed each contract year. The dollar cost averaging feature
is available only during the contract accumulation phase.
ASSET ALLOCATION PROGRAM
We recognize the value of having advice when deciding how to allocate your
purchase payments among the investment options. If you choose to participate in
the Asset Allocation Program, your representative will give you a questionnaire
to complete that will help determine a program that is appropriate for you. We
will prepare your asset allocation based on your answers to the questionnaire.
We will not charge you for this service and you are not obligated to participate
or to invest according to program recommendations.
AUTO-REBALANCING
Once you have allocated your money among the variable investment options, the
actual performance of the investment options may cause your allocation to shift.
For example, an investment option that initially holds only a small percentage
of your assets could perform much better than another investment option. Over
time, this option could increase to a larger percentage of your assets than you
desire. You can direct us to automatically rebalance your assets to return to
your original allocation percentages or to subsequent allocation percentages you
select. We will rebalance only the variable investment options that you have
designated. If you also participate in the DCA feature, then the variable
investment option from which you make the DCA transfers will not be rebalanced.
You may choose to have your rebalancing occur monthly, quarterly,
semiannually, or annually. The rebalancing will occur on the last calendar day
of the period you have chosen, provided that the New York Stock Exchange is open
on that date. If the New York Stock Exchange is not open on that date, the
rebalancing will take effect on the next business day.
Any transfers that occur as a result of the Auto-Rebalancing feature do not
count toward the 12 free transfers you are allowed per year. The
auto-rebalancing feature is available only during the contract accumulation
phase. If you choose auto-rebalancing and dollar cost averaging,
auto-rebalancing will take place after the transfers from your DCA account.
VOTING RIGHTS
We are the legal owner of the shares of the mutual funds available as variable
investment options. However, we currently vote the shares of the mutual funds
according to voting instructions we receive from contract owners. When a vote is
required, we will mail you a form that you can complete and return to us to tell
us how you wish us to vote. When we receive those instructions, we will vote all
of the shares we own on your behalf in accordance with those instructions. We
will vote fund shares for which we do not receive instructions, and any other
shares that we own, in the same proportion as shares for which we do receive
instructions from contract owners. We may change the way your voting
instructions are calculated if federal or state law requires or permits it.
SUBSTITUTION
We may substitute one or more of the mutual funds used by the variable
investment options. We would not do this without the approval of the SEC and any
necessary state insurance departments. We would give you specific notice in
advance of any substitution we intended to make. We may also stop allowing
investments in existing funds.
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3:
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE
INCOME PHASE? (ANNUITIZATION)
- --------------------------------------------------------------------------------
We can begin making annuity payments any time on or after the first contract
anniversary. Annuity payments must begin no later than the later of the contract
anniversary next following the annuitant's 90th birthday or the tenth contract
anniversary.
Upon annuitization, any value in a guarantee period of the market value
adjustment option may be subject to a market value adjustment.
We make the income plans described below available at any time before the
annuity date. We call these plans "annuity options" or "settlement options."
During the income phase, all of the annuity options under this contract are
fixed annuity options. This means that you no longer invest in the variable
investment options--that is, in the underlying mutual funds--on or after the
annuity date. If another annuity option is not selected by the annuity date, you
will automatically select the Life Income Annuity Option (Option 2, described
below) unless prohibited by applicable law. GENERALLY, ONCE THE ANNUITY PAYMENTS
BEGIN, THE ANNUITY OPTION CANNOT BE CHANGED AND YOU CANNOT MAKE WITHDRAWALS.
OPTION 1
ANNUITY PAYMENTS FOR A FIXED PERIOD
Under this option, we will make equal payments for the period chosen, from 10
years up to 25 years (but not to exceed life expectancy). We will make these
payments monthly, quarterly, semiannually, or annually, as you choose, for the
fixed period. If the annuitant dies during the income phase, we will continue
payments to the beneficiary for the remainder of the fixed period or, if the
beneficiary so chooses, we will make a single lump-sum payment. We calculate the
amount of the lump sum payment as the present value of the unpaid future
payments based upon the interest rate used to compute the actual payments. That
interest rate will always be at least 3% a year.
OPTION 2
LIFE INCOME ANNUITY OPTION
Under this option, we will make annuity payments monthly, quarterly,
semiannually, or annually as long as the annuitant is alive. If the annuitant
dies before we have made 10 years' worth of payments, we will pay the
beneficiary the present value of the remaining annuity payments in one lump sum,
unless we were specifically instructed to continue to pay the remaining monthly
annuity payments. We calculate the present value of the remaining annuity
payments using the interest rate used to compute the amount of the original 120
payments. That interest rate will always be at least 3% a year. If an annuity
option is not selected by the annuity date, you will automatically select this
option.
OTHER ANNUITY OPTIONS
We currently offer a variety of other annuity options. At the time annuity
payments are chosen, we may make available to you any of the fixed annuity
options then offered.
TAX CONSIDERATIONS
If your contract is held under a tax-favored plan, as discussed on page 42, you
should consider the minimum distribution requirements mentioned on page 43 when
selecting your annuity option.
For certain contracts held in connection with "qualified" retirement plans
(such as a Section 401(k) plan), please note that if you are married at the time
your payments commence, you may be required by federal law to choose an income
option that provides at least a 50 percent joint and survivor annuity to your
spouse, unless your spouse waives that right. Similarly, if you are married at
the time of your death, federal law may require all or a portion of the death
benefit to be paid to your spouse, even if you designated someone else as your
beneficiary. For more information, consult the terms of your retirement
arrangement.
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4:
WHAT IS THE
DEATH BENEFIT?
- --------------------------------------------------------------------------------
THE DEATH BENEFIT FEATURE PROTECTS THE VALUE OF THE CONTRACT FOR THE
BENEFICIARY.
BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. You name the beneficiary at the time the contract is issued, unless you
change it at a later date. A change of beneficiary will take effect on the date
you sign the change request form. Unless you name an irrevocable beneficiary,
during the accumulation period, you can change the beneficiary at any time
before the owner dies.
CALCULATION OF THE DEATH BENEFIT
If the owner or joint owner dies during the accumulation phase, we will, upon
receiving the appropriate proof of death and any other needed documentation
("due proof of death"), pay a death benefit to the beneficiary designated by the
deceased owner or joint owner. If there are an owner and joint owner of the
contract, and the owner's spouse is both the joint owner and the beneficiary, at
the death of the first to die, the death benefit will be paid to the surviving
owner or the surviving owner may continue the contract under the Spousal
Continuance Benefit. See "Spousal Continuance Benefit" on page 31. Upon death,
the beneficiary will receive the greater of the following:
1) The current value of your contract (as of the time we receive due proof of
death). If you have purchased the Contract With Credit, we will first deduct
any credit corresponding to a purchase payment made within one year of death.
2) Either the base death benefit, which equals the total invested purchase
payments you have made proportionally reduced by any withdrawals, or, if you
have chosen the guaranteed minimum death benefit, the GMDB protected value.
GUARANTEED MINIMUM DEATH BENEFIT
The guaranteed minimum death benefit (GMDB) provides for the option to receive
an enhanced death benefit upon the death of the sole owner or the first to die
of the owner or joint owner during the accumulation phase. The GMDB protected
value is calculated daily.
GMDB STEP-UP
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS LESS THAN AGE 80
ON THE CONTRACT DATE, the GMDB step-up before the first contract anniversary is
the initial invested purchase payment increased by subsequent invested purchase
payments, and proportionally reduced by the effect of withdrawals. The GMDB
step-up on each contract anniversary will be the greater of the previous GMDB
step-up and the contract value as of such contract anniversary. Between contract
anniversaries, the GMDB step-up will increase by invested purchase payments and
reduce proportionally by withdrawals.
We stop increasing the GMDB step-up by any appreciation in the contract value
on the later of:
- - the contract anniversary coinciding with or next following the sole or older
owner's 80th birthday, or
- - the 5th contract anniversary.
However we still increase the GMDB protected value by subsequent invested
purchase payments and proportionally reduce it by withdrawals.
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS BETWEEN AGE 80
AND 85 ON THE CONTRACT DATE, the GMDB step-up before the third contract
anniversary is the sum of invested purchase payments, reduced by the effect of
withdrawals. On the third contract anniversary, we will adjust the GMDB step-up
to the greater of the then current GMDB step-up or the contract value as of that
contract anniversary. Thereafter we will only increase the GMDB protected value
by subsequent invested purchase payments and proportionally reduce it by
withdrawals.
Special rules apply if the beneficiary is the spouse of the owner and the
contract does not have a joint owner. In that case, upon the death of the owner,
the spouse will have the choice of the following:
- - If the sole beneficiary under the contract is the owner's spouse, and the
other requirements of the Spousal Continuance Benefit are met (see page 31),
then the contract can continue, and the spouse will become the new owner of
the contract; or
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
- - The spouse can receive the death benefit. If the spouse does wish to receive
the death benefit, he or she must make that choice within the first 60 days
following our receipt of due proof of death. Otherwise, the beneficiary will
receive the death benefit.
If ownership of the contract changes as a result of the owner assigning it to
someone else, we will reset the value of the death benefit to equal the contract
value on the date the change of ownership occurs, and for purposes of computing
the future death benefit, we will treat that contract value as a purchase
payment occurring on that date.
SPECIAL RULES IF JOINT OWNERS
If the contract has an owner and a joint owner and they are spouses at the time
that one dies the Spousal Continuance Benefit may apply. See "Spousal
Continuance Benefit" below. If the Contract has an owner and a joint owner and
they are not spouses at the time one dies, we will pay the death benefit and the
contract will end.
PAYOUT OPTIONS
The beneficiary may, within 60 days of providing due proof of death, choose to
take the death benefit under one of several death benefit payout options listed
below.
The death benefit payout options are:
CHOICE 1. Lump sum payment of the death benefit. If the beneficiary does not
choose a payout option within sixty days, the beneficiary will receive this
payout option.
CHOICE 2. The payment of the entire death benefit within a period of 5 years
from the date of death of the first to die of the owner or joint owner.
The entire death benefit will include any increases or losses resulting
from the performance of the variable or fixed interest rate options during
this period. During this period the beneficiary may: reallocate the contract
value among the variable or one-year fixed interest rate options; name a
beneficiary to receive any remaining death benefit in the event of the
beneficiary's death; and make withdrawals from the contract value, in which
case, any such withdrawals will not be subject to any withdrawal charges.
However, the beneficiary may not make any purchase payments to the contract.
During this 5 year period, we will continue to deduct from the death
benefit proceeds the charges and costs that were associated with the features
and benefits of the contract. Some of these features and benefits may not be
available to the beneficiary, such as the spousal continuance benefit.
CHOICE 3. Payment of the death benefit under an annuity or annuity settlement
option over the lifetime of the beneficiary or over a period not extending
beyond the life expectancy of the beneficiary with distribution beginning
within one year of the date of death of the last to survive of the owner or
joint owner.
If the contract has an owner and a joint owner:
- - If the owner and joint owner are spouses at the death of the first to die of
the two, any portion of the death benefit not applied under Choice 3 within
one year of the survivor's date of death must be distributed within five
years of the survivor's date of death.
- - If the owner and joint owner are not spouses at the death of the first to die
of the two, any portion of the death benefit (which is equal to the adjusted
contract value) not applied under Choice 3 within one year of the date of
death of the first to die must be distributed within five years of that date
of death.
The tax consequences to the beneficiary vary among the three death benefit
payout options. See "What are the Tax Considerations Associated with the
Strategic Partners Plus Contract?" on page 40.
SPOUSAL CONTINUANCE BENEFIT
This benefit is available if, on the date we receive due proof of the owner's
death, (1) there is only one owner of the contract and there is only one
beneficiary who is the owner's spouse; or (2) there are an owner and joint owner
of the contract, and the joint owner is the owner's spouse and the owner's
beneficiary under the contract. In no event, however, can the annuitant be older
than the maximum age for annuitization on the
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PART II
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date of the spouse's death. In such cases, the surviving spouse, or annuitant if
other than the surviving spouse, cannot be older than age 95 on that date, and
the surviving spouse will become the new sole owner under the contract. Assuming
the above conditions are present, the surviving spouse can elect the spousal
continuance benefit, but must do so no later than 60 days after furnishing due
proof of the owner's death in good order.
Upon activation of the spousal continuance benefit, the contract value is
adjusted to equal the amount of the death benefit to which the surviving spouse
would have been entitled. This contract value will serve as the basis for
calculating any death benefit payable upon the death of the surviving spouse. We
will allocate any increase in the adjusted contract value among the variable,
fixed interest rate or market value adjustment options in the same proportions
that existed immediately prior to the spousal continuance adjustment.
Under the spousal continuance benefit, we waive any potential withdrawal
charges applicable to purchase payments made prior to activation of the spousal
continuance benefit. However, we will continue to impose withdrawal charges on
purchase payments made after activation of this benefit. In addition, contract
value allocated to the market value adjustment option will remain subject to a
potential market value adjustment.
IF YOU ELECTED THE BASE DEATH BENEFIT, then upon activation of the spousal
continuance benefit, we will adjust the contract value to equal the greater of:
- - the contract value, or
- - the sum of all invested purchase payments (adjusted for withdrawals).
IF YOU HAVE ELECTED THE GMDB STEP-UP, we will adjust the contract value to
equal the greater of:
- - the contract value, or
- - the GMDB step-up.
After we have made the adjustment to contract value set out immediately
above, we will continue to compute the GMDB step-up under the surviving spousal
owner's contract, and will do so in accordance with the preceding paragraphs.
If the contract is being continued by the surviving spouse, the attained age
of the surviving spouse will be the basis used in determining the death benefit
payable under the GMDB provisions of the contract.
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
5:
HOW CAN I PURCHASE A STRATEGIC PARTNERS
PLUS CONTRACT?
- --------------------------------------------------------------------------------
PURCHASE PAYMENTS
The initial purchase payment is the amount of money you first pay us to purchase
the contract. The minimum initial purchase payment is $10,000. With some
restrictions, you can make additional purchase payments of $500 or more at any
time during the accumulation phase. You may purchase this contract only if you
are age 85 or younger, and certain age limits apply to certain features and
benefits described herein. However, no subsequent purchase payments may be made
on or after the earliest of the 85th birthday of the owner, joint owner, or
annuitant.
Currently, the maximum aggregate purchase payments you may make is $7
million. We limit the maximum total purchase payments in any contract year other
than the first to $2 million. You must obtain our approval prior to submitting a
purchase payment of $5 million or greater within the first contract year.
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a contract, we will allocate your invested purchase payment
among the variable or fixed interest rate investment options or the market value
adjustment option based on the percentages you choose. The percentage of your
allocation to a particular investment option can range in whole percentages from
0% to 100%.
You may change your allocation of future invested purchase payments at any
time. Contact the Prudential Annuity Service Center for details.
If you make an additional purchase payment without allocation instructions,
we will allocate the invested purchase payment in the same proportion as your
most recent purchase payment, unless you directed us in connection with that
purchase payment to make that allocation on a one-time-only basis.
The allocation procedure mentioned above will apply unless that portion
designated for the DCA Fixed Rate Option is less than $2,000. In that case, we
will use your transfer allocation for the DCA Fixed Rate Option as part of your
allocation instructions until you direct us otherwise.
We will credit the initial purchase payment to your contract within two
business days from the day on which we receive your payment at the Prudential
Annuity Service Center. If, however, your first payment is made without enough
information for us to set up your contract, we may need to contact you to obtain
the required information. If we are not able to obtain this information within
five business days, we will within that five business day period either return
your purchase payment or obtain your consent to continue holding it until we
receive the necessary information. We will generally credit each subsequent
purchase payment as of the business day we receive it in good order at the
Prudential Annuity Service Center. Our business day generally closes at 4:00
p.m. Eastern time.
CREDITS
If you purchase the Contract With Credit, we will add a credit amount to your
contract value with each purchase payment you make. The credit amount is
allocated to the variable or fixed interest rate investment options in the same
percentages as the purchase payment.
The bonus credit that we pay with respect to any purchase payment depends on
(i) the age of the older of the owner or joint owner on the date on which the
purchase payment is made and (ii) the amount of the purchase payment.
Specifically,
- - if the elder owner is 80 or younger on the date that the purchase payment is
made, then we will add a bonus credit to the purchase payment equal to 4% if
the purchase payment is less than $250,000; 5% if the purchase payment is
equal to or greater than $250,000 but less than $1 million; or 6% if the
purchase payment is $1 million or greater; and
- - if the older owner is aged 81-85 on the date that the purchase payment is
made, then we will add a bonus credit equal to 3% of the amount of the
purchase payment.
Under the Contract With Credit, if we pay a death benefit under the contract,
we have a contractual right to take back any credit we applied within one year
of the date of death. If the owner returns the contract during the free look
period, we will recapture bonus credits. However, we will not, unless and until
we obtain SEC exemptive relief, recoup for our own assets the full
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
amount of the 6% bonus credit applicable to purchase payments of $1 million or
greater that we had given to you. Rather, we will recoup an amount equal to the
value of the credit as of the business day on which we receive your request,
less any charges attributable to that credit. We reserve the right to recapture
the entire amount of the credit upon obtaining appropriate approval of the SEC
with regard to that bonus credit.
CALCULATING CONTRACT VALUE
The value of your contract will go up or down depending on the investment
performance of the variable investment options you choose. To determine the
value of your contract, we use a unit of measure called an accumulation unit. An
accumulation unit works like a share of a mutual fund.
Every day we determine the value of an accumulation unit for each of the
variable investment options. We do this by:
1) adding up the total amount of money allocated to a specific investment
option,
2) subtracting from that amount insurance charges and any other applicable
charges such as for taxes, and
3) dividing this amount by the number of outstanding accumulation units.
When you make a purchase payment, we credit your contract with accumulation
units of the subaccount or subaccounts for the investment options you choose. We
determine the number of accumulation units credited to your contract by dividing
the amount of the purchase payment, plus (if you have purchased the Contract
With Credit) any applicable credit, allocated to an investment option by the
unit price of the accumulation unit for that investment option. We calculate the
unit price for each investment option after the New York Stock Exchange closes
each day and then credit your contract. The value of the accumulation units can
increase, decrease, or remain the same from day to day.
We cannot guarantee that your contract value will increase or that it will
not fall below the amount of your total purchase payments. However, we do
guarantee a minimum interest rate of 3% a year, on that portion of the contract
value allocated to the one-year fixed interest-rate option or the DCA Fixed
Interest Rate Option.
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
6:
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC
PARTNERS PLUS CONTRACT?
- --------------------------------------------------------------------------------
THERE ARE CHARGES AND OTHER EXPENSES ASSOCIATED WITH THE CONTRACT THAT REDUCE
THE RETURN ON YOUR INVESTMENT. WE DESCRIBE THESE CHARGES AND EXPENSES BELOW.
INSURANCE AND ADMINISTRATIVE COST
Each day, we make a deduction for the insurance and administrative cost. This
cost covers our expenses for mortality and expense risk, administration,
marketing and distribution. If you choose the guaranteed minimum death benefit
option, the insurance and administrative cost also includes a charge to cover
our assumption of the associated risk. The mortality risk portion of the cost is
for our assumption of the risk that the annuitant(s) will live longer than
expected based on our life expectancy tables. When this happens, we pay a
greater number of annuity payments. The expense risk portion of the cost is for
our assumption of the risk that the current costs will be insufficient in the
future to cover the cost of administering the contract. The administrative
expense portion of the cost compensates us for the expenses associated with the
administration of the contract. This includes preparing and issuing the
contract; establishing and maintaining contract records; preparation of
confirmations and annual reports; personnel costs; legal and accounting fees;
filing fees; and systems costs. The guaranteed minimum death benefit risk
portion of the cost, if applicable, covers our assumption of the risk that the
protected value of the contract will be larger than the base death benefit if
the contract owner dies during the accumulation phase.
If the insurance and administrative cost is not sufficient to cover our
expenses, then we will bear the loss. We do, however, expect to profit from this
cost. The insurance and administrative cost for your contract cannot be
increased. We may use any profits from this cost to pay for the costs of
distributing the contracts. If you choose the Contract With Credit, we will also
use any profits from this charge to recoup our costs of providing the credit.
We calculate the insurance and administrative cost based on the average daily
value of all assets allocated to the variable investment options. These costs
are not assessed against amounts allocated to the fixed interest rate options.
The amount of the cost depends on the death benefit option that you choose. The
cost is equal to:
- 1.40% on an annual basis if you choose the base death benefit, and
- 1.65% on an annual basis if you choose the step-up guaranteed minimum
death benefit option.
We impose an additional insurance and administrative cost of 0.10% annually
(of account value attributable to the variable investment options) for the
Contract with Credit.
CONTRACT MAINTENANCE CHARGE
We do not deduct a contract maintenance charge for administrative expenses while
your contract value is $75,000 or more. If your contract value is less than
$75,000 on a contract anniversary during the accumulation phase or when you make
a full withdrawal, we will deduct $30 (or a lower amount equal to 2% of your
contract value) for administrative expenses. We may raise the level of the
contract value at which we waive this fee. We will deduct this charge
proportionately from each of your contract's investment options.
WITHDRAWAL CHARGE
A withdrawal charge may apply if you make a full or partial withdrawal during
the withdrawal charge period for a purchase payment. The amount and duration of
the withdrawal charge depends on whether you choose the Contract With Credit or
the Contract Without Credit. The withdrawal charge varies with the number of
contract anniversaries that have elapsed since each purchase payment was made.
Specifically, we maintain an "age" for each purchase payment you have made by
keeping track of how many contract anniversaries have passed since the purchase
payment was made.
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6:
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC
PARTNERS PLUS CONTRACT? CONTINUED
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PART II
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The withdrawal charge is the percentage, shown below, of the amount withdrawn.
<Table>
<Caption>
NUMBER OF CONTRACT
ANNIVERSARIES SINCE THE CONTRACT WITHOUT
DATE OF EACH PURCHASE CONTRACT WITH CREDIT CREDIT WITHDRAWAL
PAYMENT WITHDRAWAL CHARGE CHARGE
- ----------------------- -------------------- -----------------
0 8% 7%
1 8% 6%
2 8% 5%
3 8% 4%
4 7% 3%
5 6% 2%
6 5% 1%
7 0% 0%
</Table>
If a withdrawal is effective on the day before a contract anniversary, the
withdrawal charge percentage as of the following contract anniversary will
apply. If you request a withdrawal, we will deduct an amount from the contract
value that is sufficient to pay the withdrawal charge and provide you with the
amount requested.
If you request a full withdrawal, we will provide you with the full amount of
the contract value after making these deductions.
Each contract year, you may withdraw a specified amount of your contract
value without incurring a withdrawal charge. We determine the charge-free amount
available to you in a given contract year on the contract anniversary that
begins that year. In calculating the charge-free amount, we divide purchase
payments into two categories -- payments that are subject to a withdrawal charge
and those that are not. We determine the charge-free amount based only on
purchase payments that are subject to a withdrawal charge. The charge-free
amount in a given contract year is equal to 10% of the sum of all the purchase
payments subject to the withdrawal charge that you have made as of the
applicable contract anniversary. During the first contract year, the charge-free
amount is equal to 10% of the initial purchase payment. When you make a
withdrawal, we will first deduct the amount of the withdrawal from purchase
payments no longer subject to a withdrawal charge, and then from the available
charge-free amount, and will consider purchase payments to be paid out on a
first-in, first-out basis. Withdrawals in excess of the charge-free amount will
come first from purchase payments, also on a first-in, first-out basis, and will
be subject to withdrawal charges, if applicable, even if earnings are available
on the date of the withdrawal. Once you have withdrawn all purchase payments,
additional withdrawals will come from any earnings. We do not impose withdrawal
charges on earnings.
However, if a withdrawal or transfer is taken from a market value adjustment
guarantee period prior to the expiration of the rate guarantee period we will
make a market value adjustment.
If you choose the Contract With Credit and make a withdrawal that is subject
to a withdrawal charge, we may use part of that withdrawal charge to recoup our
costs of providing the credit.
Withdrawal charges will never be greater than permitted by applicable law.
If you surrender your contract, and later change your mind, we may allow you
to reinstate your contract during a limited period of time after the surrender.
For purposes of computing any withdrawal charge on a withdrawal you make after
the reinstatement, we will view the contract as having remained in effect
continuously. The minimal sales costs associated with reinstatements allow us to
offer this administrative option. Reinstatement will not reverse the tax
consequences or tax reporting associated with the surrender. See "What are the
Tax Considerations Associated with the Strategic Partners Plus Contract?" page
40.
MINIMUM DISTRIBUTION REQUIREMENTS
If a withdrawal is taken from a tax qualified contract in order to satisfy an
IRS mandatory distribution requirement only with respect to that contract's
account balance, we will waive withdrawal charges. See "What are the Tax
Considerations Associated with the Strategic Partners Plus Contract?" on page
40.
TAXES ATTRIBUTABLE TO PREMIUM
There are federal premium based taxes applicable to your purchase payment. We
are responsible for the payment of these taxes and may make a deduction from the
value of the contract to pay some or all of these taxes. Some of these taxes are
due when the contract is issued, others are due when the annuity
36
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
payments begin. New York does not currently charge premium taxes on annuities.
It is also our current practice not to deduct a charge for the federal deferred
acquisition costs paid by us that are based on premium received. However, we
reserve the right to charge the contract owner in the future for any such
deferred acquisition costs and any federal, state or local income, excise,
business or any other type of tax measured by the amount of premium received by
us.
TRANSFER FEE
You can make 12 free transfers every contract year. We measure a contract year
from the date we issue your contract, which is the contract date. If you make
more than 12 transfers in a contract year (excluding Dollar Cost Averaging and
Auto-Rebalancing), we will deduct a transfer fee of $25 for each additional
transfer. We will deduct the transfer fee pro-rata from the investment options
from which the transfer is made.
COMPANY TAXES
We will pay the taxes on the earnings of the separate account. We do not
currently charge you for these taxes. We will periodically review the issue of
charging for these taxes and may impose a charge in the future.
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
7:
HOW CAN I
ACCESS MY MONEY?
- --------------------------------------------------------------------------------
YOU CAN ACCESS YOUR MONEY BY:
- - MAKING A WITHDRAWAL (EITHER PARTIAL OR FULL); OR
- - CHOOSING TO RECEIVE ANNUITY PAYMENTS DURING THE INCOME PHASE.
WITHDRAWALS DURING THE ACCUMULATION PHASE
Following the free look period, when you make a full withdrawal, you will
receive the value of your contract minus any applicable charges and fees. We
will calculate the value of your contract and charges, if any, as of the date we
receive your request in good order at the Prudential Annuity Service Center.
Unless you tell us otherwise, we will take any partial withdrawal
proportionately from all of the investment options in which you have invested.
For a partial withdrawal, we will deduct any applicable charges and fees
proportionately from the investment options in your contract. The minimum amount
which may be withdrawn is $250. If you request a withdrawal that would reduce
your total contract fund below the minimum $2,000, we will withdraw the maximum
amount that will not reduce the total contract fund below that amount.
With respect to the variable investment options, we will generally pay the
withdrawal amount, less any required tax withholding, within seven days after we
receive a withdrawal request in good order.
With respect to the market value adjustment option, you may specify the
guarantee period from which you would like to make a withdrawal. If you indicate
that the withdrawal is to originate from the market value adjustment option, but
you do not specify which guarantee period is to be involved, then we will take
the withdrawal from the guarantee period that has the least time remaining until
its maturity date. If you indicate that you wish to make a withdrawal, but do
not specify the investment options to be involved, then we will take the
withdrawal from your contract value on a pro rata basis from each investment
option that you have. In that situation, we will aggregate the contract value in
each of the guarantee periods that you have within the market value adjustment
option for purposes of making that pro rata calculation. The portion of the
withdrawal associated with the market value adjustment option then will be taken
from the guarantee periods with the least amount of time remaining until the
maturity date, irrespective of the original length of the guarantee period. You
should be aware that a withdrawal may avoid a withdrawal charge based on the
charge-free amount that we allow, yet still be subject to a market value
adjustment.
INCOME TAXES, TAX PENALTIES, AND CERTAIN RESTRICTIONS MAY APPLY TO ANY
WITHDRAWAL YOU MAKE. FOR A MORE COMPLETE EXPLANATION, SEE SECTION 8 OF THIS
PROSPECTUS.
AUTOMATED WITHDRAWALS
We offer an automated withdrawal feature. This feature enables you to receive
periodic withdrawals in monthly, quarterly, semiannual, or annual intervals. We
will process your withdrawals at the end of the business day at the intervals
you specify. We will continue at these intervals until you tell us otherwise.
You can make withdrawals from any designated investment option or proportionally
from all investment options (other than a guarantee period within the market
value adjustment option). The minimum automated withdrawal amount you can make
is $100.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO AUTOMATED
WITHDRAWALS. FOR A MORE COMPLETE EXPLANATION, SEE SECTION 8 OF THIS PROSPECTUS.
SUSPENSION OF PAYMENTS OR TRANSFERS
The Securities and Exchange Commission (SEC) may require us to suspend or
postpone payments made in connection with withdrawals or transfers for any
period when:
- - The New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- - Trading on the New York Stock Exchange is restricted;
- - An emergency exists, as determined by the SEC, during which sales and
redemptions of shares of the
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
mutual funds are not feasible or we cannot reasonably value the accumulation
units; or
- - The Securities and Exchange Commission, by order, permits suspension or
postponement of payments for the protection of owners.
We expect to pay the amount of any withdrawal or transfer made from the fixed
interest rate options promptly upon request.
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
8:
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC
PARTNERS PLUS CONTRACT?
- --------------------------------------------------------------------------------
The tax considerations associated with the Strategic Partners Plus contract vary
depending on whether the contract is (i) owned by an individual and not
associated with a tax-favored retirement plan, or (ii) held under a tax-favored
retirement plan. We discuss the tax considerations for these categories of
contracts below. The discussion is general in nature and describes only federal
income tax law (not state or other tax laws). It is based on current law and
interpretations, which may change. It is not intended as tax advice. You should
consult with a qualified tax adviser for complete information and advice.
CONTRACTS OWNED BY INDIVIDUALS (NOT ASSOCIATED WITH TAX-FAVORED RETIREMENT
PLANS)
TAXES PAYABLE BY YOU
We believe the contract is an annuity contract for tax purposes. Accordingly, as
a general rule, you should not pay any tax until you receive money under the
contract.
Generally, annuity contracts issued by the same company (and affiliates) to
you during the same calendar year must be treated as one annuity contract for
purposes of determining the amount subject to tax under the rules described
below.
It is possible that the Internal Revenue Service would assert that some or
all of the charges for the guaranteed minimum death benefit should be treated
for federal income tax purposes as a partial withdrawal from the contract. If
this were the case, the charge for this benefit could be deemed a withdrawal and
treated as taxable to the extent there are earnings in the contract.
Additionally, for owners under age 59 1/2, the taxable income attributable to
the charge for the benefit could be subject to a tax penalty.
If the Internal Revenue Service determines that the deductions for one or
more benefits under the contract -- including, without limitation, the
guaranteed minimum death benefit and any supplemental benefit added by
endorsement -- are taxable withdrawals, then the sole or surviving owner may
cancel the affected benefit(s) within 90 days after notice from us.
TAXES ON WITHDRAWALS AND SURRENDER
If you make a withdrawal from your contract or surrender it before annuity
payments begin, the amount you receive will be taxed as ordinary income, rather
than as return of purchase payments, until all gain has been withdrawn. You will
generally be taxed on any withdrawals from the contract while you are alive even
if the withdrawal is paid to someone else.
If you assign or pledge all or part of your contract as collateral for a
loan, the part assigned will be treated as a withdrawal. Also, if you elect any
interest payment option that we may offer, that election will be treated, for
tax purposes, as surrendering your contract.
If you transfer your contract for less than full consideration, such as by
gift, you will trigger tax on the gain in the contract. This rule does not apply
if you transfer the contract to your spouse or under most circumstances if you
transfer the contract incident to divorce.
It is our position that the guaranteed minimum death benefit and other
contract benefits are an integral part of the annuity contract and accordingly
that the charges made against the annuity contract's cash value for the benefit
should not be treated as distributions subject to income tax. It is possible,
however, that the Internal Revenue Service could take the position that such
charges should be treated as distributions.
TAXES ON ANNUITY PAYMENTS
A portion of each annuity payment you receive will be treated as a partial
return of your purchase payments and will not be taxed. The remaining portion
will be taxed as ordinary income. Generally, the nontaxable portion is
determined by multiplying the annuity payment you receive by a fraction, the
numerator of which is your purchase payments (less any amounts previously
received tax-free) and the denominator of which is the total expected payments
under the contract.
After the full amount of your purchase payments have been recovered tax-free,
the full amount of the annuity payments will be taxable. If annuity payments
stop due to the death of the annuitant before the full amount of your purchase
payments have been recovered, a tax deduction may be allowed for the unrecovered
amount.
40
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
TAX PENALTY ON WITHDRAWALS AND ANNUITY PAYMENTS
Any taxable amount you receive under your contract may be subject to a 10% tax
penalty. Amounts are not subject to this tax penalty if:
- - the amount is paid on or after you reach age 59 1/2 or die;
- - the amount received is attributable to your becoming disabled;
- - the amount paid or received is in the form of level annuity payments not less
frequently than annually under a lifetime annuity;
TAXES PAYABLE BY BENEFICIARIES
All of the death benefit options are subject to income tax to the extent the
distribution exceeds the adjusted basis in the contract and the full value of
the death benefit is included in the owner's estate. Generally, the same tax
rules described above would also apply to amounts received by your beneficiary.
Choosing an annuity payment option instead of a lump sum death benefit may defer
taxes. Certain minimum distribution requirements apply upon your death, as
discussed further below. Tax consequences to the beneficiary vary among the
death benefit payment options.
- - Choice 1: the beneficiary is taxed on earnings in the contract.
- - Choice 2: the beneficiary is taxed as amounts are withdrawn (In this case
earnings are treated as being distributed first).
- - Choice 3: the beneficiary is taxed on each payment (part will be treated as
earnings and part as return of premiums).
REPORTING AND WITHHOLDING ON DISTRIBUTIONS
Taxable amounts distributed from your annuity contracts are subject to federal
and state income tax reporting and withholding. In general, we will withhold
federal income tax from the taxable portion of such distribution based on the
type of distribution. In the case of an annuity or similar periodic payment, we
will withhold as if you are a married individual with 3 exemptions unless you
designate a different withholding status. In the case of all other
distributions, we will withhold at a 10% rate. You may generally elect not to
have tax withheld from your payments. An election out of withholding must be
made on forms that we provide.
State income tax withholding rules vary and we will withhold based on the
rules of your State of residence. Special tax rules apply to withholding for
nonresident aliens, and we generally withhold income tax for nonresident aliens
at a 30% rate. A different withholding rate may be applicable to a nonresident
alien based on the terms of an existing income tax treaty between the United
States and the nonresident alien's country. Please refer to the CONTRACTS HELD
BY TAX FAVORED PLANS section for withholding rules for tax favored plans (for
example, an IRA).
Regardless of the amount withheld by us, you are liable for payment of
federal and state income tax on the taxable portion of annuity distributions.
You should consult with your tax advisor regarding the payment of the correct
amount of these income taxes and potential liability if you fail to pay such
taxes.
ANNUITY QUALIFICATION
Diversification And Investor Control In order to qualify for the tax rules
applicable to annuity contracts described above, the contract must be an annuity
contract for tax purposes. This means that the assets underlying the annuity
contract must be diversified, according to certain rules. It also means that we,
and not you as the contract-owner, must have sufficient control over the
underlying assets to be treated as the owner of the underlying assets for tax
purposes. We believe these rules, which are further discussed in the Statement
of Additional Information, will be met.
Required Distributions Upon Your Death Upon your death, certain distributions
must be made under the contract. The required distributions depend on whether
you die before you start taking annuity payments under the contract or after you
start taking annuity payments under the contract.
If you die on or after the annuity date, the remaining portion of the
interest in the contract must be distributed at least as rapidly as under the
method of distribution being used as of the date of death.
If you die before the annuity date, the entire interest in the contract must
be distributed within 5 years after
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PART II
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the date of death. However, if an annuity payment option is selected by your
designated beneficiary and if annuity payments begin within 1 year of your
death, the value of the contract may be distributed over the beneficiary's life
or a period not exceeding the beneficiary's life expectancy. Your designated
beneficiary is the person to whom benefit rights under the contract pass by
reason of death, and must be a natural person in order to elect an annuity
payment option based on life expectancy or a period exceeding five years.
If any portion of the contract is payable to (or for the benefit of) your
surviving spouse, that portion of the contract may be continued with your spouse
as the owner.
Changes In The Contract We reserve the right to make any changes we deem
necessary to assure that the contract qualifies as an annuity contract for tax
purposes. Any such changes will apply to all contract owners and you will be
given notice to the extent feasible under the circumstances.
ADDITIONAL INFORMATION
You should refer to the Statement of Additional Information if:
- - The contract is held by a corporation or other entity instead of by an
individual or as agent for an individual.
- - Your contract was issued in exchange for a contract containing purchase
payments made before August 14, 1982.
- - You transfer your contract to, or designate, a beneficiary who is either
37 1/2 years younger than you or a grandchild.
CONTRACTS HELD BY TAX FAVORED PLANS
The following discussion covers annuity contracts held under tax-favored
retirement plans. Currently, the contract may be purchased for use in connection
with individual retirement accounts and annuities (IRAs) which are subject to
Sections 408(a), 408(b) and 408A of the Internal Revenue Code of 1986, as
amended (Code). This description assumes that you have satisfied the
requirements for eligibility for these products.
YOU SHOULD BE AWARE THAT TAX FAVORED PLANS SUCH AS IRAS GENERALLY PROVIDE TAX
DEFERRAL REGARDLESS WHETHER THEY INVEST IN ANNUITY CONTRACTS. THIS MEANS THAT
WHEN A TAX FAVORED PLAN INVESTS IN AN ANNUITY CONTRACT, IT GENERALLY DOES NOT
RESULT IN ANY ADDITIONAL TAX DEFERRAL BENEFITS.
TYPES OF TAX FAVORED PLANS
IRAs If you buy a contract for use as an IRA, we will provide you a copy of
the prospectus and contract. The "IRA Disclosure Statement" on page 50 contains
information about eligibility, contribution limits, tax particulars, and other
IRA information. In addition to this information (some of which is summarized
below), the IRS requires that you have a "free look" after making an initial
contribution to the contract. During this time, you can cancel the contract by
notifying us in writing, and we will refund all of the purchase payments under
the contract (or, if provided by applicable state law, the amount credited under
the contract, calculated as of the date that we receive this cancellation
notice, if greater), less any applicable federal and state income tax
withholding.
Contributions Limits/Rollovers: Because of the way the contract is designed,
you may only purchase a contract for an IRA in connection with a "rollover" of
amounts from a qualified retirement plan or transfer from another IRA. You must
make a minimum initial payment of $10,000 to purchase a contract. This minimum
is greater than the maximum amount of any annual contribution allowed by law you
may make to an IRA. For 2002 to 2004 the limit is $3,000; increasing in 2005 to
2007, to $4,000; and for 2008, $5,000. After 2008 the contribution amount will
be indexed for inflation. The tax law also provides for a catch-up provision for
individuals who are age 50 and above. These taxpayers will be permitted to
contribute an additional $500 in years 2002 to 2005 and an additional $1,000 in
2006 and years thereafter). The "rollover" rules under the Code are fairly
technical; however, an individual (or his or her surviving spouse) may generally
"roll over" certain distributions from tax favored retirement plans (either
directly or within 60 days from the date of these distributions) if he or she
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STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
meets the requirements for distribution. Once you buy the contract, you can make
regular IRA contributions under the contract (to the extent permitted by law).
However, if you make such regular IRA contributions, you should note that you
will not be able to treat the contract as a "conduit IRA," which means that you
will not retain possible favorable tax treatment if you subsequently "roll over"
the contract funds originally derived from a qualified retirement plan or TDA
into another Section 401(a) plan or TDA.
Required Provisions: Contracts that are IRAs (or endorsements that are part
of the contract) must contain certain provisions:
- - You, as owner of the contract, must be the "annuitant" under the contract
(except in certain cases involving the division of property under a decree of
divorce);
- - Your rights as owner are non-forfeitable;
- - You cannot sell, assign or pledge the contract, other than to Pruco Life of
New Jersey;
- - The annual premium you pay cannot be greater than the maximum amount allowed
by law, including catch-up contributions if applicable (which does not
include any rollover amounts);
- - The date on which annuity payments must begin cannot be later than the April
1st of the calendar year after the calendar year you turn age 70 1/2; and
- - Death and annuity payments must meet "minimum distribution requirements"
(described below).
Usually, the full amount of any distribution from an IRA (including a
distribution from this contract) which is not a rollover is taxable. As taxable
income, these distributions are subject to the general tax withholding rules
described earlier. In addition to this normal tax liability, you may also be
liable for the following, depending on your actions:
- - A 10% "early distribution penalty" (described below);
- - Liability for "prohibited transactions" if you, for example, borrow against
the value of an IRA; or
- - Failure to take a minimum distribution (also generally described below).
ROTH IRAs Congress amended the Code in 1997 to add a new Section 408A,
creating the "Roth IRA" as a new type of individual retirement plan. Like
standard IRAs, income within a Roth IRA accumulates tax-free, and contributions
are subject to specific limits. Roth IRAs have, however, the following
differences:
- - Contributions to a Roth IRA cannot be deducted from your gross income;
- - "Qualified distributions" (generally, held for 5 tax years and payable on
account of death, disability, attainment of age 59 1/2, or first
time-homebuyer) from Roth IRAs are excludable from your gross income; and
- - If eligible, you may make contributions to a Roth IRA after attaining age
70 1/2, and distributions are not required to begin upon attaining such age
or at any time thereafter.
Because the contract's minimum initial payment of $10,000 is greater than the
maximum annual contribution permitted to be made to a Roth IRA, you may purchase
a contract as a Roth IRA only in connection with a "rollover" or "conversion" of
the proceeds of another traditional IRA, conduit IRA, SEP, SIMPLE-IRA, or Roth
IRA. The Code permits persons who meet certain income limitations (generally,
adjusted gross income under $100,000), and who receive certain qualifying
distributions from such non-Roth IRAs, to directly rollover or make, within 60
days, a "rollover" of all or any part of the amount of such distribution to a
Roth IRA which they establish. This conversion triggers current taxation (but is
not subject to a 10% early distribution penalty). Once the contract has been
purchased, regular Roth IRA contributions will be accepted to the extent
permitted by law.
MINIMUM DISTRIBUTION REQUIREMENTS AND PAYMENT OPTION
If you hold the contract under an IRA (or other tax-favored plan), IRS minimum
distribution requirements must be satisfied. This means that payments must start
by April 1 of the year after the year you reach age 70 1/2 and must be made for
each year thereafter. The amount of the payment must at least equal the
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PART II
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minimum required under the IRS rules. Several choices are available for
calculating the minimum amount, including a new method permitted under IRS
regulations released in April 2002. More information on the mechanics of this
calculation is available on request. Please contact us a reasonable time before
the IRS deadline so that a timely distribution is made. Please note that there
is a 50% IRS penalty tax on the amount of any minimum distribution not made in a
timely manner.
You can use the Minimum Distribution option to satisfy the IRS minimum
distribution requirements for this contract without either beginning annuity
payments or surrendering the contract. We will send you a check for this minimum
distribution amount, less any other partial withdrawals that you made during the
year. Please note that the Minimum Distribution option may need to be modified
to satisfy recently announced changes in IRS rules.
PENALTY FOR EARLY WITHDRAWALS
You may owe a 10% tax penalty on the taxable part of distributions received from
an IRA, SEP, SIMPLE-IRA (which may increase to 25%), Roth IRA, TDA or qualified
retirement plan before you attain age 59 1/2. There are only limited exceptions
to this tax, and you should consult your tax adviser for further details.
WITHHOLDING
Unless a distribution is an eligible rollover distribution that is "directly"
rolled over into another qualified plan, IRA (including the IRA variations
described above), SEP, 457 government plan or TDA, we will withhold at the rate
of 20%. This 20% withholding does not apply to distributions from IRAs and Roth
IRAs. For all other distributions, unless you elect otherwise, we will withhold
federal income tax from the taxable portion of such distribution at an
appropriate percentage. The rate of withholding on annuity payments where no
mandatory withholding is required is determined on the basis of the withholding
certificate that you file with us. If you do not file a certificate, we will
automatically withhold federal taxes on the following basis:
- - For any annuity payments not subject to mandatory withholding, you will have
taxes withheld by us as if you are a married individual, with 3 exemptions;
and
- - For all other distributions, we will withhold at a 10% rate.
We will provide you with forms and instructions concerning the right to elect
that no amount be withheld from payments in the ordinary course. However, you
should know that, in any event, you are liable for payment of federal income
taxes on the taxable portion of the distributions, and you should consult with
your tax advisor to find out more information on your potential liability if you
fail to pay such taxes.
ERISA DISCLOSURE/REQUIREMENTS
ERISA (the "Employee Retirement Income Security Act of 1974") and the Code
prevents a fiduciary and other "parties in interest" with respect to a plan
(and, for these purposes, an IRA would also constitute a "plan") from receiving
any benefit from any party dealing with the plan, as a result of the sale of the
contract. Administrative exemptions under ERISA generally permit the sale of
insurance/annuity products to plans, provided that certain information is
disclosed to the person purchasing the contract. This information has to do
primarily with the fees, charges, discounts and other costs related to the
contract, as well as any commissions paid to any agent selling the contract.
Information about any applicable fees, charges, discounts, penalties or
adjustments may be found under "What are the Expenses Associated with the
Strategic Partners Plus Contract" starting on page 35.
Information about sales representatives and commissions may be found under
"Other Information" and "Sale and Distribution of the Contract" on page 46.
In addition, other relevant information required by the exemptions is
contained in the contract and
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
accompanying documentation. Please consult your tax advisor if you have any
additional questions.
SPOUSAL CONSENT RULES FOR RETIREMENT PLANS -- QUALIFIED CONTRACTS
If you are married at the time your payments commence, you may be required by
federal law to choose an income option that provides survivor annuity income to
your spouse, unless your spouse waives that right. Similarly, if you are married
at the time of your death, federal law may require all or a portion of the death
benefit to be paid to your spouse, even if you designated someone else as your
beneficiary. A brief explanation of the applicable rules follows. For more
information, consult the terms of your retirement arrangement.
Defined Benefit Plans, Money Purchase Pension Plans, and ERISA 403(b)
Annuities. If you are married at the time your payments commence, federal law
requires that benefits be paid to you in the form of a "qualified joint and
survivor annuity" ("QJSA"), unless you and your spouse waive that right, in
writing. Generally, this means that you will receive a reduced payment during
your life and, upon your death, your spouse will receive at least one-half of
what you were receiving for life. You may elect to receive another income option
if your spouse consents to the election and waives his or her right to receive
the QJSA. If your spouse consents to the alternative form of payment, your
spouse may not receive any benefits from the plan upon your death. Federal law
also requires that the plan pay a death benefit to your spouse if you are
married and die before you begin receiving your benefit. This benefit must be
available in the form of an annuity for your spouse's lifetime and is called a
"qualified pre-retirement survivor annuity" ("QPSA"). If the plan pays death
benefits to other beneficiaries, you may elect to have a beneficiary other than
your spouse receive the death benefit, but only if your spouse consents to the
election and waives his or her right to receive the QPSA. If your spouse
consents to the alternate beneficiary, your spouse will receive no benefits from
the plan upon your death. Any QPSA waiver prior to your attaining age 35 will
become null and void on the first day of the calendar year in which you attain
age 35, if still employed.
Defined Contribution Plans (including 401(k) Plans). Spousal consent to a
distribution is generally not required. Upon your death, your spouse will
receive the entire death benefit, even if you designated someone else as your
beneficiary, unless your spouse consents in writing to waive this right. Also,
if you are married and elect an annuity as a periodic income option, federal law
requires that you receive a QJSA (as described above), unless you and your
spouse consent to waive this right.
IRAs, non-ERISA 403(b) Annuities, and 457 Plans. Spousal consent to a
distribution is not required. Upon your death, any death benefit will be paid to
your designated beneficiary.
ADDITIONAL INFORMATION
For additional information about federal tax law requirements applicable to tax
favored plans, see the "IRA Disclosure Statement" on page 50.
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
9:
OTHER
INFORMATION
- --------------------------------------------------------------------------------
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Pruco Life Insurance Company of New Jersey (Pruco Life of New Jersey) is a stock
life insurance company organized in 1982 under the laws of the State of New
Jersey. It is licensed to sell life insurance and annuities in New Jersey and
New York, and accordingly is subject to the laws of each of those states.
Pruco Life of New Jersey is an indirect, wholly-owned subsidiary of The
Prudential Insurance Company of America (Prudential), a New Jersey stock life
insurance company doing business since 1875. Prudential is an indirect
wholly-owned subsidiary of Prudential Financial, Inc. (Prudential Financial), a
New Jersey insurance holding company. As Pruco Life of New Jersey's ultimate
parent, Prudential Financial exercises significant influence over the operations
and capital structure of Pruco Life of New Jersey and Prudential. However,
neither Prudential Financial, Prudential, nor any other related company has any
legal responsibility to pay amounts that Pruco Life of New Jersey may owe under
the contract.
Pruco Life of New Jersey publishes annual and quarterly reports that are
filed with the SEC. These reports contain financial information about Pruco Life
of New Jersey that is annually audited by independent accountants. Pruco Life of
New Jersey's annual report for the year ended December 31, 2002, together with
subsequent periodic reports that Pruco Life of New Jersey files with the SEC,
are incorporated by reference into this prospectus. You can obtain copies, at no
cost, of any and all of this information, including the Pruco Life of New Jersey
annual report that is not ordinarily mailed to contractholders, the more current
reports and any subsequently filed documents at no cost by contacting us at the
address or telephone number listed on the cover. You may read and copy any
filings made by Pruco Life of New Jersey with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, Washington, D.C. 20549. You can obtain
information on the operation of the Public Reference Room by calling
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC at http://www.sec.gov.
THE SEPARATE ACCOUNT
We have established a separate account, the Pruco Life of New Jersey Flexible
Premium Variable Annuity Account (the "separate account"), to hold the assets
that are associated with the contracts. The separate account was established
under New Jersey law on May 20, 1996, and is registered with the U.S. Securities
and Exchange Commission under the Investment Company Act of 1940 as a unit
investment trust, which is a type of investment company. The assets of the
separate account are held in the name of Pruco Life of New Jersey and legally
belong to us. These assets are kept separate from all of our other assets and
may not be charged with liabilities arising out of any other business we may
conduct. More detailed information about Pruco Life of New Jersey, including its
audited financial statements, appears in the Statement of Additional
Information.
RISK FACTORS
There are various risks associated with the purchase of the market value
adjustment option that we summarize below.
ISSUER RISK. Your market value adjustment option is issued by Pruco Life of
New Jersey, and thus is backed by the financial strength of that company. If
Pruco Life of New Jersey were to experience significant financial adversity, it
is possible that Pruco Life of New Jersey's ability to pay interest and
principal under the market value adjustment option could be impaired.
RISKS RELATED TO CHANGING INTEREST RATES. You do not participate directly in
the investment experience of the bonds and other instruments that Pruco Life of
New Jersey holds to support the market value adjustment option. Nonetheless, the
market value adjustment formula (which is detailed in the appendix to this
prospectus) reflects the effect that prevailing interest rates have on those
bonds and other instruments. If you need to withdraw your money during a period
in which prevailing interest rates have risen above their level when you made
your purchase, you will experience a "negative" market value adjustment. When we
impose this market value adjustment, it could result in the loss of both the
interest you have earned and a portion of your purchase payments. Thus, before
you commit to a particular guarantee period, you should consider carefully
whether you have the ability to remain in the contract throughout the guarantee
period. In addition, we cannot, of course, assure you that the market value
adjustment option will perform better than another investment that you might
have made.
RISKS RELATED TO THE WITHDRAWAL CHARGE. We impose withdrawal charges under
the variable annuities that offer the market value adjustment option as a
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
companion option. If you anticipate needing to withdraw your money prior to the
end of a guarantee period, you should be prepared to pay the withdrawal charge
that we will impose.
SALE AND DISTRIBUTION OF THE CONTRACT
Prudential Investment Management Services LLC ("PIMS"), 100 Mulberry Street,
Newark, New Jersey 07102-4077, acts as the distributor of the contracts under a
"best efforts" underwriting agreement with Pruco Life of New Jersey under which
PIMS is reimbursed for its costs and expenses. PIMS is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. and is a limited liability corporation
organized under Delaware law in 1996. It is a registered broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc.
We pay the broker-dealer whose registered representatives sell the contract
either:
- - a commission of up to 8% of your purchase payments; or
- - a combination of a commission on purchase payments and a "trail"
commission -- which is a commission determined as a percentage of your
contract value that is paid periodically over the life of your contract.
The commission amount quoted above is the maximum amount which is paid. In most
circumstances, the registered representative who sold the contract will receive
significantly less.
From time to time, Prudential or its affiliates may offer and pay non-cash
compensation to registered representatives who sell the contract. For example,
Prudential or an affiliate may pay for a training and education meeting that is
attended by registered representatives of both Prudential-affiliated broker-
dealers and independent broker-dealers. Prudential and its affiliates retain
discretion as to which broker-dealers to offer non-cash (and cash) compensation
arrangements, and will comply with NASD rules and other pertinent laws in making
such offers and payments. Our payment of cash or non-cash compensation in
connection with sales of the contract does not result directly in any additional
charge to you.
ASSIGNMENT
You can assign the contract at any time during your lifetime. If you do so, we
will reset the death benefit to equal the contract value on the date the
assignment occurs. For details, see "What is the Death Benefit," on page 30. We
will not be bound by the assignment until we receive written notice. We will not
be liable for any payment or other action we take in accordance with the
contract if that action occurs before we receive notice of the assignment. An
assignment, like any other change in ownership, may trigger a taxable event.
If the contract is issued under a qualified plan, there may be limitations on
your ability to assign the contract. For further information please speak to
your representative.
FINANCIAL STATEMENTS
The financial statements of the separate account associated with Strategic
Partners Plus are included in the Statement of Additional Information.
STATEMENT OF ADDITIONAL INFORMATION
Contents:
- - Company
- - Experts
- - Litigation
- - Principal Underwriter
- - Determination of Accumulation Unit Values
- - Performance Information
- - Comparative Performance Information and Advertising
- - Federal Tax Status
- - Directors and Officers
- - Financial Statements
HOUSEHOLDING
To reduce costs, we now send only a single copy of prospectuses and shareholder
reports to each consenting household, in lieu of sending a copy to each
contractholder that resides in the household. If you are a member of such a
household, you should be aware that you can revoke your consent to householding
at any time, and begin to receive your own copy of prospectuses and shareholder
reports, by calling 1-877-778-5008.
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MARKET-VALUE
ADJUSTMENT FORMULA
- --------------------------------------------------------------------------------
MARKET-VALUE ADJUSTMENT FORMULA
The general formula under which Pruco Life of New Jersey calculates the market
value adjustment applicable to a full or partial surrender, annuitization, or
settlement under Strategic Partners Plus Annuity is set forth below. The market
value adjustment is expressed as a multiplier factor. That is, the Contract
Value after the market value adjustment ("MVA"), but before any surrender
charge, is as follows: Contract Value (after MVA) = Contract Value (before MVA)
X (1 + MVA). The MVA itself is calculated as follows:
1 + I
MVA = (-------------)to the N/12 power -1
1 + J + .0025
<Table>
where: I = the guaranteed credited interest rate
(annual effective) for the given
contract at the time of withdrawal or
annuitization or settlement.
J = the interpolated current credited
interest rate offered on new money at
the time of withdrawal,
annuitization, or settlement. (See
below for the interpolation formula)
N = equals the remaining number of months
in the contract's current guarantee
period (rounded up) at the time of
withdrawal or annuitization or
settlement.
</Table>
The MVA formula with respect to contracts issued in New York is what is depicted
above. The formula uses an interpolated rate "J" as the current credited
interest rate. Specifically, "J" is the interpolated current credited interest
rate offered on new money at the time of withdrawal, annuitization, or
settlement. The interpolated value is calculated using the following formula:
m/365 X (n + 1) year rate + (365 - m)/365 X n year rate,
where "n" equals the number of whole years remaining in the Contract's current
guarantee period, and "m" equals the number of days remaining in year "n" of the
current guarantee period.
MARKET VALUE ADJUSTMENT EXAMPLE
The following will illustrate the application of the Market Value Adjustment.
For simplicity, surrender charges are ignored in this example.
Positive market value adjustment
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2002. At the time, the Contract
Value will have accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
- - On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
period of 3 years (the number of whole years remaining) is 4%, and for a
guarantee period of 4 years (the number of whole years remaining plus 1) is
5%.
The following computations would be made:
1) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = [(61/365) X 0.05] + [((365-61)/365) X 0.04] =
0.0417
</Table>
The MVA factor calculation would be: [(1.06)/(1.0417 + 0.0025)] to the
(38/12) power-1 = 0.04902
2) Multiply the Contract Value by the factor calculated in Step 1.
$11,127.11 X 0.04902 = $545.45
3) Add together the Market Value Adjustment and the Contract Value to get the
total Contract Surrender Value.
$11,127.11 + $545.45 = $11,672.56
The MVA may not always be positive. Here is an example where it is negative.
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2002. At the time, the Contract
Value will have accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
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- - On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
period of 3 years (the number of whole years remaining) is 7%, and for a
guarantee period of 4 years (the number of whole years remaining plus 1) is
8%.
The following computations would be made:
1) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = [(61/365) X 0.08] + [((365 - 61)/365) X 0.07] =
0.0717
</Table>
The MVA factor calculation would be: [(1.06)/(1.0717 + 0.0025)] to the
(38/12) power-1 = -0.04098
2) Multiply the Contract Value by the factor calculated in Step 1.
$11,127.11 X (-0.04098) = -$455.99
3) Add together the Market Value Adjustment and the Contract Value to get the
total Contract Surrender Value.
$11,127.11 + (-$455.99) = $10,671.12
49
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
IRA DISCLOSURE STATEMENT
- --------------------------------------------------------------------------------
This statement is designed to help you understand the requirements of federal
tax law which apply to your individual retirement annuity (IRA), your Roth IRA,
your simplified employee pension IRA (SEP) for employer contributions, your
Savings Incentive Match Plan for Employees (SIMPLE) IRA, or to one you purchase
for your spouse. You can obtain more information regarding your IRA either from
your sales representative or from any district office of the Internal Revenue
Service. Those are federal tax law rules; state tax laws may vary.
FREE LOOK PERIOD
The annuity contract offered by this prospectus gives you the opportunity to
return the contract for a full refund (less any applicable federal and state
income tax withholding) within 10 days (or whatever period is required by
applicable state law) after it is delivered. This is a more liberal provision
than is required in connection with IRAs. To exercise this "free-look"
provision, return the contract to the representative who sold it you or to the
Prudential Annuity Service Center at the address shown on the first page of this
prospectus.
ELIGIBILITY REQUIREMENTS
IRAs are intended for all persons with earned compensation whether or not they
are covered under other retirement programs. Additionally, if you have a
non-working spouse (and you file a joint tax return), you may establish an IRA
on behalf of your non-working spouse. A working spouse may establish his or her
own IRA. A divorced spouse receiving taxable alimony (and no other income) may
also establish an IRA.
CONTRIBUTIONS AND DEDUCTIONS
Contributions to your IRA will be deductible if you are not an "active
participant" in an employer maintained qualified retirement plan or you have
"Adjusted Gross Income" (as defined under Federal tax laws) which does not
exceed the "applicable dollar limit." IRA (or SEP) contributions must be made by
no later than the due date for filing your income tax return for that year,
excluding extensions (generally by April 15th). For a single taxpayer, the
applicable dollar limitation is $40,000 in 2003, with the amount of IRA
contribution which may be deducted reduced proportionately for Adjusted Gross
Income between $40,000 -- $50,000. For married couples filing jointly, the
applicable dollar limitation is $60,000, with the amount of IRA contribution
which may be deducted reduced proportionately for Adjusted Gross Income between
$60,000 -- $70,000. There is no deduction allowed for IRA contributions when
Adjusted Gross Income reaches $50,000 for individuals and $70,000 for married
couples filing jointly. Income limits are scheduled to increase until 2006 for
single taxpayers and 2007 for married taxpayers.
Contributions made by your employer to your SEP are excludable from your
gross income for tax purposes in the calendar year for which the amount is
contributed. Certain employees who participate in a SEP will be entitled to
elect to have their employer make contributions to their SEP on their behalf or
to receive the contributions in cash. If the employee elects to have
contributions made on the employee's behalf to the SEP, those funds are not
treated as current taxable income to the employee. Elective deferrals under a
SEP are limited to $12,000 in 2003, with a permitted catch-up contribution of
$2,000 for individuals age 50 and above. Contribution limits and catch-up
contribution limits are scheduled to increase through 2006 and are indexed for
inflation thereafter. Salary-reduction SEPs (also called "SARSEPs") are
available only if at least 50% of the employees elect to have amounts
contributed to the SARSEP and if the employer has 25 or fewer employees at all
times during the preceding year. New SARSEPs may not be established after 1996.
The IRA maximum annual contribution is limited to the lesser of: (1) the
maximum amount allowed by law, including catch-up contributions if applicable,
or (2) 100% of your earned compensation. Contributions in excess of these limits
may be subject to penalty. See below.
Under a SEP agreement, the maximum annual contribution which your employer
may make on your behalf to a SEP contract that is excludable from your income is
the lesser of 25% of your salary or $40,000.
50
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
An employee who is a participant in a SEP agreement may make after-tax
contributions to the SEP contract, subject to the contribution limits applicable
to IRAs in general. Those employee contributions will be deductible subject to
the deductibility rules described above.
The maximum tax deductible annual contribution that a divorced spouse with no
other income may make to an IRA is the lesser of (1) the maximum amount allowed
by law, including catch-up contributions if applicable or (2) 100% of taxable
alimony.
If you or your employer should contribute more than the maximum contribution
amount to your IRA or SEP, the excess amount will be considered an "excess
contribution." You are permitted to withdraw an excess contribution from your
IRA or SEP before your tax filing date without adverse tax consequences. If,
however, you fail to withdraw any such excess contribution before your tax
filing date, a 6% excise tax will be imposed on the excess for the tax year of
contribution.
Once the 6% excise tax has been imposed, an additional 6% penalty for the
following tax year can be avoided if the excess is (1) withdrawn before the end
of the following year, or (2) treated as a current contribution for the
following year. (See Premature Distributions below for penalties imposed on
withdrawal when the contribution exceeds the maximum amount allowed by law,
including catch-up contributions if applicable.)
IRA FOR NON-WORKING SPOUSE
If you establish an IRA for yourself, you may also be eligible to establish an
IRA for your "non-working" spouse. In order to be eligible to establish such a
spousal IRA, you must file a joint tax return with your spouse and, if your
non-working spouse has compensation, his/her compensation must be less than your
compensation for the year. Contributions of up to the maximum amount allowed by
law, including catch-up contributions if applicable, may be made to your IRA and
the spousal IRA if the combined compensation of you and your spouse is at least
equal to the amount contributed. If requirements for deductibility (including
income levels) are met, you will be able to deduct an amount equal to the least
of (i) the amount contributed to the IRAs; (ii) twice the maximum amount allowed
by law, including catch-up contributions if applicable; or (iii) 100% of your
combined gross income.
Contributions in excess of the contribution limits may be subject to penalty.
See page 50 under "Contributions and Deductions." If you contribute more than
the allowable amount, the excess portion will be considered an excess
contribution. The rules for correcting it are the same as discussed above for
regular IRAs.
Other than the items mentioned in this section, all of the requirements
generally applicable to IRAs are also applicable to IRAs established for
non-working spouses.
ROLLOVER CONTRIBUTION
Once every year, you are permitted to withdraw any portion of the value of your
IRA or SEP and reinvest it in another IRA or bond. Withdrawals may also be made
from other IRAs and contributed to this contract. This transfer of funds from
one IRA to another is called a "rollover" IRA. To qualify as a rollover
contribution, the entire portion of the withdrawal must be reinvested in another
IRA within 60 days after the date it is received. You will not be allowed a
tax-deduction for the amount of any rollover contribution.
A similar type of rollover to an IRA can be made with the proceeds of a
qualified distribution from a qualified retirement plan or tax-sheltered
annuity. Properly made, such a distribution will not be taxable until you
receive payments from the IRA created with it. You may later roll over such a
contribution to another qualified retirement plan. (You may roll less than all
of a qualified distribution into an IRA, but any part of it not rolled over will
be currently includable in your income without any capital gains treatment.)
Funds can also be rolled over from an IRA or SEP to another IRA or SEP or to
another qualified retirement plan or 457 government plan.
DISTRIBUTIONS
(a) PREMATURE DISTRIBUTIONS
At no time can your interest in your IRA or SEP be forfeited. To insure that
your contributions will be used
51
IRA DISCLOSURE STATEMENT CONTINUED
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
for retirement, the federal tax law does not permit you to use your IRA or SEP
as security for a loan. Furthermore, as a general rule, you may not sell or
assign your interest in your IRA or SEP to anyone. Use of an IRA (or SEP) as
security or assignment of it to another will invalidate the entire annuity. It
then will be includable in your income in the year it is invalidated and will be
subject to a 10% tax penalty if you are not at least age 59 1/2 or totally
disabled. (You may, however, assign your IRA or SEP without penalty to your
former spouse in accordance with the terms of a divorce decree.)
You may surrender any portion of the value of your IRA (or SEP). In the case
of a partial surrender which does not qualify as a rollover, the amount
withdrawn will be includable in your income and subject to the 10% penalty if
you are not at least age 59 1/2 or totally disabled unless you comply with
special rules requiring distributions to be made at least annually over your
life expectancy.
The 10% tax penalty does not apply to the withdrawal of an excess
contribution as long as the excess is withdrawn before the due date of your tax
return. Withdrawals of excess contributions after the due date of your tax
return will generally be subject to the 10% penalty unless the excess
contribution results from erroneous information from a plan trustee making an
excess rollover contribution or unless you are over age 59 1/2 or are disabled.
(b) DISTRIBUTION AFTER AGE 59 1/2
Once you have attained age 59 1/2 (or have become totally disabled), you may
elect to receive a distribution of your IRA (or SEP) regardless of when you
actually retire. In addition, you must commence distributions from your IRA by
April 1 following the year you attain age 70 1/2. You may elect to receive the
distribution under any one of the periodic payment options available under the
contract. The distributions from your IRA under any one of the periodic payment
options or in one sum will be treated as ordinary income as you receive them to
the degree that you have made deductible contributions. If you have made both
deductible and nondeductible contributions, the portion of the distribution
attributable to the nondeductible contribution will be tax-free.
(c) INADEQUATE DISTRIBUTIONS--50% TAX
Your IRA or SEP is intended to provide retirement benefits over your lifetime.
Thus, federal tax law requires that you either (1) receive a lump-sum
distribution of your IRA by April 1 of the year following the year in which you
attain age 70 1/2 or (2) start to receive periodic payments by that date. If you
elect to receive periodic payments, those payments must be sufficient to pay out
the entire value of your IRA during your life expectancy (or over the joint life
expectancies of you and your spouse/beneficiary). The calculation method is
revised under the IRS regulations issued in April 2002 for distributions
beginning in 2003 and were optional for distributions in 2002. If the payments
are not sufficient to meet these requirements, an excise tax of 50% will be
imposed on the amount of any underpayment.
(d) DEATH BENEFITS
If you (or your surviving spouse) die before receiving the entire value of your
IRA (or SEP), the remaining interest must be distributed to your beneficiary (or
your surviving spouse's beneficiary) in one lump-sum by December 31st of the
fifth year after your (or your surviving spouse's) death, or applied to purchase
an immediate annuity for the beneficiary. This annuity must be payable over the
life expectancy of the beneficiary beginning by December 31st of the year
following the year after your or your spouse's death. If your spouse is the
designated beneficiary, he or she is treated as the owner of the IRA. If minimum
required distributions have begun, and no designated beneficiary is identified
by December 31st of the year following the year of death, the entire amount must
be distributed based on the life expectancy of the owner using the owner's age
prior to death. A distribution of the balance of your IRA upon your death will
not be considered a gift for federal tax purposes, but will be included in your
gross estate for purposes of federal estate taxes.
52
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PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
ROTH IRAS
Section 408A of the Code permits eligible individuals to contribute to a type of
IRA known as a "Roth IRA." Contributions may be made to a Roth IRA by taxpayers
with adjusted gross incomes of less than $160,000 for married individuals filing
jointly and less than $110,000 for single individuals. Married individuals
filing separately are not eligible to contribute to a Roth IRA. The maximum
amount of contributions allowable for any taxable year to all IRAs maintained by
an individual is generally the lesser of the maximum amount allowed by law and
100% of compensation for that year (the maximum amount allowed by law is phased
out for incomes between $150,000 and $160,000 for married and between $95,000
and $110,000 for singles). The contribution limit is reduced by the amount of
any contributions made to a traditional IRA. Contributions to a Roth IRA are not
deductible.
For taxpayers with adjusted gross income of $100,000 or less, all or part of
amounts in a traditional IRA may be converted, transferred or rolled over to a
Roth IRA. Some or all of the IRA value will typically be includable in the
taxpayer's gross income. Provided a rollover contribution meets the requirements
of IRAs under Section 408(d)(3) of the Code, a rollover may be made from a Roth
IRA to another Roth IRA.
UNDER SOME CIRCUMSTANCES, IT MAY NOT BE ADVISABLE TO ROLL OVER, TRANSFER OR
CONVERT ALL OR PART OF A TRADITIONAL IRA TO A ROTH IRA. PERSONS CONSIDERING A
ROLLOVER, TRANSFER OR CONVERSION SHOULD CONSULT THEIR OWN TAX ADVISOR.
"Qualified distributions" from a Roth IRA are excludable from gross income. A
"qualified distribution" is a distribution that satisfies two requirements: (1)
the distribution must be made (a) after the owner of the IRA attains age 59 1/2;
(b) after the owner's death; (c) due to the owner's disability; or (d) for a
qualified first time homebuyer distribution within the meaning of Section
72(t)(2)(F) of the Code; and (2) the distribution must be made in the year that
is at least five tax years after the first year for which a contribution was
made to any Roth IRA established for the owner or five years after a rollover,
transfer, or conversion was made from a traditional IRA to a Roth IRA.
Distributions from a Roth IRA that are not qualified distributions will be
treated as made first from contributions and then from earnings, and taxed
generally in the same manner as distributions from a traditional IRA.
Distributions from a Roth IRA need not commence at age 70 1/2. However, if
the owner dies before the entire interest in a Roth IRA is distributed, any
remaining interest in the contract must be distributed under the same rules
applied to traditional IRAs where death occurs before the required beginning
date.
REPORTING TO THE IRS
Beginning with Forms 5498 issued in January 2004, we will indicate to you and
the IRS that your account is subject to the minimum required distributions if
you were at least 70 1/2 at the end of the prior year.
Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions or 50% for underpayments),
you must file Form 5329 with the Internal Revenue Service. The form is to be
attached to your federal income tax return for the tax year in which the penalty
applies. Normal contributions and distributions must be shown on your income tax
return for the year to which they relate.
53
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
APPENDIX
ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
As we have indicated throughout this prospectus, the Strategic Partners Plus
Variable Annuity is a contract that allows you to select or decline any of
several features that carries with it a specific asset-based charge. We maintain
a unique unit value corresponding to each combination of such Contract features.
Here we depict the historical unit values corresponding to the contract features
bearing the highest and lowest combinations of asset-based charges during the
periods September 24, 2001 to December 31, 2001 and January 1, 2002 to December
31, 2002. During those periods, the highest combination of asset-based charges
amounted to 1.60%, and the lowest combination of asset-based charges amounted to
1.40%. Under the version of the contracts described in this prospectus, the
highest combinations of asset-based charges now amounts to 1.75%, while the
lowest combination of asset-based charges remains at 1.40%.
54
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
<Table>
<Caption>
ACCUMULATION UNIT VALUES: AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (BASE DEATH BENEFIT
1.40)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
JENNISON PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.71728 $0.86988 0
1/1/2002 to 12/31/2002
PRUDENTIAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002
PRUDENTIAL GLOBAL PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.70710 $0.83992 0
1/1/2002 to 12/31/2002
PRUDENTIAL MONEY MARKET PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.00905 $1.01253 0
1/1/2002 to 12/31/2002
PRUDENTIAL STOCK INDEX PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.79176 $0.90493 0
1/1/2002 to 12/31/2002
PRUDENTIAL VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002
SP AGGRESSIVE GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.74907 $0.87109 0
1/1/2002 to 12/31/2002
SP AIM AGGRESSIVE GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.75103 $0.87500 0
1/1/2002 to 12/31/2002
SP AIM CORE EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.71197 $0.84109 0
1/1/2002 to 12/31/2002
SP ALLIANCE LARGE CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.74749 $0.88230 0
1/1/2002 to 12/31/2002
SP ALLIANCE TECHNOLOGY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.62877 $0.81297 0
1/1/2002 to 12/31/2002
SP BALANCED ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.85849 $0.94964 0
1/1/2002 to 12/31/2002
SP CONSERVATIVE ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.91394 $0.98458 0
1/1/2002 to 12/31/2002
</Table>
<Table>
<Caption>
* COMMENCEMENT OF BUSINESS
THIS CHART CONTINUES ON THE NEXT PAGE
</Table>
55
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (BASE DEATH BENEFIT 1.40)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
SP DAVIS VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.79811 $0.92029 0
1/1/2002 to 12/31/2002
SP DEUTSCHE INTERNATIONAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.75672 $0.84741 0
1/1/2002 to 12/31/2002
SP GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.80155 $0.90967 0
1/1/2002 to 12/31/2002
SP INVESCO SMALL COMPANY GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.74262 $0.92677 0
1/1/2002 to 12/31/2002
SP JENNISON INTERNATIONAL GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.67078 $0.74788 0
1/1/2002 to 12/31/2002
SP LARGE CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.82775 $0.92388 0
1/1/2002 to 12/31/2002
SP MFS CAPITAL OPPORTUNITIES PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.68066 $0.81060 0
1/1/2002 to 12/31/2002
SP MID CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.64875 $0.81540 0
1/1/2002 to 12/31/2002
SP PIMCO HIGH YIELD PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.97738 $1.01397 0
1/1/2002 to 12/31/2002
SP PIMCO TOTAL RETURN PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.04081 $1.04110 0
1/1/2002 to 12/31/2002
SP PRUDENTIAL US EMERGING GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.71823 $0.87416 0
1/1/2002 to 12/31/2002
SP SMALL/MID CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.83974 $1.00289 0
1/1/2002 to 12/31/2002
</Table>
<Table>
<Caption>
* COMMENCEMENT OF BUSINESS
THIS CHART CONTINUES ON THE NEXT PAGE
</Table>
56
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (BASE DEATH BENEFIT 1.40)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
SP STRATEGIC PARTNERS FOCUSED GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.73510 $0.85719 0
1/1/2002 to 12/31/2002
EVERGREEN VA BLUE CHIP FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.80031 $0.90859 0
1/1/2002 to 12/31/2002
EVERGREEN VA CAPITAL GROWTH FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.80567 $0.90811 0
1/1/2002 to 12/31/2002
EVERGREEN VA FOUNDATION FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.88738 $0.95089 0
1/1/2002 to 12/31/2002
EVERGREEN VA GLOBAL LEADERS FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.79152 $0.91709 0
1/1/2002 to 12/31/2002
EVERGREEN VA GROWTH FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.77814 $0.98597 0
1/1/2002 to 12/31/2002
EVERGREEN VA MASTERS FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.73837 $0.87356 0
1/1/2002 to 12/31/2002
EVERGREEN VA OMEGA FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.78078 $0.91152 0
1/1/2002 to 12/31/2002
EVERGREEN VA SMALL CAP VALUE FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.88136 $1.09268 0
1/1/2002 to 12/31/2002
JANUS ASPEN SERIES--GROWTH PORTFOLIO SERVICE SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.67718 $0.78373 0
1/1/2002 to 12/31/2002
</Table>
* COMMENCEMENT OF BUSINESS
57
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES:
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (GMDB STEP-UP 1.60)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
JENNISON PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.71669 $0.86869 0
1/1/2002 to 12/31/2002
PRUDENTIAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002
PRUDENTIAL GLOBAL PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.70660 $0.83888 0
1/1/2002 to 12/31/2002
PRUDENTIAL MONEY MARKET PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.00829 $1.01127 0
1/1/2002 to 12/31/2002
PRUDENTIAL STOCK INDEX PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.79119 $0.90384 0
1/1/2002 to 12/31/2002
PRUDENTIAL VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
2/4/2002* to 12/31/2002
SP AGGRESSIVE GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.74846 $0.86993 0
1/1/2002 to 12/31/2002
SP AIM AGGRESSIVE GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.75046 $0.87386 0
1/1/2002 to 12/31/2002
SP AIM CORE EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.71132 $0.83990 0
1/1/2002 to 12/31/2002
SP ALLIANCE LARGE CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.74696 $0.88124 0
1/1/2002 to 12/31/2002
SP ALLIANCE TECHNOLOGY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.62826 $0.81186 0
1/1/2002 to 12/31/2002
SP BALANCED ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.85780 $0.94831 0
1/1/2002 to 12/31/2002
SP CONSERVATIVE ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.91331 $0.98336 0
1/1/2002 to 12/31/2002
SP DAVIS VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.79747 $0.91900 0
1/1/2002 to 12/31/2002
</Table>
<Table>
<Caption>
* COMMENCEMENT OF BUSINESS
THIS CHART CONTINUES ON THE NEXT PAGE
</Table>
58
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (GMDB STEP-UP 1.60)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
SP DEUTSCHE INTERNATIONAL EQUITY PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.75614 $0.84626 0
1/1/2002 to 12/31/2002
SP GROWTH ASSET ALLOCATION PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.80091 $0.90849 0
1/1/2002 to 12/31/2002
SP INVESCO SMALL COMPANY GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.74206 $0.92565 0
1/1/2002 to 12/31/2002
SP JENNISON INTERNATIONAL GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.67027 $0.74692 0
1/1/2002 to 12/31/2002
SP LARGE CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.82716 $0.92277 0
1/1/2002 to 12/31/2002
SP MFS CAPITAL OPPORTUNITIES PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.68013 $0.80954 0
1/1/2002 to 12/31/2002
SP MID CAP GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.64825 $0.81439 0
1/1/2002 to 12/31/2002
SP PIMCO HIGH YIELD PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.97668 $1.01274 0
1/1/2002 to 12/31/2002
SP PIMCO TOTAL RETURN PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $1.04010 $1.03983 0
1/1/2002 to 12/31/2002
SP PRUDENTIAL U.S. EMERGING GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.71769 $0.87304 0
1/1/2002 to 12/31/2002
SP SMALL/MID CAP VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.83910 $1.00157 0
1/1/2002 to 12/31/2002
SP STRATEGIC PARTNERS FOCUSED GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.73452 $0.85608 0
1/1/2002 to 12/31/2002
EVERGREEN VA BLUE CHIP FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.79969 $0.90735 0
1/1/2002 to 12/31/2002
</Table>
<Table>
<Caption>
* COMMENCEMENT OF BUSINESS
THIS CHART CONTINUES ON THE NEXT PAGE
</Table>
59
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS PLUS PROSPECTUS SECTIONS 1-9
<Table>
<Caption>
ACCUMULATION UNIT VALUES (CONTINUED):
AS A PERCENTAGE OF EACH FUND'S AVERAGE DAILY NET ASSETS (GMDB STEP-UP 1.60)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT VALUE ACCUMULATION UNIT VALUE NUMBER OF ACCUMULATION UNITS
AT BEGINNING OF PERIOD AT END OF PERIOD OUTSTANDING AT END OF PERIOD
EVERGREEN VA CAPITAL GROWTH FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.80508 $0.90697 0
1/1/2002 to 12/31/2002
EVERGREEN VA FOUNDATION FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.88667 $0.94959 0
1/1/2002 to 12/31/2002
EVERGREEN VA GLOBAL LEADERS FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.79097 $0.91595 0
1/1/2002 to 12/31/2002
EVERGREEN VA GROWTH FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.77748 $0.98466 0
1/1/2002 to 12/31/2002
EVERGREEN VA MASTERS FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.73785 $0.87245 0
1/1/2002 to 12/31/2002
EVERGREEN VA OMEGA FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.78015 $0.91033 0
1/1/2002 to 12/31/2002
EVERGREEN VA SMALL CAP VALUE FUND
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.88064 $1.09121 0
1/1/2002 to 12/31/2002
JANUS ASPEN SERIES--GROWTH PORTFOLIO SERVICE SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
9/24/2001* to 12/31/2001 $0.67664 $0.78269 0
1/1/2002 to 12/31/2002
</Table>
* COMMENCEMENT OF BUSINESS
60
PART III PROSPECTUSES
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
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ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Incorporated by reference to Part II, Item 2 or Part II, Item 5 of the
Registrant's most recently filed report on Form 10-Q or 10-K, respectively.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant, in connection with certain affiliates, maintains various
insurance coverages under which the underwriter and certain affiliated persons
may be insured against liability which may be incurred in such capacity, subject
to the terms, conditions and exclusions of the insurance policies.
New Jersey, being the state of organization of Pruco Life Insurance Company
of New Jersey ("PLNJ") permits entities organized under its jurisdiction to
indemnify directors and officers with certain limitations. The relevant
provisions of New Jersey law permitting indemnification can be found in Section
14A:3-5 of the New Jersey Statutes Annotated. The text of PLNJ's By-Law Article
V, which relates to indemnification of officers and directors, is incorporated
by reference to Exhibit 3(ii) to its Form 10-Q filed August 15, 1997.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 16. EXHIBITS
(a) Exhibits
(1) (a) Form of Distribution Agreement between Prudential Investment Management
Services LLC (Underwriter) and Pruco Life Insurance Company of New Jersey
(Depositor). (Note 5)
(4) (a) Strategic Partners Annuity One Variable Annuity Contract VBON 2000-NY
Ed. 10/2000 (Note 6)
(4) (b) Strategic Partners Annuity One Variable Annuity Contract VDCA 2000-NY
Ed. 10/2000 (Note 6)
(4) (c) Strategic Partners Annuity OneEndorsement (MVA) ORD 112805-NY (Note 1)
(4) (d) Strategic Partners Application ORD 99730 NY-1 (Note 1)
(5) Opinion of Counsel as to legality of the securities being registered.
(Note 1)
II - 1
(24) Powers of Attorney.
(a) James J. Avery, Jr. (Note 3)
(b) David R. Odenath, Jr. and William J. Eckert, IV (Note 2)
(c) Ronald P. Joelson (Note 4)
(d) Vivian L. Banta, Richard J. Carbone, and Helen M. Galt (Note 5)
----------
(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Form S-6, Registration No. 333-49334,
filed February 8, 2001 on behalf of the Pruco Life of New Jersey Variable
Appreciable Account.
(Note 3) Incorporated by reference to Post-Effective Amendment No. 10 to Form
S-1, Registration No. 33-20018, filed April 9, 1998 on behalf of the Pruco
Life of New Jersey Variable Contract Real Property Account.
(Note 4) Incorporated by reference to Post-Effective Amendment No. 14 to Form
S-1, Registration Statement No. 33-20018, filed April 10, 2001 on behalf of
the Pruco Life of New Jersey Variable Contract Real Property Account.
(Note 5) Incorporated by reference to Post-Effective Amendment No. 5 to Form
S-6, Registration No. 333-85117 filed June 28, 2001 on behalf of the Pruco
Life of New Jersey Variable Appreciable Account.
(Note 6) Incorporated by reference to Post-Effective Amendment No. 5 to Form
N-4, Registration No. 333-49230 filed December 10, 2002 on behalf of the
Pruco Life of New Jersey Flexible Premium Variable Annuity Account.
II - 2
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10 (a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information in the registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II - 3
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 the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Newark, State of New
Jersey, on the 27th day of February, 2003.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Registrant)
By: /s/ ANDREW J. MAKO
------------------
ANDREW J. MAKO
EXEC. VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and the date indicated.
SIGNATURE AND TITLE
-------------------
/s/ * February 27, 2003
JAMES J. AVERY JR.
VICE CHAIRMAN
AND DIRECTOR
/s/ * *By: /s/ CLIFFORD E. KIRSCH
-------------------------------------------- -------------------------
VIVIAN L. BANTA CLIFFORD E. KIRSCH
PRESIDENT, CHAIRMAN AND DIRECTOR (ATTORNEY-IN-FACT)
/s/ *
--------------------------------------------
WILLIAM J. ECKERT, IV
VICE PRESIDENT AND CHIEF
ACCOUNTING OFFICER
(PRINCIPAL FINANCIAL AND
CHIEF ACCOUNTING OFFICER)
____________________________________________
RONALD P. JOELSON
DIRECTOR
/s/ *
--------------------------------------------
RICHARD J. CARBONE
DIRECTOR
/s/ *
--------------------------------------------
HELEN M. GALT
DIRECTOR
/s/ *
--------------------------------------------
DAVID R. ODENATH, JR.
DIRECTOR
II - 4
EXHIBIT INDEX
(4)(c) Endorsement (MVA) ORD 112805-NY
(4)(d) Application ORD 99730 NY-1
(5) Opinion of Counsel